PITTSFIELD, Mass. — The City Council approved a $580,000 tax incentive to help LTI Smart Glass expand its Federico Drive facility.

 

The company is looking to add 16,692 square feet to its facility and add 38 jobs at a minimum. And the company is investing in equipment to perform work it currently farms out to other states, here in Pittsfield.

 

"There are a couple of components here. It is the job growth but it is also the capital investment to create something this company currently isn't doing, adding a new service," Council Vice President John Krol said Tuesday night when the council unanimously approved the package.

 

LTI formed in 2003 with a small staff and renting out space in Lenox Dale. In 2008, Pittsfield put forth $250,000 worth of incentives to move it to Federico Drive and it grew to employ 100 people. In 2016, it merged with Kapiloff Glass.

 

"We used the money you gave us during the good times just like we earned it. It is easy, I think, to use money well in bad times. What is harder is to use it well in good times," company principal Christopher Kapiloff said.

 

And now it is time to grow again. The new incentive breaks down like this: The company would receive $200,000 upon the issuance of a Certificate of Occupancy once the expansion is completed; $100,000 six months later if there is a total of 123 jobs based there no later than Dec. 31, 2018 — $80,000 six months later at the 138-jobs point; $100,000 if it hits 163; another $100,000 if the company hits 188. The jobs must be full-time equivalent and pay at least $35,000 a year. A total of 38 new jobs is expected.

 

And then there is a "challenge" that would give the company another $200,000 if it creates another 50 jobs.

 

"The company is definitely capable and prepared for successfully executing this expansion plan, including meeting or exceeding the challenge portion of the award," said Director of Community Development Deanna Ruffer. 

 

Ruffer said she reviewed the company's finances from recent years and is confident that LTI is not only financially strong but has a strong future. Kapiloff said the company hadn't had a single layoff since 2008.

 

"We took over a vacant building and we turned it into a very busy parking lot. Over the next seven years, LTI hired 75 employees. Not only have we survived the worst recession in my lifetime, we did it without layoffs," Kapiloff said, adding that the company paid more than $500,000 back in property taxes, which is double that first incentive package.

 

What it has done is roll out a number of new products and reeled in some large contracts. After the Sandy Hook, Conn., school shooting, co-owner Jeff Besse sent Kapiloff emails late at night asking how they could help protect children elsewhere. They developed School Guard Glass, a protective glass that has been installed in more than 500 schools, including the new Sandy Hook.

 

"We've done some pretty great products. We have retrofitted the control tower for Air Force One. We've done a lot of work with the Department of Defense. The new World Trade Center has 40,000 square feet of glass that was made in Pittsfield. We are pretty proud of a lot of those things," Kapiloff said. 

 

The company is making 17,000 pieces of bulletproof glass to be installed in New York City police cruisers. Kapiloff said he sees no reason why his company couldn't sell the product to departments all over the country. He said the military has a backlog of broken windows and windshields in vehicles, and the company has potential there.

 

Many of his contracts require non-disclosure agreements, so he can't reveal everything he has going. But, Kapiloff said he has four particularly large contracts in place right now. Those contracts require an expansion.

 

But LTI has had an ongoing issue when it comes to their products. They develop them and then another company elsewhere reverse engineers it, and then get the contracts for a lower price.

 

"LTI is trying to get past the days when we make stuff and a company in South Carolina, Alabama, or New York pick it up and do the lion's share of the work across the United States," Kapiloff said.

 

He said a competitor in Alabama can pay employees less than Massachusetts' minimum wage (LTI is at least 20 percent above minimum) and another competitor in New York pays half the cost for electricity. The company believes that the expansion and new tools will allow LTI to produce its products faster and at a lower cost by cutting out the need to go through other vendors.

 

"The purchase of our new equipment will allow us to make what they currently provide," Kapiloff said, highlighting three vendors that are out of state and saying that money will now return to Massachusetts.

 

The work has already begun. The incentive package had support across the board in City Hall and the state had even put forth tax incentives. 

 

"This is something we need to do," said Ward 2 Councilor Kevin Morandi, highlighting the importance of economic development.

 

The incentive package comes from the GE Economic Development Fund and was the second allocation from it made Tuesday night. The City Council also approved spending $1 million for construction of the Berkshire Innovation Center.