Committee report - Finance - 3-31-11 — File 191061

March 31, 2011 Finance Committee Page 1 of 2 Printed 4/13/2011 REPORT OF THE FINANCE COMMITTEE Attendee Name Title Status Arrived Maryann M. Heuston Chair Present William A. White Jr. Vice Chair Present John M Connolly Alderman At Large Present Rebekah Gewirtz Ward Six Alderman Present Thomas F. Taylor Ward Three Alderman Present William M. Roche Ward One Alderman Present Walter F. Pero Ward Four Alderman Present Sean T. O’Donovan Ward Five Alderman Present Robert C. Trane Ward Seven Alderman Absent Bruce M. Desmond Alderman At Large Present Dennis M. Sullivan Alderman At Large Absent Joseph Curtatone Mayor Present Monica Lamboy Exec. Director OSPCD Present Steve Azar OSPCD Present Janice Delory Chief of Staff Present Ed Bean Chief Financial Officer Present Anne Thomas Counsel, OSPCD Present Thomas Pasquarello Chief of Police Present Marc Levye Chief Assessor Present Carl Sciortino State Representative Present • Public Hearing: related to the Mayor’s request to appropriate and authorize the city to borrow $25,750,000 in a bond for the cost of implementing the Assembly Row DIF District and Development Program Members of the public spoke on the proposal and expressed opinions on the city’s current financial health, the unpredictability of certain variables pertaining to the project, the need for more commercial development, the city taking over the infrastructure, retaining the character of the city, jobs for local residents at livable wages and the impact of the Orange Line station. The record will remain open until the close of business on Wednesday, April 13, 2011 to receive additional written comments. 190977 - Conveying the Assembly Row DIF Consultant Analysis on municipal service impacts.:

Committee of the Whole March 31, 2011 Finance Committee Page 2 of 2 Printed 4/13/2011 Mr. Pate, of WTHA, discussed his consulting work and spoke about marginal expenses, average costs, how the city’s expenses would increase, how these costs would be absorbed and how the city would benefit financially from the proposed development. A request was made by Alderman Gewirtz for a more thorough analysis of the costs. RESULT: KEPT IN COMMITTEE 190978 - Conveying the Assembly Row DIF Tri-Party Public Funding Agreement.: RESULT: KEPT IN COMMITTEE 190988 - Requesting an appropriation of $25,750,000 and authorization to borrow $25,750,000 in a bond for the cost of implementing the Assembly Row DIF District and Development Program.: Mayor Curtatone spoke about the master plan for Assembly Square and discussed the approval of the funding for its Orange Line station. The Mayor also spoke about the city’s bond rating has improving to A+ and how that would affect the debt service and payment schedule. Mr. Levye discussed the value and expected revenues of the subject properties and Alderman White requested that the valuation models and the basis used in the calculations be provided along with an analysis of the jobs to be created. The committee raised concerns about payments to the developer, requirements placed on the bond, protecting the city with respect to the infrastructure in perpetuity, aspects of the tri-party agreement, jobs for Somerville residents, having a signed MOU and a guarantee from the developer. Ms. Thomas stated that the property owners and Federal Realty Investment Trust (FRIT) are guarantying the obligation, although it is not secured by a letter of credit. Mr. Briggs, from FRIT, assured the committee that FRIT’s $4 billion of equity is enough to cover the guarantee. Mr. Briggs added that there is no certainty that IKEA is going to move forward at Assembly Square. RESULT: KEPT IN COMMITTEE