• Office of Rep. Vargas

Rep. Vargas helps clawback tax credits after promises broken by Brooks Brothers factory

Updated: Jul 10


FOR IMMEDIATE RELEASE

Media Contact:

Emrah Fejzic 978-228-1233 | emrah.fejzic@mahouse.gov



State Recoups $1.29 Million in Tax Credits from Southwick Factory


BOSTON, MA – The Commonwealth of Massachusetts and the City of Haverhill have successfully recovered nearly $1.75 million dollars in tax breaks that were previously awarded to the former Southwick Clothing Factory in exchange for opening a manufacturing facility in Haverhill.


In exchange for promising to create 70 new jobs between 2016 and 2018, Southwick was granted $2.1 million in tax breaks by the state Economic Assistance Coordinating Council. The company was also expected to retain 468 jobs as part of the agreement.


Last year, Southwick abruptly announced that it was declaring bankruptcy and closing its Haverhill factory, and laying off 413 of its employees. Southwick was one of three Brooks Brothers factories that produce high-end men’s clothing in the United States. Workers at the New York and North Carolina plants received severance pay, while those in Haverhill did not.


“This is a victory for taxpayers and sends a strong signal to corporations that Massachusetts is a more than willing partner for economic development and job growth, but we also won’t let our taxpayers get taken advantage of. I’m grateful to Attorney General Healey, Secretary Kennealy and their respective teams for pursuing this clawback and to the thousands of MA residents that signed our petition and voiced support for this outcome,” said Haverhill State Representative Andy X. Vargas.


Rep. Vargas took the following actions to pressure Southwick into fairer treatment for its laid-off workers, and to ensure the State recouped tax credits awarded to the company:


· Led a statement, signed by 9 Merrimack Valley legislators, urging Southwick’s parent company to “take care of its workers with a fair severance that respects the humanity of their workers and the good faith that Haverhill and the Commonwealth have extended to them for years.” The Representative described the companies’ actions as “reckless and inhumane”.

· Formed an online petition calling on Southwick and Brooks Brothers to pay fair severance to their Merrimack Valley employees, a predominantly immigrant workforce. The petition was signed by over 1,000 community members.


· Contacted Executive Office of Housing & Economic Development Secretary Mike Kennealy to urge his office to attempt to reclaim state tax credits awarded to the company. In response, Annamarie Kersten, of the state’s Executive Office of Housing & Economic Development, sent a letter on July 16 to Golden Fleece Manufacturing, a division of New York-based Brooks Brothers, to inform the company that state officials intend to “claw back” all the $2.1 million in tax credits it received. Such a move is considered rare: It has only previously happened twice in the state. The State reached a settlement with Southwick in Bankruptcy court to recoup $1.29 million.


· Attended and spoke at a rally with Senator Ed Markey, Congresswoman Lori Trahan, and other local and state leaders to demand a fairer severance package for laid-off workers, and to raise awareness around the state’s tax credit “clawback” efforts. The company later agreed to pay workers their accrued vacation and sick time and temporarily extend their healthcare benefits.



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