Bob Fishman publishes “Innovative Financing Fuels Quincy Center Development”Print PDF
Bob Fishman, chair of the firm’s Land Use, Permitting and Development practice group, published “Innovative Financing Fuels Quincy Center Development” in Banker & Tradesman on July 25. Bob, who serves as special counsel to the City of Quincy, discusses how the innovative financing that fueled the Quincy Center redevelopment project can serve as a model for other developers when working with a municipality.
City leaders had been working for years to redevelop Quincy Center and to create a mixture of retail, office, hospitality and residential spaces. Street-Works Development LLC, a New York-based developer, proposed a novel way to finance the massive $1.3 billion project, one that had never been tried in Massachusetts.
In a nutshell, Street-Works, as the redeveloper, will purchase two city properties and combine them with other privately acquired land. Street-Works will then acquire the necessary permits and use private financing to make significant infrastructure improvements, such as new roads, sidewalks, landscaping and garages needed for the overall project.
What makes this approach unique is that, instead of a city first taking land, building the necessary infrastructure and then trying to find interested developers, Quincy is leveraging its power to issue bonds in order to assure the developer that, as long as it meets certain requirements, its investment in initially privately constructing the future public infrastructure will be covered.
To make this kind of partnership successful for both the developer and the municipality, Bob notes that developers may wish to consider the following points when entering into a land disposition agreement or similar public-private partnership arrangement:
- Establish a secure mechanism to ensure later reimbursement by the municipality for private up-front infrastructure costs after the project is completed;
- Secure enough time to achieve permitting and marketing, plus the flexibility to alter the project to meet changing market demands;
- Provide for the flexibility to bring in partners and lenders, especially partners who specialize in certain product types, such as rental housing;
- Achieve as much “by right” zoning as possible at an early stage in order to eliminate the risk that discretionary approvals will be denied or appealed at a later date; and
- Establish objective criteria for the municipality to determine whether or not the developer has met its obligations to the municipality.