Infrastructure Financing Mechanisms in Massachusetts

1. INFRASTRUCTURE FINANCING
MECHANISMS IN MASSACHUSETTS
MAPD Annual Conference, Plymouth June 3, 2010

2. Welcome, and Panel Objectives
 Review recent Massachusetts policies as vehicle for
Public Private Partnerships to finance public
infrastructure
 Policy context
 Examples & lessons learned
 Questions & discussion

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. 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. A SMALL TOWN TRIES DIF
DOWNTOWN MARSHFIELD
Elizabeth Bates MAA & Angus Jennings AICP

6. DOWNTOWN MARSHFIELD:
“OPPORTUNITY SITE”

7. 1996 Downtown Revitalization Plan:
Pre- and Post-Sewer Buildout

8. History of Marshfield DIF Initiative
 Reviewed statute and regs in detail when DIF was
enacted in 2003
 Downtown had development interest, but no private
developer committed to major infrastructure
improvements
 DIF was pursued in hopes it would be catalyst for
coordinated, bolder development proposals
 Was introduced concurrent with zoning for
downtown mixed-use

9. Key Features of 40Q Proposal
 10-year history/political support
 Planning resources ($50k) available from Town
Meeting allocation
 Land taking for roadway realignment
 Assembly of Town-owned 2-acre parcel for
redevelopment through RFP
 Estimated Buildout: 150 housing units; 40,000 sf
commercial; 10,000 sf office

11. Post Development Site Plan

13. Downtown Marshfield:
District Improvement Financing
 Project Costs
 Admin/Legal
 Property takings
 Roadway/sidewalks/
streetscape: hard and
soft costs
 Long term debt
repayment
 Cost: $10.7 MM
 Revenue Sources
 Tax increment (1-5)
 Tax increment (max
buildout)
 RFP proceeds for
redevelopment
 Investment income
 Bond anticipation note
 Revenue: $17.5 MM

14. 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 bonds
and minimize the Town’s risk – secured by an
enforceable agreement – would have been
necessary to win Town Mtg approval

15. Regulatory framework for agreement
 I-Cubed is a more recent policy than DIF, and
includes some useful innovations that would be
helpful – perhaps needed – to execute DIF
 Infrastructure Development Assistance Agreement
(IDAA)
 Municipal Liquidity Reserve for each “Assessment
Parcel”

16. Division of Labor: Municipal
 Concept/vision
 Mapping
 Narratives
 Ensure consistency of development projections
w/existing zoning
 Consensus building
 Documentation/assembly of application
 Close communication w/EACC and OBD

17. 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

18. Summary of Outcome
 Proposal withdrawn after public hearing: eminent
domain, housing key issues
 Major downtown landowner endorsed elements of
plan; presented counter-proposal to Board of
Selectmen
 Private initiative, private funding, within existing
zoning and permitting
 Ongoing smaller-scale improvements

20. Lessons learned re DIF
 Need committed development partner with specific
development plan & timeline, willing to absorb
municipal risk
 However, can approve District and Financing Plan
separately to set baseline for future growth
 DIF requires an acknowledged need for infrastructure
– not elective
 No realistic option for Revenue Bond under current DIF
statute

21. LOCAL BYLAW OPTION:
COORDINATION OF MITIGATION
Angus Jennings AICP

22. “Fair share” local bylaw
 Determine costs, incl. public / private share
 Identify potential contributors (direct abutters; or sites in
proximity 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)

24. Potential methods of cost recovery
 Betterments
 BID
 Permitting mitigation

25. Questions & Discussion

26.  For each Project
Component:
 FY (occupancy)
 Use
 Sq. Ft.
 Jobs
 Total wages
 Avg. wages
 Retail sales

27. For each
Project
Component:
 Total
const. cost
 Constr.
Jobs
 Total
comp.
 Avg.
comp.
 Materials