Somerville —
The proposed $25.8 million municipal bond is the central supporting element or keystone of the more than $1 billion redevelopment of Assembly Square. The bond will fund basic public infrastructure (road, water, stormwater, sewer, utility, traffic, lighting, and sidewalk improvements) that will:
- unlock funding for the new Orange Line transit station construction; and,
- be the groundwork for the first phase waterfront, mixed use development of the Assembly Square plan.
The keystone public infrastructure, which would be funded by the municipal bond, is the city’s component in the public-private partnership – and a prerequisite of the District Improvement Financing (DIF) program which has been approved by the Commonwealth of Massachusetts.
The $50 million Orange Line transit station construction funding, from the Commonwealth, Federal Realty Investment Trust and IKEA, is already in place. The Massachusetts Bay Transportation Authority Board has approved agreements that will enable advertisement for construction bids this spring for completion within 36 months. But, the City must act on the infrastructure bond.
The more than $1 billion redevelopment plan is already in place: 2,100 residential units, a 200-room hotel, more than 500,000 square feet of retail, restaurants and entertainment (including a 56,000 square foot movie complex), and 1.75 million square feet of office, R&D and manufacturing space make up whole plan.
The developer is well suited to deliver. Federal Realty is a $4B equity real estate investment trust and has already invested $130M in its Assembly Row plan.
Assembly Row is the next great Boston neighborhood of the 21st century. “Bigger than The North End, more river frontage than Beacon Hill, more green space than South Boston. Assembly Square is arguably the largest new neighborhood since the Back Bay was created.”
To carry the bond, the City would rely on tax revenues generated by a “DIF district” (which is less than 1.5 percent of the city’s acreage and less than 1% of the current tax base) consisting of approximately 400 housing units; approximately 255,800 square feet of retail, and a cinema complex. The DIF district represents 11 percent of the taxable value of Assembly Row.
Reports and testimony of city consultants and department heads and Federal Realty representatives have been vetted in public meetings and hearings before the Board of Aldermen. These reports and testimony have demonstrated that, after calculating increased municipal services required for the DIF District, property values and expected city tax revenues will be more than sufficient to service the debt and that surplus revenue will flow to the general fund. In the event of failure to complete the DIF buildings, Federal Realty “absolutely, unconditionally, and irrevocably guarantees the obligation” pursuant to the terms and conditions of the agreement up to $15M. The Tri-Party Agreement between the City, the Commonwealth and Federal Realty will be binding upon successors and assigns.
If the bond does not prevail, the largest job-generating project in Somerville’s history — Assembly Row’s 18,000 construction jobs and 21,000 new permanent jobs — will not be realized. More than a decade of work will fall to the ground and redevelopment will take many, many more years.
After nearly fifteen years of participating in the redevelopment process and upon review of the most recent reports and evidence, the Somerville Chamber of Commerce believes that bond approval is the most prudent course for all the inhabitants of Somerville and so hopes that “190988 the Appropriation and authorization to borrow $25,750,000 in a bond for the cost of implementing the Assembly Row DIF District and Development Program” prevails.