Barracuda Gets Tax Break from Ann Arbor

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Following a public hearing on the topic, the Ann Arbor city council has granted a tax abatement to Barracuda Networks in connection with its relocation from Depot Street to the old corporate headquarters of Borders in downtown Ann Arbor, off Maynard Street. The total tax break for the 5-year period of the abatement is expected to be worth $61,000. That’s less than the originally estimated amount of $85,000. The council’s action came at its Oct. 1, 2012 meeting.

Barracuda is a computer network security company. On its application for the abatement, Barracuda indicates that it currently has 155 employees who will be retained due to the abatement. The firm expects to add 144 employees by July 1, 2014. The property on which Barracuda is requesting the abatement ranges from cubicles and desk chairs to telephone network equipment and wiring.

The tax abatement agreement between the city of Ann Arbor and Barracuda makes the expectation of 144 new hires an explicit condition on receiving the abatement: “Barracuda Networks will add not less than one hundred forty four (144) jobs at the facility named on the Application as compared to its number of employees as of the effective date of the Certificate. If Barracuda Networks adds less than one hundred forty four (144) additional jobs by December 31, 2014, Barracuda Networks shall have materially breached the terms of this Agreement and the City shall have the right to recommend revocation of the Certificate subject to provision 10 of this agreement to the State Tax Commission or taking other appropriate legal action in connection with the default.”

The council had voted at its Sept. 4 meeting to set the public hearing. And the council had previously set a hearing on the establishment of an industrial development district (Michigan’s Act 198 of 1974) at 317 Maynard St. in downtown Ann Arbor and voted to establish that district at its Aug. 9, 2012 meeting. That set up the opportunity for Barracuda Networks to apply for a tax abatement as it moves from its current location on Depot Street to the downtown site. [.jpg of parcel map showing 317 Maynard] [.jpg of aerial photo showing 317 Maynard]

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron. A more detailed report will follow: [link]