NMTC Helps Fund a New Facility for Tropical Products - Mascoma Bank

NMTC Helps Fund a New Facility for Tropical Products

author imagePosted by Mascoma Bank on June 20, 2022

Mascoma Community Development (MCD) is pleased to announce a $20 million New Markets Tax Credit (NMTC) allocation to finance the construction of a new manufacturing and warehouse facility for Tropical Products Inc.’s water-based personal care, home care, and pet care products in Salem, Massachusetts.

The new facility will allow Tropical Products to more than double its existing capacity and ultimately create an estimated 125 new jobs in the low-income community of Salem while satisfying increased product demand and remaining competitive in the market.

“The Tropical Products project is a new construction project located in a severely distressed census tract. We expect that this project may catalyze investment by creating and retaining accessible, permanent jobs, and help revitalize the greater Salem community,” says Tad Atwell, Chief Operating Officer of MCD. “MCD actively looks for opportunities like this where it may support existing businesses, attract new ones, and encourage further economic growth while providing high quality employment options for community members.”

MCD is a Community Development Entity established by Mascoma Bank which creates impactful jobs in highly distressed, low-income rural and minor-urban communities. MCD also targets downtown redevelopment projects that help revitalize communities and provide services to residents.

At the current Tropical Products facility, 58 people hold full-time equivalent (FTE) positions. The new facility is projected to create 125 additional FTEs upon completion. Approximately 90% of existing employees live in Salem or the nearby low-income communities of Peabody, Lynn, Revere, Everett, and Chelsea. This includes about 95% first- and second-generation immigrants and 74% English language learners. Tropical Products anticipates that new hires will come from these communities as well. All FTEs will have access to comprehensive benefits including health insurance, paid sick/vacation days, career advance opportunities, and job training.

U.S. Bank is investing New Markets Tax Credit equity to help finance the expansion. “U.S. Bank believes everyone deserves an opportunity to achieve financial stability,” said Tom Oldenburg, Vice President, Business Development with U.S Bancorp Community Development Corporation. “We’re proud to help Tropical Products expand and create skilled jobs with good benefits. This not only supports the individuals who work here and their families, but the entire community.”

Tropical Products has operated in its current 45,000-square foot facility in Salem, MA, since 2004. They specialize in developing turnkey products and manufacturing water-based personal care, home care, and pet care products such as soaps, shampoos, and detergents. Their existing facility is unable to satisfy increased product demand, resulting in lost new business. The new facility will increase their output to 20 product lines versus the existing seven and is anticipated to be completed in September 2023.

Tropical Products’ mission also includes creating high quality products using safe, renewable, and environmentally friendly ingredients for companies who sell to consumer markets via brick & mortar, internet, and social media.

Tropical Products reports “We are extremely appreciative of the investment that Mascoma Community Development is making in our business and in the city of Salem. With the high amount of uncertainty and inflation we are seeing in the economy right now, it would have been impossible to undertake this expansion without the help of Mascoma’s New Markets Tax Credit Allocation. Thanks to Mascoma’s investment, we will be able to retain and create manufacturing jobs right here in our home of Salem and grow the state’s manufacturing sector.”

MCD is pleased to report that this project has also made possible MCD’s grant of $100,000 to a regional CDFI Partner, BlueHub Loan Fund, Inc. (BlueHub), in support of its borrower North Shore Community Development Coalition’s “El Centro” project, also located in Salem. The development will include a community health center and 48 units of affordable housing for seniors. This grant will support pre-development soft costs, including architectural and engineering costs. MCD takes great pride supporting organizations and programs that strengthen the communities they serve. MCD commends the important work of BlueHub, and all CDFIs, and is pleased to support these efforts with this grant.