The vote to post bonds for the DIF was nine to one at the full Board of Aldermen vote.- Photo by Andrew Firestone

By Ashley Taylor and Andrew Firestone

In what one alderman called a “historic vote,” the Board of Aldermen voted at a special meeting on Monday, May 2, to post $25,750,000 in bonds for the Assembly Row District Improvement Financing (DIF) project, allowing the City to proceed with infrastructure improvements in Assembly Square. This development will be crowned by the Assembly Square Orange Line stop, provided by State and private funds, which depended directly on the City’s approval of the DIF project.

Many pieces of the mayor’s plans for Assembly Square fell into place on Monday.  The vote, in addition to providing funds for extension of Assembly Square Drive, installation of a storm water outfall conduit, and construction of a new network of roads at Assembly Square, also fulfills the City’s role in the Tri-Party Agreement, unlocking funds for the Assembly Square Orange Line stop provided in part by the developer, FRIT, now contributing $15 million for the stop. Additionally, on Monday, FRIT and the City executed an agreement for promoting jobs for Somerville workers in Assembly Square.

The Tri-Party Agreement between the city, the state, and the developer also unlocks $50 million from the State for construction of an Orange Line station at Assembly Square.  According to the agreement, the city needed to provide $25 million for infrastructure improvements through DIF by this Wednesday, or the agreement would have been broken, and the state money for the Orange Line would have been withdrawn.

The vote to post bonds for the DIF was nine to one at the full Board of Aldermen vote.  Ward 7 Alderman Robert Trane was absent.  Ward 6 Alderman Rebekah Gewirtz was the only dissenter.

Gewirtz explained that she planned to vote against the proposal because she felt there were not enough safeguards for the city in case of economic disaster. “We do not have enough assurances to go forward.  The zoning was supposed to unlock Assembly Square, and what we got was a strip mall.”

In particular, she was frustrated that the developer had refused to add a commitment to R&D and a guarantee to have 50 residential units on the market to the requirements it must meet to avoid paying the City the $15 million surety in case FRIT fails to act.  “We have not received assurances, through the documents that we have received to date, that we will get research and development, which is badly needed and is what might make this gamble worth it.”

In the Finance Committee meeting earlier that evening, city planner Monica Lamboy reported that FRIT had already made a commitment to R&D during the permitting process.  As for guaranteeing 50 residential units within three years of starting construction, Don Briggs, of FRIT, said that Avalon Bay, its residential partner, will be responsible for building those units, and would  not want to take on the risk of a penalty for their partner’s performance.

Overall, the aldermen who voted to post the bonds felt convinced that the DIF project was an “investment” and an “opportunity” (Ward 1 Alderman William Roche) rather than seeing it as a gamble.  As Alderman Tom Taylor said, “I look upon this really as an investment. An investment inherently has a risk factor and that risk factor is that perhaps because of the economics, things don’t happen the way that we anticipate it to happen. However in this particular vote I feel that we have some safeguards.”

Alderman William White concluded that the DIF bond was not an “unreasonable risk on our taxpayers.”

Alderman Roche emphasized the Orange Line stop as an incentive to appropriate the DIF bonds:  “If we don’t do this this evening, there will be no Orange Line stop; if there’s not Orange Line stop, there’s no development.”

Alderman-at-large Bruce Desmond and Ward 2 Alderman Maryann Heuston acknowledged that times have changed and their opinion that DIF is necessary.  Desmond, referring to Gewirtz’ persistent claims that FRIT is violating its covenant with the city, said “it’s unfair to characterize Federal Realty as having broken previous agreements and covenants because I don’t think they have. I think circumstances have changed considerably since that covenant.”

Heuston continued in that vein: “If things hadn’t changed, we wouldn’t be discussing this.  The fact of life is this: things do change. The thing that separates the men from the boys is when things do change, that you have the ability to pick yourself up and figure out how to keep moving forward rather than retreating in the dark.”

Along with the economic risks of posting the bonds, the aldermen grappled with trying to assure that the jobs the DIF would create would go to Somerville residents—without requiring businesses to hire local workers, a practice that City solicitor said is illegal.

According to Anne Thomas, Special Counsel to the BOA, the agreement executed between FRIT and the City has three provisions.  FRIT agrees to put $100,000 into a job training fund for Somerville workers, encourage retail and office tenants to hire Somerville workers and advertise in Somerville newspapers first and provide retailers with a list of Somerville contractors in hope of providing Somerville construction jobs.

The agreement falls short of requiring businesses to hire a percentage of Somerville workers or face a penalty, something a group of 60 residents, led by Fred Berman, had proposed the city do. The residents signed a proposal to require businesses in Assembly Square to make one third of their employees Somerville residents or pay a penalty that would go into a job training fund.

Though the BOA noted the proposal, the City Solicitor Frank Wright said that it would “function as a tax and is therefore illegal.”  Thomas elaborated, “cities and towns do not have the authority to create trust funds and impose fees on people that fund [them].  That has to be done through state legislature.”

Furthermore, Curtatone said that even if the city tried to create such a trust fund through what’s called a home-rule petition, he would veto it:  “If this passes, I am vetoing it.  I will not support any such home-rule that disadvantages, giving us a disadvantage in the competition for companies like Vertex.”  “Before we think about over-regulating and prescribing and conditioning who and how people do business here, think about this: flat for 20 years.  0.44 jobs per resident when you want a 1:1 ratio.”

After the meeting, Briggs was pleased with the outcome. “This has been a long road. I think the Board of Aldermen did a great job considering all the facts. I think they landed on a good decision. We’ve got a great partnership and I look forward to finishing this project.”

Alderman O’Donovan was likewise elated:  “I feel relieved and encouraged, but also like we spent over ten years on this. It’s nice that something’s finally going to start happening down there.”

With the approval of the DIF bonds, FRIT can go forward with its development plans, breaking ground on the DIF’s three development blocks this summer.