Covenant Brings Total Developer Payments and Contributions to Estimated $112M
Benefits include funding for GLX, job programs, infrastructure projects, and more;
Also includes binding agreement to negotiate additional community benefits with new Union Square Neighborhood Council;
Covenant between US2 and City goes into effect if Board approves Union Square zoning
SOMERVILLE – Yes, it’s finally come this far. The City of Somerville now has an agreement in hand that, once in effect, will translate more than 8 years of community discussion on the future of Union Square into action—and pave the way for developer contributions and payments to the community totaling an estimated $112 million and expands the city’s real estate tax revenue by nearly one-half billion ($445 million) over the next 30 years. Contributions include funds for the Green Line extension, sewer and street upgrades, new open space, and more. In response to another key issue raised by community advocates, the covenant requires the developer, Union Square Station Associates (US2) to negotiate a community benefits agreement with community members via the Union Square Neighborhood Council (or an interim council), which is currently forming.
“To be clear, the City must still advance $94 million in infrastructure improvements for the Union Square development to proceed and $64 million of that amount is needed for long overdue area water and sewer upgrades that must be carried out whether Union is developed or not. However, we are confident that the estimated $557 million in combined contributions, payments, and projected tax revenues from this project will more than offset our investment. Our city is facing pressing infrastructure needs and has also set many goals from lowering residential taxes to enhancing our schools, streets, parks, and more. Smart, community-driven development is how we will get there, and I want to thank US2 for working collaboratively with us on this monumental step forward in that process,” said Mayor Joseph A. Curtatone.
Residents and Advocates Shaped Plan
Planning for Union Square development grew out of the multi-year SomerVision process that began in 2009 and created the 20-year comprehensive SomerVision plan for the City. SomerVision lays out shared community values and priorities including job and tax revenue creation while preserving affordability, expanding green space, increasing sustainability, and diversifying transportation options, among other goals. In 2014, US2 was selected as the master developer for Union Square to help advance these goals. In short, the community is partnering with US2 to change the model of solely profit-driven development to one of growth shaped by community preferences.
To achieve this, community members took part in a 17-month Union Square Neighborhood Planning process that produced a 393-page plan detailing local preferences on everything from aggressive affordable housing requirements to a creative vision for new open space. A 14-month process then identified community priorities for additional benefits such as anti-displacement measures and job training. To put these intentions into action, two measures were taken: resident priorities were built into new zoning for the Union Square neighborhood after intensive community input, and the covenant was negotiated to bind the developer to critically important community contributions.
Benefits Range from Affordable Housing to Job Training Funds
Now, in exchange for Board of Aldermen approval of the draft Union Square zoning that will allow construction to move forward, US2 has signed the covenant. If zoning is approved by the May 31 deadline, the covenant goes into effect. US2 will then be bound to make a number of contributions and adhere to development guidelines including providing funds to help offset the City’s contribution to extend the MBTA Green Line. Combined, the two measures, plus other required payments and fees, will yield an estimated $112 million in contributions and fees by US2. Approximately $72 million will come via the zoning, $19.2 million via the covenant, and $21.2 million via other required payments and fees.
The estimated value of these benefits include $55.6 million in funding and in-kind costs toward affordable housing creation and $20.5 million combined in building permit fees and future phase contributions, which can be applied where most needed. Another $13 million will go to environmental sustainability measures, $5.5 million will support the Green Line Extension, and close to $7.7 million is dedicated to infrastructure contributions for water and sewer upgrades and costs, streetscape improvements, and the redesign of Union Square Plaza.
A neighborhood council composed of community members will negotiate additional community benefits and possible in-kind contributions valued at $3.7 million in a community benefits agreement. The neighborhood council will also advise the city’s community benefits committee (to be established) on funding priorities for the neighborhood. Another $5 million will go toward open space creation, and approximately $1.7 million will go toward jobs programs to help prepare residents for the new employment opportunities created in the neighborhood.
Finally, the proposed zoning requires that 5 percent of designated commercial space be dedicated to arts and maker spaces. Beyond the $112 million, the developer will also pay approximately $9.3 million to acquire land for development from the Somerville Redevelopment Authority, effectively reimbursing the City for its land assembly costs.
Covenant Increases Open Space Requirement, Sets Local Hiring Policies
Directly due to community advocacy, the covenant includes two additional provisions. It requires the developer to add 66% more open space than anticipated in the 2016 Union Square zoning draft and it requires 70% of that open space to be in the form of high quality parks, playgrounds, and plazas. The covenant also sets forth that commercial tenants give hiring preference first to qualified residents and then to qualified veterans before considering other applicants.
“The power of idealism in our community cannot be overstated. Across the country, communities are struggling with gentrification, transit needs, environmental challenges, and crumbling infrastructure. So here in Somerville, rather than simply watching as developers pick off random lots to build luxury condos, we set a higher bar. We demanded a master plan. We envisioned a vibrant new section of the neighborhood with a range of businesses and civic space. Then we researched, discussed, argued, dreamed, and carefully drew up plans that will work harder for us. It’s a plan that won’t just chase tax revenues. Rather, it builds in aid to vulnerable residents, protects our environment, adds open space, and will help retain the artists, makers, small businesses and long-time residents that make Union Square great. We can’t solve every ill with one plan, but thanks to our residents—and our unwavering community advocates—we’re certainly trying to make a dent,” said Mayor Curtatone.
Contributions Put City on Track to Recoup GLX and Infrastructure Costs
Of particular importance is US2’s Green Line contribution. In late 2016, the City was required by the State to contribute $50 million to the extension of this MBTA transit line in order for the project to proceed—and to avoid the loss of $1 billion in federal funds for the State project. To help cover this unprecedented and unplanned expense, the City seeks to recoup at least $25 million via developer contributions from projects built near the coming new T-stops. The $5.5 million US2 contribution equals just over one-fifth of that $25 million. This reflects that the 2.3 million sq ft of development that US2 is estimated to produce equals roughly one-fifth of the total square footage of development expected around all six new Green Line T-stops.
For information on how to participate in the formation of the Union Square Neighborhood Council that will negotiate and allocate further community benefits, please contact Sue Thomas email@example.com. For updates on next steps, sign up for the City newsletter at http://www.somervillema.gov/newsletter.