Urban Center Housing Tax Increment Financing
Why do Downtown TOD projects need TIF support?
The City's 2015 Transit Oriented Development Action Plan identified mixed-use and multifamily development as a viable path to promoting downtown redevelopment. Fundamentally, the plan calls for a “roofs before retail” strategy, to bring new people and create built-in demand for retail amenities while fostering a vibrant, walkable downtown. In response to the plan, in October 2015 Town Meeting approved Central Business (CB) District zoning changes that allow feasible downtown TOD projects. The zoning changes also included expanding the CB District, to increase the number of land parcels that could support TOD projects.
The plan also studied many of the obstacles to redeveloping a vibrant downtown center. The Action Plan determined that downtown Framingham is an unproven market, reflecting uncertainty that can deter potential investors. This reflects the fact that the area has not seen substantial investment in many years. For these reasons, the plan found that “first mover” projects may need financial assistance to overcome obstacles to investment.
Today, developers with national reach are proposing substantial projects within easy walking distance of the commuter rail station. The City is negotiating UCH-TIF agreements with both developers, to help each overcome obstacles and make transformative investments in our downtown. These projects are proposed at 75 Concord Street (reflecting a 6-parcel aggregation) and 266 Waverly Street.
The UCH-TIF agreements reflect negotiated tax exemptions, to be granted over a number of years. The exemptions are granted only on the property tax increment resulting from the new investment, while the City continues to collect property taxes based on the property’s pre-investment value. These exemptions reduce project cost and risk, especially during the critical early years of a new project – and encourage investment.
What is the approval process for the UCH-TIF program?
For UCH-TIF agreements to go forward, Town Meeting must provide votes:
- Approving the new UCH-TIF Plan and expanded Zone. The new Plan will accompany the expanded Zone, allowing the City to take advantage of program rule changes signed into law last year by Governor Baker.
- Authorizing the Board of Selectmen to enter into UCH-TIF agreements with proponents of qualifying projects. Town Meeting will only be asked to consider authorizing specific projects.