City of Somerville
Massachusetts

Agenda Item
190978
Placed on File
May 12, 2011 7:00 PM

II.2 Conveying the Assembly Row DIF Tri-Party Public Funding Agreement.

Information

Department:Strategic Planning & Community DevelopmentSponsors:
Category:Mayor's CommunicationFunctions:Communication

Body

To the Honorable Board:

 

I am respectfully forwarding for your review and discussion a copy of the agreement between Federal Realty Investment Trust (FRIT) and its subsidiary entities owning Assembly Row as tenants in common, the Commonwealth of Massachusetts, and the City of Somerville (the so-called "Tri-Party Agreement"). 

 

During the past few months, the State, the City, and the Developer have been working assiduously to develop a plan for funding both the Orange Line station at Assembly Square and the Assembly Row infrastructure.  For design and construction of the MBTA Station, the Commonwealth has committed $18 million in state grants (and up to $2.86 million in additional state grants, if needed), plus over $5 million awarded in federal multi-modal funding, and the Developer will fund its $15 million obligation for the station.  In addition, to reimburse the Developer for the infrastructure, the City has committed to request that the Board of Aldermen authorize general obligation bonds generating net proceeds of at least $25 million, with a stated commitment from the Developer that if the Developer fails to complete Development Blocks 1, 2, and 3 by spring of 2013 (by which time only $15 million would have been disbursed), the Developer is obligated to reimburse the City for the $15 million and it would be understood that the City would not go to market with the remaining $10 million.

 

Finally, the Agreement provides if the federal funding for the T-station (which is currently on hold) is made available at a later date, those funds will be used: first, to fund project construction cost overruns directly related to the Assembly Square Orange Line station, then to reimburse the City with one-half of the remaining funds up to $12 million, and only then to the MBTA and the Commonwealth.

 

OSPCD and Law Office staff will be available to answer any questions you may have.

 

Sincerely,

 

Joseph A. Curtatone

Mayor

Meeting History

Mar 10, 2011 7:00 PM Video Board of Aldermen Regular Meeting
RESULT:REFERRED FOR RECOMMENDATION
Mar 31, 2011 6:00 PM  Finance Committee Committee of the Whole
RESULT:KEPT IN COMMITTEE
Apr 6, 2011 7:00 PM  Finance Committee Committee Meeting

The parties to the agreement are the City of Somerville, Federal Realty Investment Trust (FRIT), the Executive Office of Housing and Economic Development, the Executive Office of Administration and Finance and the Mass Department of Transportation (Mass DOT). Mayor Curtatone, Ms. Thomas and Mr. Briggs reviewed the agreement with the committee. It was noted that the document is still in draft form and that certain sections had not yet been final reviewed by FRIT and that the City is awaiting additional information from the State. Members reviewed the agreement and asked for clarification regarding what would happen if the developer went bankrupt, on the section(s) dealing with I-Cube funds, on the Guarantee related to the reimbursement to the City if “core and shell” construction is not completed within set time period, and guarantees regarding the performance of work on the infrastructure. The committee expressed its desire to have Somerville residents receive preference for employment during construction and Mayor Curtatone replied that he would insert language in the covenant to accomplish this. Mr. Briggs will supply the committee with a copy of the MOU between FRIT and the MBTA.

RESULT:KEPT IN COMMITTEE
Apr 13, 2011 7:00 PM  Finance Committee Committee Meeting
RESULT:KEPT IN COMMITTEE
Apr 21, 2011 7:00 PM  Finance Committee Committee Meeting
RESULT:KEPT IN COMMITTEE
May 2, 2011 6:00 PM  Finance Committee Committee Meeting

Ms. Thomas reviewed the principle changes to the agreement, as requested by the parties to the agreement, and stated that the parties were presenting it, as is, for an up or down vote.

RESULT:KEPT IN COMMITTEE
May 10, 2011 6:00 PM  Finance Committee Committee Meeting
RESULT:WORK COMPLETED
May 12, 2011 7:00 PM Video Board of Aldermen Regular Meeting

Ald. Trane recused.

RESULT:PLACED ON FILE