Patrick: State Bonds Should Help Private Development
Gov. Deval L. Patrick's office has filed draft regulations that would allow the state to issue $250 million in bonds to pay for infrastructure projects to help private developments in "economically distressed municipalities."
The Infrastructure Investment Incentive Program, or "I-Cubed," would finance new public infrastructure improvements with MassDevelopment bonds secured by the state's own general obligation bonds. The infrastructure improvements will be financed with the new state revenue generated by the private developments made possible by those infrastructure improvements. Once a project is complete, occupied and generating tax revenue, the state will pay off the debt service.
If a project falls short of its revenue goal, the municipality pays for the shortfall.
Developers that seek to take part in the program must project that their projects will generate tax revenue 1.5 times greater than the debt service on the I-Cubed bonds. Developers must also demonstrate that their projects would not be possible without the state infrastructure investment.
To qualify for funding, infrastructure improvements must cost at least $10 million and no more than $50 million. No more than two projects may be financed through I-Cubed in any single municipality. Projects applying for I-Cubed funding cannot receive other public financing, such as tax increment financing, tax credits for economic development or community development grants.
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