To read a related story, click here.
From 2001-2005, Fort Point's large property owners sat on vacant parcels, claiming that significant variances from zoning were required in order for them to fund infrastructure costs of sidewalks, privately owned streets and maintenance of parkspace (click here to read a related story). Today, as Fort Point's 100-Acre planning process enters its 5th year, the large property owners may receive a second windfall — publicly subsidized financing incentives to pay the cost of their infrastructure.
SAND Questions: Why aren't property owners moving forward to finance their own infrastructure, having spent five years appealing for zoning changes that enriched the value of the properties to pay these costs? Why is the public being asked to provide zoning changes to fund infrastructure AND financing incentives to fund the same infrastructure? When will the BRA pressure the large-property owners to understand that the candy store is closed — that the City will no longer provide access to an endless trough of variances, 121A tax breaks, financing incentives and other subsidies?
As one of the hottest housing market windows in Boston history opens and closes, Fort Point's vacant parcels with dense M4 zoning sit as parking lots. Somehow, in this same neighborhood of Fort Point, development of Midway Studios and Channel Center residential units moved forward without a five-year feed at the public trough.
Copyright (c) 2006 Globe Newspaper Company
The Boston Globe
February 17, 2006
MAYOR: LET STATE FUND FORT POINT INFRASTRUCTURE
Thomas C. Palmer Jr. and Andrea Estes, Globe
Boston Mayor Thomas M. Menino is proposing to jump-start development in the Fort Point Channel area by letting the state pay for roads, sidewalks, parks, and utilities.
In his annual speech to the Boston Municipal Research Bureau today, Menino is expected to propose legislation creating a device available not only in Boston but to all communities by which the state would sell bonds to prepare land in a commercial development for buildings. Under the city's potentially controversial proposal, the state would use income taxes from new jobs established in the new development to pay off the bonds sold to put in the basic infrastructure.
"This is a district planning tool to build infrastructure," said Mark Maloney, director of the Boston Redevelopment Authority, who yesterday offered a preview of Menino's speech. "This is bringing private-sector developers, the state, and the city together to raise bond financing."
Boston has long sought to shift some of its increasing financial burden to the state, contending it is the state's economic engine, contributing millions of dollars to state tax coffers but receiving back only a fraction of that in aid.
But persuading the Romney administration and the Legislature to assume the full cost of laying the groundwork for new buildings as municipalities traditionally have is likely to be a steep uphill burden.
"The city is talking about putting up nothing," said David I. Begelfer, chief executive of the Massachusetts chapter of the National Association of Industrial and Office Properties. "Didn't the state and federal government come in with billions of development dollars already?" Begelfer asked, referring to the Big Dig and the MBTA's Silver Line.
House Speaker Salvatore F. DiMasi has spoken with Menino about the proposal. A spokeswoman for DiMasi said he found it "intriguing" and set up a meeting with three House committee chairmen to consider it.
With his plan, Menino, who says the city is strapped by its dependence on the property tax, is rejecting an approach passed by the Legislature last year to serve the same purpose.
Under "district increment financing," the state allowed communities to commit the use of projected property tax revenue to sell and pay off bonds.
"We can't rely on the real estate tax to do district increment financing," Maloney said yesterday.
On another subject, Menino plans to propose financing new housing programs by boosting the so-called linkage fees that commercial and other large-scale developers are required to pay into a housing trust fund.
Saying a shortage of affordable housing has kept businesses from settling in the city, Menino will tell business leaders at the bureau's annual meeting that he will raise already substantial linkage fees by roughly 10 percent, to $7.87 per square foot for housing programs and $1.57 for jobs programs. The linkage rates had been $5.00 per square foot for more than a decade, from the time the legislation passed in 1987 until 2000. Combined, they currently are set at $8.62 per square foot.
"In the past few months I've been giving a lot of thought to Boston's future," Menino said yesterday. "We need to be competitive. Downtown development can support an inflation adjustment in the linkage fee. This would provide more money for job training and housing."
Paul Guzzi, president of the Greater Boston Chamber of Commerce, agreed that housing is a priority. "If we can increase the supply, that is an enormous plus," Guzzi said. "Boston has done a good job in terms of affordable housing. But we all have to do a better job."
Menino will argue the state should take a portion of the income taxes it will reap through new jobs in the Fort Point Channel area and use it to build the basic infrastructure that developers need. The city estimates income taxes at $40 million annually at full build-out, from about 12,000 new employees.
The city has done a detailed model of the neighborhood adjacent to Gillette Co. along A Street on the east side of Fort Point Channel and concluded it will take about $4.5 million a year to service the debt on bonds required to build roads, parks, and the like on 100 acres. The total initial cost of that infrastructure is estimated at $68 million, funded by 20-year bonds.
An official of Governor Mitt Romney's administration would not say whether the ambitious proposal has a chance. "We look forward to talking with the mayor's office, and we want to reserve commentary until we see the details," said Joseph M. Donovan, spokesman for the state Executive Office of Economic Development.
Thomas C. Palmer Jr. can be reached at firstname.lastname@example.org; Andrea Estes at email@example.com. PHOTO
Copyright (c) 2006 Globe Newspaper Company
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