Many years ago, we were promised that an exclusive sweetheart deal with FRIT would bring jobs and commercial development to Somerville in Assembly Row. The much needed commercial development would go on this large plot of open land the city controlled, bringing tax revenue to relieve the burden on homeowners and renters.
10 years later, Somerville has invested significantly in infrastructure in Assembly and has renegotiated the sweetheart deal with FRIT twice – in FRIT’s favor – and we still haven’t seen the promised commercial development. FRIT has managed to build plenty of luxury apartment housing and retail, but only two office buildings.
The larger of those two buildings, for Partners Health, pays no taxes to the city.
This plan was pushed by the mayor’s office, the developer, and the planning department as crucial for bringing commercial development to the city. 10 years later, we’re still waiting for what was promised.
Now it’s 2017 and Union Square is the new Assembly Row. Another massive developer and another set of sweetheart deals from the city are being pushed on us as being critical for commercial development in Somerville. And the pressure is on the Board of Aldermen to pass the zoning that constitutes their final approval of this plan.
But once again, it’s a set of deals that doesn’t prioritize timely commercial development, and doesn’t provide guarantees needed to protect the city’s finances and the residents ultimately responsible for the taxes.
Who has skin in this game? It’s easy to count what the city has at stake.
Since beginning the Union Square process, the city has taken on nearly $300 MILLION in new debt obligations – much of which is directly enabling this development.
- $50 MILLION – payment to the MBTA to bring the Green Line to Union Square
- $94 MILLION – project to improve sewer capacity in Union Square to accommodate the new housing and development
- $130 MILLION – for a new Somerville High School (https://tuftsdaily.com/news/2017/04/04/somerville-board-of-aldermen-authorizes-bond-issue-for-new-high-school/)
These debt obligations are already happening and the city starts racking up interest fees immediately, whereas the buildings we hope to see result from them may never arrive. The revenue to repay them must come from taxes on the new development – and as have seen in Assembly Square that may take a long time, or never come at all – or from us, the residents left holding the bag.
By contrast, what does the Developer have to lose?
The Developer has no up-front financial obligations to the city. The only payments they have committed amount to less than $10 per square foot they get to build – and only paid as they actually build the properties over the course of 30 years.
(In contrast, a small medical marijuana distributor in Davis Square is contributing over $100 per square foot in community benefits payments – and all within 3 years. Source: http://somerville.wickedlocal.com/news/20170410/medical-marijuana-dispensaries-coming-soon-to-davis-square-and-east-somerville )
The Developer has no obligation to create commercial space. In fact, according to the current agreements in place they can build nearly 400 luxury 1-bedroom and studio units in a 27-story luxury high-rise in Union Square (and 80 affordable housing units, somewhere) and then walk away, leaving the city holding the bag for all of the other costs.
If the developer wants to build more luxury residential and retail, the story gets even better for them: all the city is currently requiring of them is one small office building before they get back to dominating the skyline and neighborhood with as much luxury residential as the zoning allows – which at this point is nearly 1000 units, total.
That lonely office building isn’t required to be built until years after the Green Line extension arrives… and we know how long we’ve been waiting for that.
And as for future risk? The deals contain all sorts of protections and clawbacks for the developer that insulate them from future cost increases or payments to the city. They even get to purchase the parcels seized by eminent domain at the city’s cost. We will be stuck with the terms of this deal, non-negotiably, for 30 years.
As in Assembly Row, the city is telling us to trust the developer’s good faith and financial interest to bring us commercial buildings, jobs, and tax revenue. As in Assembly Row, there are no guarantees in place to ensure we get them. And as in Assembly Row, the Board of Aldermen are being pressured to rush approval of this process.
Worst of all: the city has not even prepared a financial impact study of what all these costs mean to the city’s finances, and how long it will take for this proposed development to start bringing revenue into the city to give residents some relief on their taxes and rents.
Last night, Katjana Ballantyne (Ward 7 Alderman) asked for this analysis and was told by the city that it doesn’t exist. Tonight, she and the other Alderman are being asked to vote to approve this plan and zoning anyway.
This is a sweetheart deal that hasn’t been publicized to the residents of Somerville, hasn’t had proper scrutiny, isn’t negotiated to benefit the community, and is being rushed far in advance of the customary 90 day review process allowed of all zoning. Most of all, it’s a deal designed by the developer and endorsed by the mayor – not structured by our aldermen and endorsed by the residents.
Some of our Aldermen have been fighting hard to get answers to these risk questions and get guarantees that protect us, the residents. Notably, Katjana Ballantyne (Ward 7), Mark Niedergang (Ward 5), and Matt McLaughlin (Ward 1) have been working to amend the zoning to address neighborhood concerns – and I thank them for their efforts. All of the Aldermen have been in meetings this week and last that went until after midnight debating this proposal as we in Somerville wait and watch from the outside.
The deal is being improved with every late night of work by the aldermen, but there’s a long way to go before we get something that’s right for Somerville.
Alderman Katjana Ballantyne said it well last night:
“We can’t keep kicking the can down the road to generate more revenue. Priority is commercial office development. It about the people who live here in Somerville now.
Jobs and tax relief will come when we have office space for new businesses to locate here. New businesses in turn will provide new jobs here and new commercial tax revenues to help us pay for schools, roads, police, fireman and all of the things that we now pay for as residents, almost all alone.
There has been no fiscal analysis to support the developer’s position since the city tripled its debt obligations.”
Now, with less than 40 days of consideration, our aldermen are being pressured into a vote that leaves all of the risk on the City of Somerville and its residents while handing over the keys to the future of Union Square to a developer with no skin in the game.
I encourage the aldermen to hold the line and give this zoning its full and proper time for consideration. I believe that there is no need to rush into a deal – with incomplete information – that will bind the city and its residents for the next 30 years.