Infrastructure Financing Mechanisms in Massachusetts

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Infrastructure Financing Mechanisms in Massachusetts

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Infrastructure Financing Mechanisms in Massachusetts

  1. 1. INFRASTRUCTURE FINANCINGMECHANISMS IN MASSACHUSETTSMAPD Annual Conference, Plymouth June 3, 2010
  2. 2. Welcome, and Panel Objectives Review recent Massachusetts policies as vehicle forPublic Private Partnerships to finance publicinfrastructure Policy context Examples & lessons learned Questions & discussion
  3. 3. Speakers James Shea Esq. Partner; Choate, Hall & Stewart Anne Thomas Esq. Special Counsel; City of Somerville Elizabeth Bates MAA Town Assessor; Town of Marshfield Angus Jennings AICP Director of Land Use Management; Town of Westford
  4. 4. Outline of Presentation Define the challenges Overview of policy options Policy framework for public/private partnerships Local example of I-Cubed Local example of District Improvement Financing Panel discussion
  5. 5. A SMALL TOWN TRIES DIFDOWNTOWN MARSHFIELDElizabeth Bates MAA & Angus Jennings AICP
  6. 6. DOWNTOWN MARSHFIELD:“OPPORTUNITY SITE”
  7. 7. 1996 Downtown Revitalization Plan:Pre- and Post-Sewer Buildout
  8. 8. History of Marshfield DIF Initiative Reviewed statute and regs in detail when DIF wasenacted in 2003 Downtown had development interest, but no privatedeveloper committed to major infrastructureimprovements DIF was pursued in hopes it would be catalyst forcoordinated, bolder development proposals Was introduced concurrent with zoning fordowntown mixed-use
  9. 9. Key Features of 40Q Proposal 10-year history/political support Planning resources ($50k) available from TownMeeting allocation Land taking for roadway realignment Assembly of Town-owned 2-acre parcel forredevelopment through RFP Estimated Buildout: 150 housing units; 40,000 sfcommercial; 10,000 sf office
  10. 10. Post Development Site Plan
  11. 11. Downtown Marshfield:District Improvement Financing Project Costs Admin/Legal Property takings Roadway/sidewalks/streetscape: hard andsoft costs Long term debtrepayment Cost: $10.7 MM Revenue Sources Tax increment (1-5) Tax increment (maxbuildout) RFP proceeds forredevelopment Investment income Bond anticipation note Revenue: $17.5 MM
  12. 12. In retrospect: Key elements missing DIF provides two options: 1) Public / Private Partnership 2) Municipal Initiative As a practical matter, need PPP A developer commitment to underwrite the bondsand minimize the Town’s risk – secured by anenforceable agreement – would have beennecessary to win Town Mtg approval
  13. 13. Regulatory framework for agreement I-Cubed is a more recent policy than DIF, andincludes some useful innovations that would behelpful – perhaps needed – to execute DIF Infrastructure Development Assistance Agreement(IDAA) Municipal Liquidity Reserve for each “AssessmentParcel”
  14. 14. Division of Labor: Municipal Concept/vision Mapping Narratives Ensure consistency of development projectionsw/existing zoning Consensus building Documentation/assembly of application Close communication w/EACC and OBD
  15. 15. Division of Labor: Private Sector Developer commitment to specific buildout Supported by market / economic analysis Renderings of post development condition Traffic analysis of post-build conditions Cost estimates for proposed improvements Bond Counsel to review financials
  16. 16. Summary of Outcome Proposal withdrawn after public hearing: eminentdomain, housing key issues Major downtown landowner endorsed elements ofplan; presented counter-proposal to Board ofSelectmen Private initiative, private funding, within existingzoning and permitting Ongoing smaller-scale improvements
  17. 17. Lessons learned re DIF Need committed development partner with specificdevelopment plan & timeline, willing to absorbmunicipal risk However, can approve District and Financing Planseparately to set baseline for future growth DIF requires an acknowledged need for infrastructure– not elective No realistic option for Revenue Bond under current DIFstatute
  18. 18. LOCAL BYLAW OPTION:COORDINATION OF MITIGATIONAngus Jennings AICP
  19. 19. “Fair share” local bylaw Determine costs, incl. public / private share Identify potential contributors (direct abutters; or sites inproximity w/development potential) Allocate cost based on objective criteria such as: Frontage Land area Traffic generation (ADT or PM Peak) Assessed value (Potential traffic generation)
  20. 20. Potential methods of cost recovery Betterments BID Permitting mitigation
  21. 21. Questions & Discussion
  22. 22.  For each ProjectComponent: FY (occupancy) Use Sq. Ft. Jobs Total wages Avg. wages Retail sales
  23. 23. For eachProjectComponent: Totalconst. cost Constr.Jobs Totalcomp. Avg.comp. Materials

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