Code of Massachusetts Regulations › 801 CMR - EXECUTIVE OFFICE FOR ADMINISTRATION AND FINANCE › Title 801 CMR 51.00 - Generating New State Tax Revenues And Local Tax Revenues By Stimulating Sustainable Economic Development Through Infrastructure Improvements › Section 51.06 - Preliminary Economic Development Proposal

Current through Register 1525, July 5, 2024
(1) Prior to filing an Economic Development
			 Proposal with a Municipality in accordance with St. 2006, c. 293, §§
			 5 through 12, as amended by St. 2008, c. 129, §§ 2 through 17 and St.
			 2012, c. 238, §§ 60 through 63, a Developer shall file a Preliminary
			 Economic Development Proposal with the Secretary, the Municipal Officers, the
			 Agency and the Commissioner and shall submit a check to the Secretary for the
			 payment of the Application Fee. Trade secrets and financial information
			 submitted by the Developer in connection with the submission of a Preliminary
			 Economic Development Proposal and with the submission of an Economic
			 Development Proposal shall be kept confidential by all parties receiving such
			 information to the extent required or permitted by law.
(2) The Preliminary Economic Development
			 Proposal shall include the following:
(a)
			 Legal name, contact information, personnel, description, and relevant
			 experience of the Developer.
(b)
			 References and the contact information of other government officials, if any,
			 with whom the Developer has dealt in connection with similar development
			 projects.
(c) If the Economic
			 Development Proposal is expected to be owned or carried out by more than one
			 Developer, items listed in 801 CMR 51.06(2)(a) and (b) for each Developer and
			 an explanation of their relationship, their respective ownership interests and
			 their respective roles in carrying out the Economic Development
			 Proposal.
(d) Boundaries of the
			 proposed Economic Development District, including:
1. a textual description of the boundaries
			 and a map showing boundaries;
2.
			 identification of the existing parcels of real property located within the
			 proposed district;
3.
			 identification of the current Owner of each parcel, and, to the extent any of
			 the parcels are not currently owned by the Developer, evidence that the
			 Developer has a reasonable expectation of acquiring the parcels not currently
			 owned by the Developer and the expected cost of acquiring these
			 parcels;
4. identification of the
			 proposed Assessment Parcels upon which the different Project Components will be
			 developed; and
5. identification of
			 the proposed Public Infrastructure Improvements.
(e) Description of the Proposed Economic
			 Development Project, including:
1. each
			 building, facility or other improvement to be constructed on each Project
			 Component;
2. the square footage of
			 each building to be used as a commercial facility, and the expected allocation
			 of the square footage among different types of commercial activity, and
			 descriptions of the expected specific commercial uses of this square
			 footage;
3. the number of
			 condominium or apartment residential units to be included in any proposed
			 residential facility, and the number of such units to be restricted as
			 affordable to individuals and families with incomes at or below 80% of
			 area-wide median income levels;
4.
			 Public Infrastructure Improvements;
5. any zoning amendments or relief that will
			 be required to carry out the Proposed Economic Development Project and the
			 status thereof; and
6. any known
			 environmental or other permitting that will be required to carry out the
			 Project and the status thereof.
(f) A detailed itemization of:
1. the projected cost of each Project
			 Component and the expected sources of financing available to fund such costs;
			 and
2. the projected costs of each
			 Public Infrastructure Improvement and the expected sources of financing
			 available to fund such costs, including any funding being requested under St.
			 2006, c. 293, §§ 5 through 12, as amended by St. 2008, c. 129,
			 §§ 2 through 17 and St. 2012, c. 238, §§ 60 through 63. The
			 itemization shall include financial statements or written financing commitments
			 demonstrating that expected sources of financing are available for the project,
			 or include a detailed explanation of the reasons any such financing sources
			 have not yet been secured and the basis for believing they will be secured
			 prior to the Secretary's approval of the Economic Development
			 Proposal.
(g) A detailed
			 timeline for approval and completion of the Economic Development Project,
			 including:
1. the expected date of municipal
			 approval;
2. the expected date of
			 final approval by the Secretary and the Agency;
3. the expected dates of commencement of
			 construction and completion of each Project Component and the fiscal year
			 Project Cost cash flows for each Project Component;
4. the expected dates of commencement of
			 construction and completion of each Public Infrastructure Improvement and the
			 fiscal year Project Cost cash flows for each Public Infrastructure Improvement;
			 and
5. the expected dates of
			 commencement and completion of any other construction-related activity to be
			 undertaken in connection with the Economic Development Project. If the
			 Developer is seeking approval of the Economic Development Project as a Phased
			 Project, the detailed timeline must also clearly identify the different
			 proposed phases of the Economic Development Project, including the Project
			 Components and Public Infrastructure Improvements to be completed in each
			 phase, and the expected dates of commencement and completion of each
			 phase.
(h) Written
			 evidence that the Economic Development Project would not happen or would not
			 achieve the level of development, jobs or other economic activity contemplated
			 by the Preliminary Economic Development Proposal without the Public
			 Infrastructure Improvements and without the financing of all or a portion of
			 the Cost of such Public Infrastructure Improvements under St. 2006, c. 293,
			 §§ 5 through 12, as amended by St. 2008, c. 129, §§ 2
			 through 17 and St. 2012, c. 238, §§ 60 through 63.
(i) For each Project Component, the total
			 number of jobs expected to be supported in each industry expected to be located
			 at the Project Component and the expected average wage for each job in each
			 such industry, the total retail sales activity by dollar volume and the total
			 hotel rooms, projected room rates and projected daily occupancy levels, and the
			 total number of construction jobs expected to be supported at each Project
			 Component and for the Public Infrastructure Improvements, the expected average
			 wage for each construction job and the amount expected to be spent for the
			 purchase of construction materials in the Commonwealth for each Project
			 Component and the Public Infrastructure Improvements, all with reference to
			 recent government or industry sources used as the basis for the projections or
			 to the actual experience, estimate or commitment of expected tenants or Owner
			 of the Project Component.
(j) The
			 Developer's estimate of the appropriate Displacement Factors for each Project
			 Component, together with any data or explanation the Developer can offer to
			 support such estimate.
(k) For each
			 Project Component and based on
			 801 CMR 51.00, the DOR
			 Guidance, the Commitments, and the Developer's estimate of the appropriate
			 Displacement Factors for each Project Component, estimates of total state tax
			 revenues, New Revenues and New State Tax Revenues to be generated from each
			 Project Component of the Economic Development Project. For the purposes of
			 these estimates, the Developer shall state the assumptions it is making with
			 respect to the extent to which any portion of any Project Component for which
			 the Developer does not yet have a Commitment will be leased or purchased by an
			 entity that will or will not be relocating to the Economic Development District
			 from elsewhere in the Commonwealth.
(l) Projected Debt Service schedule for
			 financing of the Public Infrastructure Improvements, both in the aggregate and
			 segregated by allocable Project Component, which is structured based on the
			 following assumptions and parameters:
1. a
			 total principal amount equal to the portion of the Cost of the Public
			 Infrastructure Improvement requested to be funded under St. 2006, c. 293
			 §§ 5 through 12, as amended by St. 2008, c. 129, §§ 2
			 through 17 and St. 2012, c. 238, §§ 60 through 63, and may include
			 estimated costs of issuance of the Bonds up to 3% of said amount;
2. a minimum interest expense of 5%, payable
			 semi-annually beginning in the fiscal year of the Commonwealth following the
			 fiscal year in which the Bonds are issued;
3. issuance date or dates not more than three
			 years prior to the expected completion of the related Public Infrastructure
			 Improvements or portions thereof being financed with proceeds of the
			 Bonds;
4. maximum term of 30 years
			 from date of issuance;
5. principal
			 amortization which:
a. results in annual Debt
			 Service payments allocable to each Project Component after completion of the
			 related Project Component that are not less than the annual Debt Service
			 payable with respect to such Project Component in any subsequent year;
			 and
b. annual Debt Service payments
			 allocable to each Project Component in any year prior to completion of the
			 related Project Component that is at least equal to the total interest due and
			 payable on the Bonds allocable to such Project Component.
(m) Any Commitments for any of the
			 Project Components, together with a written statement as to whether any of the
			 prospective tenants or purchasers making such Commitments are relocating jobs
			 or commercial activity from elsewhere in the Commonwealth and whether any jobs
			 being relocated from elsewhere within the Commonwealth to the Economic
			 Development District would be relocated outside of the Commonwealth if the
			 Economic Development Project were not carried out, including any compelling
			 evidence supporting such an assertion that the Developer is able to provide.
			 The Developer shall also produce a written description of the Developer's
			 marketing efforts and the status of any active negotiations with potential
			 tenants or purchasers.
(n) Written
			 description of the proposed transfer of property interests in the Public
			 Infrastructure Improvements after they have been completed. If the Public
			 Infrastructure Improvements are expected to be conveyed to a governmental
			 entity other than the Municipality, a vote of the legislative body or governing
			 board of the governmental entity with the power to accept property on behalf of
			 the governmental entity authorizing the acceptance of the Public Infrastructure
			 Improvements and of responsibility for maintaining the same in the event that
			 the Economic Development Proposal is approved by the Secretary.
(o) Written statement of interest from the
			 Municipal Officers confirming their preliminary support for the proposed
			 Economic Development Project and their preliminary interest in pursuing the
			 approval of the Economic Development Project by the Secretary, the Agency and
			 the Municipality.
(p) Certification
			 of the Developer confirming that:
1. the
			 proposed Economic Development Project was not approved by the Municipality
			 prior to September 7, 2006; and
2.
			 the Developer has not received or applied for, and will not apply for, any
			 public assistance for the project prohibited under St. 2006, c. 293, §
			 11(b), as amended by St. 2008, c. 128, §§ 13 and 14; and
3. following the effective date of
			 801 CMR 51.00, the Developer
			 has not applied and will not apply for any other public assistance funded by
			 the Commonwealth for infrastructure improvements within the Economic
			 Development District until any Bonds issued for Public Infrastructure
			 Improvements therein are no longer outstanding, unless the Secretary approves
			 of the Developer's applying for such other state infrastructure
			 assistance.
(q) A
			 description of each of the commercial establishments and residential facilities
			 located within the proposed Economic Development District during the fiscal
			 year prior to the application for funding under St. 2006, c. 293, §§
			 5 through 12, as amended by St. 2008, c. 129, §§ 2 through 17 and St.
			 2012, c. 238, §§ 60 through 63, and, if the Developer owns all or a
			 portion of the property within the district, in the fiscal year prior to the
			 Developer's acquisition of such property, whether any of such establishments or
			 facilities are expected to remain within the district following the proposed
			 Economic Development Project and the plans for relocating any of such
			 establishments or the place of relocation of any of such establishments that
			 have already been relocated, and the estimated amount of any state tax revenue
			 generated from each of such commercial establishments in the prior fiscal year
			 and in the fiscal year prior to the Developer's acquisition of such property,
			 if applicable, together with the basis for such estimates.
(r) Written evidence that the Economic
			 Development Project shall conform to the general plan for the Municipality as a
			 whole and any master plan for all or any portion of the Economic Development
			 District, and an opinion of counsel to the Developer confirming that the
			 Economic Development Project shall conform with all applicable zoning,
			 planning, land use, environmental and other laws and regulations of the
			 Commonwealth and of the Municipality.
(s) A description of the methodology for the
			 allocation of Debt Service to each Assessment Parcel and for the calculation of
			 any infrastructure assessments to be levied by the Municipality upon each
			 Assessment Parcel in the Economic Development Project, or the manner of
			 determining such methodology. The methodology may include allocation by length
			 of frontage, or type of Project Component, including classification of
			 Assessment Parcels among residential, commercial, industrial and open space
			 uses, or by square footage of an Assessment Parcel or an Economic Development
			 Project, or according to the value of the Assessment Parcel as determined by
			 the assessor or assessors, or by such other method as the assessor or assessors
			 of the Municipality determine will fairly allocate the Costs of the Public
			 Infrastructure Improvements financed by the Bonds to the real estate in the
			 Economic Development District, which may also include allocating Debt Service
			 and assessing in proportion to the New State Tax Revenue projected to be
			 generated from the Assessment Parcel. Prior to the Secretary's issuance of a
			 Preliminary Letter of Approval, the Secretary must also receive written
			 evidence of the Municipal Officers' and the Municipality's assessor's or
			 assessors' approval of the proposed methodology for the allocation of Debt
			 Service to each Assessment Parcel and, if necessary, of the aforesaid
			 determination of the assessor or assessors of the Municipality. In the event
			 that the methodology proposed requires the aforesaid determination of the
			 assessor or assessors of the Municipality, the Secretary shall not issue a
			 Preliminary Approval Letter until receiving written evidence of such
			 determination by the assessor or assessors.
(t) A statement as to whether the Developer
			 will agree to have Assessment Parcels assessed to reimburse the Municipality
			 for all or any portion of any Local Development Infrastructure Assistance
			 payments the Municipality is required to make to the Commonwealth with respect
			 to any Shortfall between Debt Service and New State Tax Revenues after the
			 related Project Component has become an Occupied Project Component, or a
			 description of any agreements made between the Developer and Municipality for
			 the same purpose.
(u) A written
			 description of the extent to which the Economic Development Proposal is
			 consistent with the Sustainable Development Principles.
(v) A statement as to whether the proposed
			 Economic Development Project is located in an Economically Distressed
			 Municipality or a Growth District, and, if it is, any supporting information or
			 evidence thereof.
(w) A written
			 description of the Developer's proposed competitive process for selecting a
			 contractor or contractors for the construction of the Public Infrastructure
			 Improvements to ensure timely and quality construction and cost
			 effectiveness.
(x) A written
			 statement, together with supporting information or evidence, as to whether:
1. the Developer is committed to make each
			 Project Component at least LEED certifiable;
2. any of the Public Infrastructure
			 Improvements have been previously contemplated and designed by the Commonwealth
			 or any of its agencies; or
3. any
			 of the Public Infrastructure Improvements are reasonably likely to make other
			 sites available for economic development projects.
(y) A written description of the Developer's
			 plan to secure the obligations of its selected contractor or contractors to
			 complete each of the Project Components and the Public Infrastructure
			 Improvements with payment, performance and lien bonds which, in the case of the
			 Public Infrastructure Improvements being funded in whole or in part from the
			 proceeds of the Bonds, provide for the Developer and the Agency to be
			 co-obligees under such bonds, and to secure its own obligation to complete the
			 portion of the Public Infrastructure Improvements not funded by Bonds under St.
			 2006, c. 293, §§ 5 through 12, as amended by St. 2008, c. 129,
			 §§ 2 through 17 and St. 2012, c. 238, §§ 60 through 63, or
			 to provide other security satisfactory to the Secretary.
(z) If all or any portion of the proposed
			 Economic Development Project is located in a Convention Center District, a
			 written statement of preliminary support for the proposed Economic Development
			 Project from the Executive Director of the Massachusetts Convention Center
			 Authority and confirmation of his or her preliminary support for transferring
			 the New State Tax Revenues deposited in the Convention Center Fund to the
			 General Fund in accordance with St. 1997, c. 152, § 10(c)(vi).
(aa) Any other reasonable information or
			 documentation that the Secretary, the Municipal Officers, the Agency or the
			 Commissioner requests.