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Mayor makes case for Assembly Square DIF | Post Somerville

Mayor makes case for Assembly Square DIF

by Tom Nash on November 23, 2010

A plan to fill a $63 million gap in infrastructure funding for Assembly Square development was met with skepticism at a public hearing on Monday, with one alderman declaring it akin to “putting a gun to our heads.”

The Nov. 22 meeting of the Board of Aldermen Finance Committee saw the first official explanation of how Mayor Joseph Curtatone aims to make up for lost federal funding that was to go toward the construction of an Orange Line MBTA station at Assembly Square.

That stop is seen as critical to a development planned by Federal Realty Investment Trust that would bring a planned 2,100 apartment units, 1.7 million square feet of office space, a hotel and major retailers such as IKEA.

The city encountered a roadblock, however, when it learned it will be receiving only $2 million of a planned $25 million federal earmark for the station.

Another setback occurred when IKEA decided to back out of a plan to break ground on a store next summer. As a result, Office of Strategic Planning and Community Development Director Monica Lamboy said $40 million in state I-Cubed won’t be coming through.

While the state is promising to pay for the other half of the $50 million T-stop project, Curtatone said the city began looking at District Improvement Financing (DIF) as a way to come up with the difference while funding other necessary projects.

At Monday’s meeting, and at a press conference earlier that day, Curtatone stressed the funding needed to be in place soon, or the city risked losing the development altogether.

“Nothing happens down the road without that station,” Curtatone said. “We’re at a time crunch right now.”

Under the DIF plan, a $25 million bond taken out by the city would be paid back over 30 years, as tax revenue generated within 38 acres of Federal Realty’s development would go to that area directly, which would pay for public utilities and a stormwater drain pipe.

Unlike the DIF plan centered around Union Square, no properties would be taken by eminent domain. While that plan has been under review by the Finance Committee since October, Curtatone said he did not expect the same opposition.

“(The Assembly Square DIF) is very narrow, and it’s very clear how it works,” Curatone said.

Curtatone stressed Monday night that the plan needs to be approved locally by the beginning of December, a timeline criticized both by aldermen and the public, both of whom also questioned why the city would take on $25 million in debt for the development.

“The people who live across from Assembly Square, in Ten Hills, they don’t know this is happening,” Ward 4 Alderman Walter Pero said, adding, “I think these cameras should be on … so they can see this DIF timeline that’s being shoved down our throats.”

Don Briggs, senior vice president at Federal Realty, defended the DIF plan as a small part of public funding for the project, saying that, ultimately, “for every dollar the public invested, we’ll have invested 13.”

“You’re not mortgaging additional tax revenue for speculative development,” Briggs added. “There is very little to no risk for the city with these bonds.”

Mystic View Task Force member Jane Bestor was among four members of the public who questioned the timing and the utility of the DIF plan.

“I think it smacks of voodoo economics,” Bestor said, noting the plan does not address the cost to the city for police and fire services, snow removal or the additional burden to the school system from the new residential units.

Somerville Chamber of Commerce President Steve Mackey was the only speaker who expressed outright support for the proposal, noting the partnership between city, state and federal entities “is in stark contrast to the Union Square DIF, which has no partners.”

Alderman-at-Large Bill White repeatedly asked for more details from the city and Federal Realty about how the money was being allocated, at one point noting, “I feel like you’re putting a gun to our heads.”

When White asked why the city shouldn’t wait to see if the federal government does restore funding to the Orange Line station, both Curtatone and Briggs stressed the fate of the project could be in the balance.

“Time is money at this point,” Briggs said. “We can’t stop.”

Public comment on the DIF plan closes on Nov. 29. On Nov. 30, the Finance Committee will decide whether to send the proposal to the full board meeting on Dec. 2.

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{ 1 comment… read it below or add one }

YuppieScum November 30, 2010 at 3:53 PM

I guess my question is, why does the IKEA seem to keep being pushed back?

Also, how come that federal funding was lost? Or was it never really there to begin with?

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