The Quincy City Council approves Historic $1.28 Billion Downtown Redevelopment Plan

The Quincy City Council approves Historic $1.28 Billion Downtown Redevelopment Plan

QUINCY, MA – The Quincy City Council approved the master agreement for a $1.28 billion redevelopment of Quincy Center anchored by a unique financing plan that Mayor Thomas Koch and the City’s private development partners, Street-Works Development LLC, believe could become the new model for urban redevelopment projects across Massachusetts.

The project – which marks the largest private investment in Quincy’s history – will create 4,100 construction jobs and 5,700 permanent jobs as part of a new mixed-use downtown that includes more than 1 million square feet of new office space, more than 700 housing units, two hotels, a cinema and entertainment complex, and 570,000 square feet of new retail and restaurant space in Quincy Center.

At the heart of the master agreement is a financing mechanism that will require revenue from the new private development to pay for $227 million in public infrastructure costs, a wholesale reversal of traditional urban redevelopment by requiring the private investment to come first.

The mechanism, called the “purchase model,” largely eliminates the public risk often associated with redevelopment projects: The City will purchase the public infrastructure – including parking garages — from Street-Works only when new buildings are occupied and producing enough revenue to cover the City’s debt costs.

The Koch administration and Street-Works spent nearly three years negotiating the terms of the agreement with legal and financial teams that included a number of the most experienced land-use lawyers in Massachusetts. It will be the first large-scale development project in Massachusetts to use the framework, officials said.

“This is an unprecedented opportunity and a private-public partnership in the truest sense that will make Quincy the economic engine for the entire region in the years to come,” said Koch. “Most importantly, this historic agreement protects our taxpayers. We do not borrow any money until the project is producing revenue, and no money from our general fund or any increased property taxes on our homeowners will go toward this project. The financing is entirely project-based.”

The City Council held 10 hearings totaling more than 40 hours of deliberation on the agreement through a subcommittee process that ended on Thursday with an 8-0 vote in support of the agreement, which virtually ensures that the formal vote by the Council on Monday will be identical.

“The passing of the LDA is a huge milestone for this project, bringing us one step closer to the realization of the New Quincy Center.” said Ken Narva, Co-Founder and Managing Partner of Street-Works, “Through the years of hard work with the City and the Councilors, together we are ensuring Quincy is poised to grow and thrive for future generations.”

The primary plan calls for $277 million in public infrastructure improvements as part of the project, including new underground utilities and public parking facilities with 3,500 spaces. The City and Street-Works are working to secure $50 million in state and federal grant funds for a portion of the improvements, with the remainder to be financed by new taxes and parking revenue from the downtown project.

Under the agreement approved by the Council, called a Land Disposition Agreement, Street-Works will pay the City $30 million to cover downtown-related debt already incurred through construction of the Quincy Center Concourse and other related redevelopment costs. In return, the agreement allows for the primary project to be expanded by up to 750,000 square feet of development and an additional $11.5 million in public improvements.

The agreement includes firm benchmarks in which Street-Works must show that buildings are leased, parking spaces occupied and adequate revenue is flowing, before the City is obligated to pay for the public improvements.

Under the plan, the City will use state urban redevelopment law known as Chapter 121A as the property tax structure for the development. After development, the City expects to receive $10.1 million in property tax revenue. Of that, 6.8 million will go toward paying for the public improvements, and $3.6 million will come straight to the City’s general fund.

Other new revenues such as new meals taxes, hotel room taxes and property taxes outside the immediate project area are expected to generate at least a total of $7.1 million in new revenue beyond what will be used to pay for the public improvements. In the end, the agreement will mean a 4 to 1 ratio of private spending to public investment, a figure substantially higher than most traditional urban redevelopment projects, Koch said.

Other project highlights include:

• A $10 million payment to the City from Street-Works to fund public improvements outside of Quincy Center.
• 50-cent per square foot maintenance fund paid for by Street-Works to fund improvements within the development district.
• $10,000 contribution to the City’s Affordable Housing Trust Fund for every housing unit developed.

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