Jay Gonzalez, the state's secretary of administration and finance, has $200 million in infrastructure funding he's trying to get out the door, and he's looking for development projects to give it to, he said Wednesday morning.
"We are anxious to get good applications we can approve, to get projects going," Gonzalez said, speaking at a NAIOP Massachusetts roundtable.
His office has made just one allocation, to Assembly Square in Somerville, from an original $250 million bonding authorization under the state's I-Cubed development infrastructure program.
Under I-Cubed, the state floats infrastructure bonds to finance infrastructure connected to private development projects, and uses future tax revenues from those projects to repay the bonds.
"Our goal is to use it as quickly as possible," Gonzalez said. "The economy has not helped. It really is designed to incentivize real, sustainable job creation. Hopefully, this [bond] program will help speed projects up, and make them more financeable."
Three projects applied for the initial round of I-Cubed financing: Federal Realty Investment Trust's $1.2 billion Assembly Square redevelopment, the Plymouth Rock Studios film project, and the $1.5 billion Westwood Station project. Gonzalez said Plymouth Rock Studios had its application rejected because, after accounting for film industry tax breaks, the development would not throw off enough tax revenue to finance its infrastructure costs.
Westwood station's fate remains up in the air. In June, the Patrick administration announced the project, expected to produce 3 million square feet of stores, offices and homes, would receive federal stimulus funds. But the administration later concluded construction at the site would not make use-it-or-lose-it cutoff dates. Gonzalez told Banker & Tradesman Westwood's developer, Cabot Cabot & Forbes, needs to figure out how it will finance its remaining infrastructure commitments before the state will float its I-Cubed bond. Westwood's total infrastructure spending is estimated at $118 million, including $73 million in public infrastructure projects.
"Assembly Square would not happen, but for the public financing," said Don Briggs, head of development for Federal Realty. Assembly Square is getting approximately $90 million in public infrastructure money, between I-Cubed, stimulus funds, and a federal transportation earmark for a new Orange Line station.
"Without this money, we would not be going forward today," Briggs said. "In the last 50 years, development has never paid for itself. The question is, what type of development is the public subsidizing? The Federal Highway Act is a significant subsidy to suburban sprawl. Only in the last decade has there been a shift in priorities. If we're going to reinvigorate urban areas, it will require some form of public subsidy. That will take a great deal of creativity."
I would also venture to recommend that the overpass connects with the T parking garage. Since persons wanting to reach the station from the reservation could cut through the parking garage.