By Ashley Taylor

Aldermen and members of the public are questioning the financing and potential use of eminent domain in a new plan that could displace longtime businesses and impact the local economy for 30 years.

The program, known as District Improvement Financing, was discussed last week at a Board of Aldermen finance committee hearing.

Some worried that the measure might disappoint expectations and leave the city in debt. Others took umbrage at the list of properties that would be potential targets of eminent domain under the plan and the fact that the list was made public.

District Improvement Financing is a state-run program, authorized by Massachusetts General Law 40Q in 2004.  Under the law, cities can apply to invest property taxes from property-value increases within a designated area – or, as the case may be, projected increases in property taxes – directly back into that area for a specified period.  The idea is that city improvements in the area, known as the DIF, will encourage development, raise property values, and create more revenue for more improvements in a positive-feedback loop.  Somerville’s proposed DIF would last 30 years.

On September 23, the city’s planning department submitted a proposal to the Board of Aldermen to establish a 460-acre DIF extending from Porter Square to the Inner Belt.  The October 6 meeting was the first time aldermen discussed that proposal, which it must approve in order for the application to continue to the state.

Monica Lamboy, the city’s planning director, presented the measure as a means of improving Somerville’s aging infrastructure and giving more cohesion to an area with many small, diverse parcels of land.  Lamboy said that the city’s commitment  would attract developers and that revenues would serve as a funding alternative to state and federal grants.

The plan, Lamboy explained, would allow the city to borrow more money each year than it could otherwise, because the 2004 law allows a city to post bonds based on predicted revenue from the DIF without changing the city’s right to bond against the General Fund.

Not everyone was excited about the idea of more debt.  State Representative Denise Provost, who served on the state legislature’s Joint Committee on Bonding, Captial Expenditures, and State Assets, attended the meeting to point out the risks of “using expectations about the future as collateral for present debt,” as the DIF would do. She thought that the OSPCD’s growth projections needed to be more detailed.  Provost described District Improvement Financing as a debt instrument that Massachusetts, as a state with very high debt, created to “make sure that the debt gets off the books of the state.”

Ward Two Alderman Maryann Heuston described the DIF as a way to complete, “on our dime,” city projects that she believes the city might otherwise be able to fund through grants.  Lamboy cited a lack of grant money as a motivation for the DIF.

Alderman-at-Large Bill White raised concerns that committing tax revenues to a DIF-specific fund would be a “recipe for financial disaster,” because it would take money from the General Fund and restrict its use to projects within the DIF.

White asked the OSPCD to document that the governing body of the DIF have power to transfer DIF monies to the General Fund.  The law states that, “the city or town may retain all or part of the tax increment of an invested revenue district for the purpose of financing the development program,” and that the city will determine the percentage of the tax increment that will stay in the DIF fund.

Finances were not the only part of the plan people criticized.

The DIF application requires a list of properties that the City would consider purchasing with DIF money.  The proposal for a DIF in Somerville includes an “eminent domain list,” as people call it, that is 35 items long.  When Lamboy presented the list at the September 15^th public hearing, property owners were aghast.

Only after the Sept. 15 meeting, at which the eminent domain list was made public, did the city’s planning department send a notification to each property owner on the list, which included a proposed price for the property and invitation to meet with the city to discuss the eminent domain possibility.

Joseph Tagliente owns the property that Burger King rents at 185 Somerville Ave.  Tagliente first found out that his property was being considered for eminent domain when, on Oct. 1, he received a letter from the city notifying him that his property was on the list and quoting a price that he called “absurd; it’s an insult.” Tagliente also took issue with the casual way the news was communicated.  The letter, Tagliente said, came in “a non-descript envelope,” and was “too casual…perhaps someone was crossing their fingers that I wouldn’t pay attention to it.”

Three property owners on the eminent domain list spoke at the meeting, including Tagliente, John Eleftherakis, of John’s Auto Sales and Ricky DiGiovanni, of Ricky’s Flower Market.  DiGiovanni delivered an emotional speech for his business, an open-air flower market which the City is considering turning into a parking garage.

“You know, it’s been said that flowers and music are the international language, and never has it been more true than in Somerville, and in particular, Union Square, where people have come and stayed from far and near to work and live and play in this community,” he said.

Lamboy emphasized that the city hoped to buy properties by negotiated sale whenever possible and that eminent domain would be a last resort.  She said most of the properties on the list had been considered for municipal uses in conjuction with previous city projects, though property owners were not notified about those plans.

Both aldermen and businessmen at the meeting said that publishing the eminent domain list – even if the properties are never taken by the city – does irreversible damage to listed businesspeople and property owners.  Stephen Mackey, President of the Somerville Chamber of Commerce, said “to the owners, their families and heirs, being on an eminent domain list is tantamount to a taking.”

In order for the DIF application to continue to the state, the Finance Committee of the Board of Aldermen must approve the DIF proposal.  To conclude the meeting,  Heuston, the Chair of the Finance Committee, assured everyone that “as long as I am the Chair of the Finance Committee, we will take as long as we like and we will vote as we please on this,” and that “this is not a done deal.”