Bob Fishman publishes “Thinking outside the box to build a square”Print PDF
Bob Fishman, chair of the firm’s Land Use, Permitting and Development practice group, published “Thinking outside the box to build a square” in CommonWealth Magazine on April 14. 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 municipalities.
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 (a parking lot and a parking garage) 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.
After the infrastructure improvements and the private development components are constructed, and after other important negotiated preconditions are met, the city of Quincy will issue municipal bonds to reimburse Street-Works for its costs in constructing the infrastructure improvements. The debt service on these bonds will be paid principally from Chapter 121A payments to be made to the city by Street-Works after the project has started to generate revenue from sales and rent, plus revenues from the new city-owned parking garages.
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.
Bob notes that the land disposition agreement signed between the city of Quincy and Street-Works is among the most complicated documents with which he has been involved during more than 30 years of real estate practice. Challenging economic times require creative solutions. The key to success for municipalities that see Quincy as a possible model is to be willing to work with developers to explore new approaches to redevelopment, while always minimizing the financial and other risks.
For a copy of the full article, please click here.