QUINCY, MASS. — The Quincy City Council has approved the master agreement for the redevelopment of the city's Quincy Center area. The City has partnered with White Plains, N.Y.-based Street-Works Development LLC, a company with a history of urban redevelopment projects, to complete the $1.28 billion facelift to the downtown area, which has languished in recent years as retail and commercial users moved out to the suburbs.
At full build-out, the New Quincy Center will contain 1 million square feet of new office space, 580,000 square feet of retail and restaurant space, a cinema and entertainment complex, two hotels and more than 700 units of housing. Initial plans include a community college, a wellness center, and programming one of the hotels to business travelers and the other to visitors. In an effort to make the area more pedestrian friendly and encourage outdoor retail uses, sidewalks will be widened to approximately 20 feet. Several small parking garages will be constructed throughout the project. A 4-acre public green space connecting to a new historic and cultural center will also be constructed.
Infrastructure improvements, which will total $277 million alone, are set to begin in mid-2012 and will be complete by 2013. After that, the New Quincy Center will be built out in four phases over a 7- to 10-year period. The first three phases will have several mixed-use components to them, and the fourth phase will consist entirely of residential space.
The City and Street-Works have agreed to a purchase model for the project. Unlike a lot public-private partnerships, which involve the city funding infrastructure improvements first before private development begins, the New Quincy Center will be initially be funded entirely by Street-Works. The developer will fund the infrastructure improvements and construction of the parking garages out of pocket and will be repaid by the city only after the buildings it constructs are occupied and producing enough revenue to cover the City's debt cost.
“We will build the public improvements, we will pay for them, and we will cap the exposure of the city,” says Ken Narva, co-founder and managing partner of Street-Works. “If it costs more money than we budgeted, that will be our obligation…We also said we would build the private improvements at the same time. When they're at least 75 percent occupied — and cash is flowing and taxes are flowing from those occupied spaces — then [the City is] obligated to buy, no questions asked.”
“The revenue generated to pay for the bonds is completely project-driven. The general public doesn't pay for it, the existing landowners and the City don't pay for it. It's just the downtown district neighborhood,” Narva adds. He mentions that credit rating agencies love this idea because the bonds the city uses to pay for the project are being underwritten by new revenue. Cities like it because they are not financially exposed for the infrastructure work before development begins. And Street-Works likes it because they can control how the project is built and the timing of it.
Street-Works recently completed a $220 million project to redevelop several blocks of West Hartford, Conn. It has completed similar projects in New Rochelle, N.Y.; Bethesda, Md.; and San Jose, Calif. The company has another project currently in the planning stages in Norwalk, Conn.
— Coleman Wood