1. The Economic Development Incentive Program provides tax credits up to 10% of investment costs for certified expansion projects and enhanced expansion projects that create new jobs. 2. The Emerging Technology Fund offers below-market loans up to $2.5 million for equipment or real estate to support technology startups and expansions. 3. The Research & Development Tax Credit provides a 10-15% credit for R&D expenses to encourage innovation in the state.

1. Commercial
MARKET FOCUS A CLOSER LOOK AT MARKET TRENDS
Real Estate
Value-Addvisors
What economic incentives are available to attract companies to the state of
Massachusetts? What incentives are available to retain these companies?
Executive Summary
With an ongoing focus on cost containment, corporate real estate executives have become much more strategic in site selection methodologies. As the
corporate decision-making process has become more focused on the total cost of doing business in the long term, the role of state and municipal incentives
has become increasingly important as companies seek ways to offset start-up costs, new investments and long-term operating costs. Additionally, states
and towns recognize the value of incentives not only in attracting, but in retaining businesses. As a result, incentives, loans and tax credits have been cre-
ated to align with specific industries and projects that enhance a community’s economic development policies.
ECONOMIC DEVELOPMENT INCENTIVE PROGRAM (EDIP)
Incentive Type: Tax exemption/ investment tax credit
Eligibility: • Massachusetts employers located in or moving to an Economic Target Area within the Commonwealth
of Massachusetts that generate substantial sales outside of Massachusetts.
• Massachusetts employers who generate or retain a substantial number of jobs.
Industry: Applicable to all industries
Contact: Economic Assistance Coordinating Council
Massachusetts Office of Business Development
10 Park Plaza, Suite 3730
Boston, MA 02116
(617) 973-8538
Sponsored by the Economic Assistance Coordinating Council (EACC), a division of the Massachusetts Office of Business Development, the Economic
Development Incentive Program (EDIP) is targeted toward creating jobs in Massachusetts and retaining companies that already have a presence within the
Commonwealth. Eligible projects are separated into the following categories:
• Certified Expansion Project: A full-time job creation and investment project within an Economic Target Area (ETA), which is designated as such by
the EACC based upon income, unemployment, and other economic characteristics. In addition, the project must be located within a specific Economic
Opportunity Area within the ETA and must be approved for local tax incentives. In order to qualify for the incentive, companies must commit to creating
at least one full-time job and have at least 25% (or another reasonable percentage as determined by the EACC) of its sales generated outside the Com-
monwealth. Qualifying projects are eligible for up to a 10% Investment Tax Credit.
• Enhanced Expansion Project: A project conducted anywhere in the Commonwealth which generates 100 or more new full-time jobs within 2 years of
receiving the incentive. Qualifying projects are eligible for up to a 10% Investment Tax Credit. The project may also seek local tax incentives.
• Manufacturing Retention Project: A project that retains or creates at least 100 full-time, permanent manufacturing jobs within a Gateway Community,
which is defined as a municipality with a population greater than 35,000, a median household income below the Commonwealth’s average, and educa-
tional attainment rates that are below the Commonwealth’s average. The project must receive municipal approval prior to being considered and may also
seek local tax incentives from the city or town.
• Abandoned Building Renovation Deduction: The renovation of an abandoned building, which is defined as being at least 75% vacant for 24 months
or more. To be eligible, the building must be located within an Economic Opportunity Area. Eligible projects can receive a corporate excise deduction or
personal income tax deduction of 10% of the cost of renovation.
A DT Z A F FILIATE www.FHOpartners.com

2. MARKET FOCUS
INVESTMENT TAX CREDIT
Incentive Type: Tax credit
Eligibility: Companies that engage in manufacturing, certain R&D companies, and corporations engaged primarily in
agriculture or commercial fishing.
Industry: Manufacturing, R&D, agriculture/commercial fishing
Contact: Brenda Reynolds
EDIP Coordinator
Massachusetts Office of Business Development
10 Park Plaza, Suite 3730
Boston, MA 02116
(617) 973-8538
The Massachusetts Investment Tax Credit is a 3% credit for qualifying businesses against their corporate excise tax to be used for the purchase and lease
of qualified tangible property used for business. The goal of the credit is to encourage capital investment and reduce companies’ cost of expansion. The
credit includes qualifying tangible property acquired, constructed, reconstructed, or erected during the taxable year, after federal tax deductions are taken
on the property. This includes personal property and buildings and structural components of buildings acquired by purchase. If an operating lease is in
place, the lessee is only allowed credit for personal property.
RESEARCH & DEVELOPMENT TAX CREDIT
Incentive Type: Tax credit
Eligibility: Available to any foreign or domestic corporation subject to the corporate excise under Chapter 63
Massachusetts Laws.
Industry: Research & Development
Contact: Massachusetts Office of Business Development
10 Park Plaza, Suite 3730
Boston, MA 02116
(617) 973-8600
The R&D tax credit was designed to remove any obstacles to R&D investment and spur growth and innovation in the Commonwealth. The credit is available
to both manufacturers and R&D companies and is divided into two categories:
• A 10% credit for Qualified Expenses which is defined as any expense that would qualify for the Federal R&D tax credit.
• A 15% credit for Basic Research Payments for costs related to donations or contributions made to research organizations such as hospitals and
universities.
The R&D tax credit can be taken in conjunction with the state’s Investment Tax Credit of 3% and can reduce the corporation’s tax to the minimum of $456.
F HO Par tner s

3. MARKET FOCUS
SINGLE SALES FACTOR TAX CREDIT
Incentive Type: Tax incentive
Eligibility: Manufacturers, qualifying defense contractors, and qualifying financial services firms who have multi-state
tax filings
Industry: Manufacturing, defense contractors, financial services
Contact: Massachusetts Office of Business Development
10 Park Plaza, Suite 3730
Boston, MA 02116
(617) 973-8600
The Massachusetts Single Sales Factor significantly reduces the tax burden for manufacturing companies and certain defense contractors and financial
services firms. Under the Single Sales Factor, net income subject to Massachusetts tax is determined by multiplying the overall net income by the ratio of
Massachusetts sales to overall sales. Many states use a Three-Factor Apportionment, which taxes on sales, property, and payroll as a percent of overall
sales, property, and payroll. This is beneficial to larger companies with substantial property and payroll, as they are not penalized for investing or hiring.
THE BROWNFIELDS TAX CREDIT
Incentive Type: Tax credit
Eligibility: • Must own or lease a contaminated site for business purposes and complete a cleanup of the site
• Owner or lessee must not have caused the contamination
• The site must be located in an Economically Distressed Area
Industry: All industries
Contact: Catherine Finneran
MassDEP Brownfields Coordinator
Massachusetts Department of Environmental Protection
One Winter Street
Boston, MA 02108
(617) 556-1138
The Brownfields Tax Credit is available to businesses that own or lease a contaminated site for business purposes who commit to a complete cleanup of
the site, provided they did not cause the contamination. In addition, the site must be located in an Economically Distressed Area. The tax credit is 25% or
up to 50% of the cleanup costs depending on the extent and permanence of the cleanup solution. In order to qualify for the credit, the site must be reported
to the Department of Environmental Protection, and cleanup costs must be incurred before January 1, 2012 and must be greater than 15% of the value to
the property prior to cleanup. In addition, if the tax payer does not maintain the remediation of the site, they are responsible for paying back the difference
between the credit taken and the credit allowed for maintaining the remedy.
F HO Par tner s

4. MARKET FOCUS
THE EMERGING TECHNOLOGY FUND (ETF)
Incentive Type: Loan
Eligibility: Technology companies that are starting up or increasing manufacturing in Massachusetts
Industry: Biotechnology, medical devices, telecommunications, electronics, environmental
Contact: Mass Development
160 Federal Street
Boston, MA 02110
(800) 445-8030
Sponsored by Mass Development, The Emerging Technology Fund (ETF) provides loans for real estate or equipment financing to companies working with
emerging technology that have plans to expand in Massachusetts. The goal of the ETF is to provide emerging technology companies with easy access to
capital at below market interest rates without a complicated application and approval process. Other requirements are that the company have at least two
at-risk parties besides Mass Development and have a strong management team as well as a demonstrated ability to produce and market the product and
complete loan repayment. The loan cap for real estate or equipment is $2.5 million or 25% of the total project costs.
MASSACHUSETTS FILM INCENTIVE CREDITS
Incentive Type: Tax Credit
Eligibility: Motion picture production companies who incur at least $50,000 of production costs in Massachusetts
Industry: Film production, financial institutions, utility corporations, insurance companies
Contact: Patrick Shirley, Supervisor
Massachusetts Department of Revenue
Film Credit Unit
200 Arlington Street, Room 4300
Chelsea, MA 02150
Phone: 617-887-6725
Massachusetts Film Incentive Credits consist of two tax credits, the Payroll Credit, and Production Expense Credit. These credits only apply to motion
pictures companies who have production expenses within Massachusetts of greater than $50,000 per picture in a one-year period.
• Payroll Credit
A credit of 25% of the total payroll for jobs created within Massachusetts in connection with the filming and production of a motion picture. This excludes
employees paid over $1M.
• Production Expense Credit
A credit of 25% of the Massachusetts production expenses, not including payroll if the Payroll Credit is also being claimed. In order to qualify for the
credit, production expenses incurred in Massachusetts must exceed 50% of the total production expenses, or 50% of filming days must take place in
Massachusetts. This credit can also include payroll to employees paid over $1M.
F HO Par tner s

5. MARKET FOCUS
ENERGY CREDITS
Incentive Type: Tax incentive
Eligibility: Applicable to commercial, industrial, residential, and agricultural sectors
Industry: All industries
Contact: Massachusetts Department of Energy Resources (DOER)
100 Cambridge Street, Suite 1020
Boston, MA 02114
(617) 626-7300
• Alternative Energy and Energy Conservation Patent Exemption
A corporate excise tax deduction for income from the sale or lease of a U.S. patent, or personal or real property related to the patent, which the Mas-
sachusetts DOER considers beneficial for energy conservation or alternative energy.
• Renewable Energy Property Tax Exemption
20-year property tax exemption for solar energy systems and wind energy systems which serve as a primary or auxiliary power system for heating or
other energy needs of taxable property in Massachusetts. The exemption is also applicable to hydropower facilities if they enter an agreement with the
city or town to instead make a payment of at least 5% of its gross income in the preceding calendar year. The exemption applies to the additional value
added to a property by an energy system, not the full amount of the property tax bill.
• Excise Tax Exemption for Solar or Wind Powered Systems
Exemption for the tangible property portion of the excise tax for solar or wind powered climate control or heating units. This exemption is in effect for the
length of the system’s depreciation period.
• Excise Tax Deduction for Solar or Wind Powered Systems
Massachusetts businesses can deduct the cost of installation of solar or wind powered climate control or heating units, including labor, from net income
for state excise tax, so long as the installation is located in Massachusetts and is used exclusively for the business. The system will also not be taxed
under the state’s tangible property measure for corporate excise tax and is effective for the length of the system’s depreciation period.
MASSACHUSETTS OPPORTUNITY RELOCATION AND EXPANSION (MORE) JOBS CAPITAL PROGRAM
Incentive Type: Grant
Eligibility: Massachusetts municipalities and corporations that partner together to improve publicly owned
infrastructure
Industry: All industries
Contact: Nayenday Thurman
Director of Economic Development Programs
100 Cambridge Street, Suite 1010
Boston, MA 02114
(617) 788-3636
The MORE jobs capital program was designed to provide funding for infrastructure improvements that support local business expansion. Grants must be
used for publicly owned infrastructure such as roads, utility extensions, and parking facilities. In order to be eligible for the MORE grant, the project must
result in the creation of 100 permanent full time jobs in Massachusetts within 2 years of receiving the grant, maintain such jobs for at least 5 years, generate
sales outside Massachusetts, and provide an economic benefit to the public.
F HO Par tner s

6. TARGET INCENTIVE OUTCOME
ELIGIBLE
PROGRAM DURATION VALUE ($)
INDUSTRIES JOB ECONOMIC PROPERTY ENVIRONMENTAL
ECONOMIC ENVIRONMENTAL LOAN GRANT CREDIT
CREATION DEVELOPMENT REDEVELOPMENT REMEDIATION
MARKET
Single Sales Factor Manufacturers, De- Indefinite Varies X X X
fense Contractors,
Financial Services
F HO Par tner s
Massachusetts Op- All Indefinite Varies X X X X
portunity Relocation and
FOCUS
Expansion (MORE) Jobs
Capital Program
Brownfields All Cleanup costs 25% to 50% X X X X
must be in- of Cleanup
curred before Costs
January 1,
2012
Emerging Technology Technology compa- Indefinite $2.5 Million X X In X X
Fund nies (biotechnology, or 25% of Special
medical devices, total project Cases
telecommunica- costs (Real
tions, electronics, Estate max:
environmental, $2 million,
advanced materials Equip-
or other emerging ment max:
technology $500,000)
Energy Credits Commercial, indus- Indefinite Varies X X X X
trial, residential and
agricultural sectors
Economic Development Massachusetts em- Indefinite Up to 10% X X X X X
Incentive Program (EDIP) ployers generating investment
substantial sales tax credit
outside the state
Film Incentive Credit Film production, Indefinite 25% or total X X X
financial institutions, payroll or
utility companies, production
insurance com- expenses
panies
Investment Tax Credit Manufacturing, Indefinite 3% credit X X X X
R&D and com- against cor-
panies engaged porate excise
primarily in agricul- tax
ture or commercial
fishing
R&D Tax Credit Any foreign or Indefinite 10-15% X X X
domestic corpora-
tion subject to the
corporate excise
under Chapter 63
Massachusetts laws

7. MARKET FOCUS
Sources Massachusetts Office of Business Development
Economic Development Incentives Program (EDIP) Executive Office of Housing and Economic Development
Economic Assistance Coordinating Council Click Here
Massachusetts Office of Business Development
Executive Office of Housing and Economic Development Brownfields Tax Credit
Click Here Massachusetts Department of Environmental Protection
Click Here
Massachusetts Alliance for Economic Development
Click Here Emerging Technology Fund
MassDevelopment
Investment Tax Credit Click Here
Massachusetts Alliance for Economic Development
Click Here Massachusetts Alliance for Economic Development
Click Here
Massachusetts Office of Business Development
Executive Office of Housing and Economic Development Massachusetts Opportunity Relocation and Expansion (MORE)
Click Here Job Capital Program
Massachusetts Office of Business Development
R&D Tax Credit Executive Office of Housing and Economic Development
Massachusetts Alliance for Economic Development Click Here
Click Here
Energy Credits
Massachusetts Office of Business Development Database of State Incentives for Renewables and Efficiency
Executive Office of Housing and Economic Development Click Here
Click Here
Film Incentive Credit
Single Sales Factor Massachusetts Department of Revenue
Massachusetts Alliance for Economic Development Click Here
Click Here
If you have any questions about this publication or how we can help your company with its real estate needs, please feel free to contact any of the following real estate
professionals:
RESEARCH
Bethany Bockmann Ashley Lane
bbockman@fhopartners.com alane@fhopartners.com
617.279.4589 617.279.4570
CORPORATE ADVISORY SERVICES GROUP
Connor Barnes John Boyle Lauria Brennan Mike Brown
cbarnes@fhopartners.com jboyle@fhopartners.com lbrennan@fhopartners.com mbrown@fhopartners.com
617.279.4536 617.279.4563 617.279.4541 617.279.4568
Michael Dalton Bill DeLaney Rick Fahey Joe Fallon
mdalton@fhopartners.com bdelaney@fhopartners.com rfahey@fhopartners.com jfallon@fhopartners.com
617.279.4560 617.279.4580 617.279.4564 617.279.4550
Peter Farnum Will Foley Kevin Hanna Brian Hines
pfarnum@fhopartners.com wfoley@fhopartners.com khanna@fhopartners.com bhines@fhopartners.com
617.279.4567 617.279.4578 617.279.4535 617.279.4562
Barry Hynes Ted Lyon Mark Mulvey Chuck O’Connor
bhynes@fhopartners.com tlyon@fhopartners.com mmulvey@fhopartners.com coconnor@fhopartners.com
617.279.4566 617.279.4579 617.279.4559 617.279.4569
Michael O’Leary Ryan Romano Sean Teague Jon Vacca
moleary@fhopartners.com rromano@fhopartners.com steague@fhopartners.com jvacca@fhopartners.com
617.2794585 617.279.4575 617.279.4561 617.279.4587
ASSET ADVISORY GROUP
Duncan Gratton John McHugh Glenn Verrette
dgratton@fhopartners.com jmchugh@fhopartners.com gverrette@fhopartners.com
617.279.4540 617.279.4547 617.279.4590
F HO Par tner s