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June 10, 2013

‘Gateway Cities’ Designation Could Be Key To Recovery

Perhaps feeling as if they had always been taking a back seat to the Boston area, officials in communities dubbed Gateway Cities feel they're making a stronger impact by leveraging common issues and concerns, to effect policy changes that can boost business and housing development within their locales.

“The idea is that they're very unique places, but the state's economic policy hasn't always recognized they're different from Boston,” said Ben Forman, executive director of the Gateway Cities Institute at MassINC, a Boston-based think tank. He said there's a more balanced investment in Gateway Cities as opposed to just focusing on Boston. What started in 2007 as recognition of 11 former mill cities and an agenda for their growth eventually expanded to become a government initiative with three points that defined a Gateway City:

• A population greater than 35,000 and less than 250,000;

• A median household income below the state's average; and

• A proportion of residents with a bachelor's degree or higher that falls below the state average.

Of the state's 26 Gateway Cities, three — Worcester, Fitchburg and Leominster — are in Central Massachusetts. Officials view the designation as integral to their growth and economic recovery.

Timothy McGourthy, Worcester's director of economic development, said the city, one of the original 11, along with Fitchburg, has seen benefits from the designation, though he said cities are still trying to understand what it can do for them.

He said Worcester has yet to receive allocated funding. But, he said, economic development initiatives like CitySquare have received increased attention from the Patrick administration — especially through funding. He said the state has worked in partnership with the city more than he believes it would have if the city weren't a Gateway area.

“The prominence of the Gateway Cities has really been the most important kind of outcome for us,” McGourthy said.

He also thinks that as funding for market-rate housing evolves and expands, the designation will be more valuable. Right now, tax credits for housing available to the cities are capped at $1 million per project (with just $5 million available each year) and limited to developments of 50 units or fewer. Worcester would like to have larger developments.

How It Helped Fitchburg

But for Fitchburg, that incentive works. Ryan McNutt, Fitchburg's housing director, said the city recently sought tax relief for a 62-unit downtown housing development that would redevelop upper floors of Main Street buildings on 3 acres targeted at young families and professionals. If approved, the funding will help the city increase its market-rate housing stock.

“This project would absolutely not be possible without this state incentive program,” McNutt said. “These projects would have to be affordable housing projects.”

Fitchburg was also able to use $350,000 from the state's Gateway City Parks program to put a 5.5-acre park on the site of a mill building along the Nashua River that was destroyed by fire.

Larry Casassa, the city's deputy director of community development, said the park will serve as an amenity for residents of Riverside Commons, a nearly completed mixed-used development that will have 187 apartments and 16,000 square feet of commercial space. When the park opened in 2011, city officials hoped it would help increase property values and spur other economic growth. Earlier this year, Mayor Lisa Wong said the construction of the park helped advance the housing project because the developer planned to apply for low-income and other tax credits that could take years to receive. And because the city preferred to have market-rate housing there, they made the area more desirable by adding the park.

Room For More?

With benefits like those seen in Worcester and Fitchburg, it's not surprising that communities outside the group of 26 want in. Perhaps the person most outspoken about wanting the designation is Gardner's mayor, Mark Hawke. He believes his city deserves “a seat at the table” because it easily meets the state's requirements for median household income and education level. So what holds it back? The fact that its size of 21,000 has been the same for 60 years, according to Hawke.

“My biggest problem is that if you look at the criteria, Gardner blows away the criteria. We express an incredible need but we don't have the population,” he said.

Hawke is not alone in thinking cities of Gardner's size should have the opportunity that come with the Gateway designation. Last month, the fiscal year 2014 budget passed by the state Senate included an item that would lower the population threshold to 20,000. That would add nine communities as Gateway cities: Agawam, Gardner, Gloucester, Ludlow, Milford, Randolph, Wareham, West Springfield and Yarmouth.

In a statement about the proposed adjustment, the Senate chairman of the Legislature's ways and means committee, Stephen Brewer, D-Barre, said the nine communities “already meet the additional requirements of a Gateway municipality, and they are areas that have seen economic success before … Investing in these communities, by opening them up to the benefits available to Gateway Municipalities, is an investment in infrastructure, jobs and in the sustainability of the state's economy for the future.”

The same item was approved by both the Senate and House of Representatives for 2013, but was vetoed by Gov. Deval Patrick, who said the change would dilute funding for targeted communities.

Current Gateway City officials have similar concern, as does Forman, of MassINC, a Boston-based think tank. Last year, when the institute formed, it brought together two stakeholders from each Gateway City to find common policy issues to lobby the state government.

Finding Common Concerns

“All of that work depended on there being a shared interest or shared experience, and that's one of the big issues as you start to grow the number of cities,” Forman said. “It becomes apples to oranges.”

He said the more common the communities, the more specific their issues can be and therefore, the state's return on investment would become easier to recognize.

Forman said it's also important that Gateway communities have assets and economic engines such as hospitals, colleges and universities or transportation.

“The economy is only going to perform strongly if all its regional economies are growing. So ... targeting places that drive regional economies makes a lot of sense,” he said.

Read more

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Sen. Brewer bowing out after nearly 35 years in Legislature

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