9/7/2006
Press Release
Mayor’s Infrastructure Investment Incentive Becomes State Law
Municipalities gain new power to drive the creation of jobs and housing
Mayor Thomas M. Menino’s Infrastructure Investment Incentive (H. 5111), known as I-Cubed, was signed by Governor Romney today, providing a powerful new tool to Massachusetts municipalities. First articulated by the Mayor in his December 2005 speech to the Greater Boston Chamber of Commerce, I-Cubed will spur economic development projects that require significant public infrastructure investment.
“I am very excited that the I-cubed legislation was signed into law today,” Mayor Menino said. “This bill forges a strong partnership between the state, local communities, and developers to overcome the enormous obstacle of financing new infrastructure. It represents a public-private partnership in the truest sense, because true partners share both risks and rewards.”
Mayor Menino sponsored the bill, “An Act Relative to the Economic Development of the Commonwealth” with Representative Jeffrey Sanchez, the legislative sponsor of the bill and Vice-Chair of the Committee.
The new law leverages a portion of the growth in state income and sales tax revenue generated by new development to finance public infrastructure that these projects require to proceed. The public infrastructure would include streets, sidewalks, water and sewer, street lighting, parks, and other public amenities.
Under I-Cubed, project developers would be responsible for debt service payments on qualified infrastructure work – paid through a special assessment – until the new buildings are occupied. At that point, the new state tax revenues generated by job-creation and other economic activity projected in a pre-development feasibility study are leveraged to pay the debt service costs for the new infrastructure.
The local community essentially protects the state against any failure to cover its debt service responsibilities. That is, if the developer defaults or the project fails to generate new state tax revenue sufficient to service the debt service cost of the infrastructure, the community pays the shortfall.
While the Mayor led the effort to pass I-Cubed for the benefit of all Massachusetts cities and towns, his supporting data was based on developments proposed within the City of Boston. In his December speech to the Chamber, the Mayor said that overcoming infrastructure cost obstacles at the 100 Acres site, near the Gilette plant in the Fort Point Channel District, would generate an increase of 50 million dollars in annual property taxes, and would create more than 2,000 housing units and more than 12,000 new jobs. Another Boston site where this new tool might be utilized is along the Melnea Cass Boulevard in Lower Roxbury.
“This new law will benefit the state and our communities and strengthen the Commonwealth’s competitiveness,” the Mayor said. “It’s a win for everyone from Boston to the Berkshires.”
Press Contact: Susan Elsbree, BRA, 617.918.4426.Release Date: September 7, 2006
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