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HomeMy WebLinkAbout2007 Patriot Way Economic Opportunity Area DesignationDraft MASSACHUSETTS ECONOMIC DEVELOPMENT INCENTIVE PROGRAM APPLICATION FOR DESIGNATION AS THE PATRIOT WAY ECONOMIC OPPORTUNITY AREA SUBMITTED BY THE TOWN OF LEXINGTON October 17, 2007 The Massachusetts Economic Development Incentive Program APPLICATION FOR DESIGNATION OF ECONOMIC OPPORTUNITY AREA PART A: Applicant Information 1. Please check one: X This is an application for designation of a new EOA within a previously approved ETA. This is a request to amend an EOA previously approved by the EACC. 2. Community submitting this application: Town of Lexington Name of proposed EOA: Patriot Way Economic Opportunity Area (EOA) PART B: MANDATORY REQUIREMENTS FOR THE PROPOSED EOA 1. Location of Proposed EOA: Provide a detailed map of each proposed EOA, indicating the existing streets, highways, waterways, natural boundaries, and other physical features, along with a legally binding written description of the EOA boundaries (with parcel numbers if appropriate). If the written description is longer than one paragraph, please submit on 3 ' /z" computer disk. Refer toAttachmentl for a detailed map and legal description of the proposed Patriot Way EOA. 2. Description of EOA: Describe why each proposed EOA was chosen for designation. Include a brief, descriptive narrative of each area, which helps to explain the particular situation, issues, or reasons why EOA designation is requested. The Patriot Way EOA was chosen for designation based upon the priority areas identified in the Lexington Regional Technology Center ETA grant application. Lexington Technology Park (LIT), which is part of the Hayden Avenue commercial area, is a 95.8 -acre site, which was previously the site of the Raytheon Corporate Headquarters. In 2003 Raytheon vacated the site after Patriot Properties purchased LIT in December 2002. LIT is comprised of three existing buildings totaling 354,950 square feet and the planned development of two additional buildings totaling 2 76, 650 square feet. In terms of the existing buildings on the site, Building 300 has been totally vacant since November 2003 and the LIT Conference Center, which was part of this building, was demolished in 2005 -2006, reducing the total square footage of the building by 70, 000 square feet to 190, 000 square feet. Buildings 125 and 500 have been partially occupied since Raytheon left, but the planned development of Buildings 200 and 400 has not occurred. In 2004 Lexington Town Meeting rezoned the former Raytheon site to permit the redevelopment of the site, which included the reuse of the vacant buildings and the development of two buildings totaling 276,650 square feet of new space. The rezoning also permitted manufacturing in the biotechnology and pharmaceutical fields. There are currently sixteen (16) biotechnology firms located within the established ETA. The Town of Lexington has focused upon expanding this industry cluster by taking advantage of its location (adjacent to Route 128 and Route 2 and proximity to major universities and biotechlpharma cluster in Cambridge and Boston). As a result of the Town Meeting action, companies such as Hypn ion, NitroMed, CBSET and Shire Human Genetic Therapies, Inc. (Shire) have been attracted to LIT. Shire approached the Town of Lexington earlier this year with a proposal to occupy the 125 and 300 buildings and to build and occupy the 200 and 400 buildings. Shire wanted to establish a partnership with the Town of Lexington and the Commonwealth of Massachusetts and utilize the tax benefits under the EDIP program. This $ 350 million project will enable Shire to retain 500 employees in the Commonwealth ofMassachusetts and to create more than 600 new jobs. Shire projects that 385 new jobs, with an average salary of $ 100,000 will be created by 2009. The state and local economic impacts generated by this project are extensive with up to $ 40 million ofstate personal income tax through 2014 and nearly $ 50 million in local property taxes from the Shire TIF properties. Additionally, $ 890,000 in building permit fees would be generated as a result of this project. The establishment of the Patriot Way EOA will enable the Town of Lexington and Shire to work in partnership with the Commonwealth ofMassachusetts to revitalize the LIT into a productive economic generator and to serve as the primary example of how biotech and pharmaceutical firms can thrive in the Commonwealth ofMassachusetts. Shire estimates that the total economic output at the state level generated during the first five years of this project will exceed $ 2 billion. The localized direct and indirect spending impacts, the job creation and the property tax generation make this an ideal project for the EDIP program. 3. Basis for EOA Designation: Check the applicable category or categories (see definitions in attachment at back of application) for each proposed EOA: The area proposed for designation as an EOA is a "blighted open area ". X The area proposed for designation as an EOA is a "decadent area ". The area proposed for designation as an EOA is a "substandard area ". The area proposed for designation as an EOA has experienced a plant closing or permanent layoffs resulting in a cumulative job loss of 2,000 or more full -time employees within the four years prior to the date of filing this application. 4. Effective Time Period for EOA Designation: How long do you propose to maintain the EOA designation? The EOA designation may remain in effect for a minimum of five (5) years and a maximum of twenty (20) years. The EOA designation will remain in effect for twenty years (20) years. 5. Local Criteria for Designation of EOAs: Describe how each proposed EOA meets your criteria for designation of EOAs, as specified in your application for designation of the ETA. As documented in the Town of Lexington's Regional Technology Center ETA application, the principal criteria outlined for the designation ofEOA's was identified as follows: • Meets the economic goals of the ETA; • EOA should be appropriately zoned for economic development; • The Board of Selectmen must approve the EOA; • Promote effective reuse offunctionally obsolete commercial buildings; • Encourage the expansion of existing, or attraction of high technology firms, reinforcing the concentration of biotech /pharma companies in area; • Efforts should reflect and take advantage of the profound interconnectedness of economic activities and initiatives, within Lexington, and those in the surrounding regions; • Encourage development of vacant or underutilized commercially zoned area; • Facilitate reduction of commercial vacancies; and • Encourage the use of public transportation and other transportation demand measures. The relationship between transportation and land use must be creatively addressed, since no other single concern is so limiting on acceptability of land use change, or as threatening to the residential quality of life. The proposed project for the Patriot Way EOA addresses each of the local criteria for designation ofEOA's as outlined in the ETA application. The project meets the economic goals of the ETA, as outlined in the next section. Through the action by Lexington Town Meeting in 2004, the EOA is appropriately zoned for economic development. The approval of the Board of Selectmen is attached with this EOA application and the proposed investment by Shire brings a totally vacant building back in the marketplace and creates two additional buildings for manufacturing, warehousing, laboratory space and office space. The focus upon the biotech /pharma industry is fulfilled by the active involvement of Shire and builds upon the biotech pharma industry cluster in Lexington and the Greater Boston region. The extensive number of transportation initiatives being proposed by Patriot Properties and Shire will address the need to lessen the dependence upon the automobile. The Town will apply for state funds to improve the transportation and pedestrian infrastructure in the Patriot Way EOA to support the private investment by Shire. The Town will apply for $ 600, 000 under the Massachusetts Opportunity Relocation and Expansion (MORE) Jobs Capital Program to complete improvements to the intersection at Spring, Marrett and Bridge Streets. The Town shall apply for $ 1.4 million in Public Works Economic Development Grant (PWED) funds for sidewalk improvements to the Spring Street and Hayden Avenue. In order to improve the Marrett/Waltham intersection and the Hayden Avenue corridor, the Town will apply for $ 1 million in Community DevelopmentAction Grant (CDAG) funds. 6. Economic Development Goals: Describe the economic development goals for each proposed EOA during the first five years of EOA designation. The specific economic development goals, as outlined in the Lexington Regional Technology Center ETA, were as follows • Diversify the local economic base. Provide fiscal support necessary for the high level ofpublic services residents of Lexington seek; • Help businesses thrive, which in turn, helps the municipal economy, with or without physical expansion of land or building area devoted to business. Strive for better not bigger, make a better community for residents, workers and enterprises; • Provide nearby jobs easily accessible to Lexington residents, encourage economic development in ways that moderate auto usage and promote accessibility to jobs and services for Lexington residents. • Increase the development potential in the ETA, use under - utilized buildings or sites; and • Attract high -tech companies with good jobs. The proposal by Shire addresses each of these economic development goals in a significant way and ensures that the Patriot Way EOA will be successful. A summary of the economic benefits being generated by this project is as follows: • The investment of $ 350 million funds by Shire; • The retention of 550 jobs in the Commonwealth and the creation ofmore than 600 jobs; • Total economic output at the state level generated during the first 5 years of the project is estimated to exceed $ 2 billion; • Generate up to $ 40 million of state personal income tax through 2014; • Ten year $ 80, 000 bi- annual payment by Shire to support library and educational -based initiatives; • Anticipated property taxes in excess of $35 million from Shire TIF properties; • $ 890,000 in buildingpermitfees; • $ 2.6 million in infrastructure improvements through the public /private partnership; and • The attraction of high technology and biotech firms to this area through a partnership relationship with the Massachusetts Office of Business Development (MOBD). 7. Local Services: Describe the manner and extent to which the municipality intends to provide for an increase in the efficiency of the delivery of local services within the proposed EOA(s) (i.e. streamlining permit application and approval procedures, increasing the level of services to meet new demand, changing management structure for service delivery). The Town of Lexington has been responsive to the needs of businesses in the past and will attempt to improve its service delivery system in the future. In terms of the permit and approval processes, representatives from the Conservation Commission, Zoning Board of Appeals, Board ofHealth, Fire Department, Town Clerk and Building Department, as well as other town staff, serve on the Development Review Team (DRT) The purpose of the DRT is to provide early input and guidance to businesses seeking approvals from the town. This entity also provides an opportunity to hear what concerns the other boards and departments have at the outset of the application process. The Town has also made a commitment to establish an Economic Development Committee, which is designed to oversee the EDIP process and to promote a stronger partnership between the Town and its business community. The continued support by Lexington Town Meeting and the Lexington Board of Selectmen reflects the community's support of business initiatives. 8. Compliance with Community Reinvestment Act: Include a copy of a municipal plan or policy, if any exists, which links the municipality's choice of banking institutions to the bank's compliance with the requirements of the Community Reinvestment Act. The Town of Lexington does not currently have a municipal plan which links the municipality's choice of banking institutions with the bank's compliance with the requirements of the Community ReinvestmentAct. However, the Town of Lexington has established working relationships with the major regional and local financial institutions in the area. (Bank ofAmerica, Century Bank, Citizens Bank, AlEvIDT, TD Banknorth, Unibank, and Wachovia Securities) These institutions have generally complied with the requirements of the Community ReinvestmentAct and have partnered with the Town in addressing its financial and affordable housing needs. The Town of Lexington would consider adopting such a policy to reflect its intent to partner with financial institutions that meet the spirit and intent of the Community ReinvestmentAct. 9. Project Approval: (a) Identify the municipal official or group /board, which shall be authorized to review project proposals for and on behalf of the municipality. The Town Manager, with the assistance of the Economic Development Officer, Planning Director, Assistant Town Manager for Finance and Town Counsel, will review project proposals for and on behalf of the municipality. Other town representatives, such as those from the Building Department, Fire Department, Department of Public Works and Conservation Commission will participate as needed. (b) Indicate the standards and procedures for review of project proposals, including the application procedures, the timeframe for review and determination, and the criteria and process for approval of project proposals. If you intend to use supplemental application material (i.e. municipal cover letter with instructions, job commitment signoff sheet, supplemental questions to be required by the municipality, etc.), it must be mentioned here and must be approved by the Economic Assistance Coordinating Council (EACC). Please attach (if appropriate). The Town of Lexington has established the following standards and procedures for the review of project proposals: Firms interested in applying for Certified Project Status will meet initially with the Town Manager and Economic Development Officer to discuss their project and to determine whether their project meets the economic development goals and objectives established by the Town and whether an EOA and/or TIF Zone needs to be established. A copy of the Town's ETA application will be provided to the interested firm. Based upon the results of the initial meeting, the firm will then submit a letter of interest to the Town Manager summarizing the project and indicating how the project meets the criteria and economic development goals established by the ETA application. The Town Manager will then schedule a follow -up meeting with the interested firm to begin negotiations regarding the number ofjobs to be retained or created, additional benefits to the community resulting from the proposed project and the tax relief being requested by the firm. The Town Manager will consult with other staff, such as the Economic Development Officer, Planning Director and Assistant Town Manager for Finance, to determine the overall impact of the proposed TIF Agreement. Once there is general consensus between the Town Manager and the interested firm, the project proponent would then submit the official Certified Project application to the Town Manager. The Town Manager will schedule an initial meeting for the project with the Board of Selectmen to discuss the proposal and to request a warrant article on the Annual Town Meeting agenda. If approved by the Board of Selectmen, the project proponent will make his presentation before Town Meeting with the proposed TIFAgreement. Upon approval of the TIFAgreement by Town Meeting and of the Certified Project application by the Selectmen, the Tow, together with the firm, will submit the Certified Project application, along with any required EOA or TIFZone applications, to the Economic Assistance Coordinating Council (EACC) for state approval. Upon final approval by the EACC, the private firm will work with the Town and will submit regular reports to the Town and an Annual Report to the EACC. Projects will be approved based upon their ability to meet the project criteria and economic development goals outlined in the approved ETA application, as well as their consistency with the Comprehensive Master Plan. 10. Intent of Businesses to Locate in EOA: Identify the names and nature of businesses, if any, that have indicated an intention to locate or expand in the proposed EOA(s). If possible, include letters of intent from the businesses, outlining the number of jobs that would likely be created and providing a timetable for development of the projects. Shire Human Genetic Therapies, Inc. (Shire) has submitted a Certified Project application to occupy Buildings 125, 300 and 500 and to develop and occupy Buildings 200 and 400 as part of the Patriot Way EOA. The company will retain 550 jobs in the Commonwealth ofMassachusetts and create more than 600 jobs. The total private investment ofmore than $ 350 million for building and equipment costs represents a significant economic boost to the area. The build -out timetable of 50, 000 square feet in Building 125 by the third quarter of 2007, 132, 000 square feet in Building 300 by the third quarter of2008, 170,000 square feet in Building 200 by the first quarter of 2011 and 200,000 square feet in Building 400 by the third quarter of 2011 provides for a total of 552, 000 square feet by the end of 2011. Seethe attached Certified Project application for more details on the proposed Shire project. PART C: SPECIAL REQUIREMENTS FOR LARGE MUNICIPALITIES This section must be completed by any municipality or member of a regional ETA with a population that exceeds fifty thousand (50,000) people. The population threshold should be calculated based on the most recent statistics available from the U. S. Bureau of the Census. NOT APPLICABLE PART D: COMMITMENT TO PROVIDE LOCAL PROPERTY TAX RELIEF The municipality completing this application must provide a binding written offer to provide either tax increment financing or a special tax assessment to each certified project located within the proposed EOA(s). Please attach a copy of the municipality's binding written offer. In cities, this shall be in the form of a City Council Order or Resolution, along with a Certified Vote by the City Clerk. In towns with Town Meeting form of government, this shall be in the form of a Town Meeting Motion, along with a Certified Vote by the Town Clerk. In towns with Town Council form of government, this shall be in the form of a Town Council Order or Resolution, along with a Certified Vote by the Town Clerk. Please refer toAttachmentll for the Resolution approved by the Selectmen at their October 17, 2007 meeting and the TIFAgreemems approved at the Lexington Annual Town Meeting on October 17, 2007. Attachment I Patriot Way EOA Maps Patriot Way EOA Legal Description Attachment II Board of Selectmen Resolution TIF Agreement