EASTHAMPTON — Say a developer wanted to build new housing units in Easthampton, but the strain of additional traffic to the new units requires changes to the streets nearby. What if the developer can’t finance those infrastructure costs, caused by the new development, but not really a part of it? Should the costs be added to the city’s list and taken care of when funds are available and other priority projects are done? Could such added costs scare away developers that could create housing or economic growth for the city?
These are considerations Easthampton is looking to address with a new proposal by Mayor Nicole LaChapelle to create a District Improvement Financing program. Known as a DIF, the proposal has two steps, according to the Pioneer Valley Planning Commission.
First, create a district in the city earmarked for development opportunities.
Second, create an in-depth and specific plan for any new development in that district where a portion of tax revenue from the new development is sent directly back into capital improvements and infrastructure costs in the district, such as roads and sidewalks.
At a June 6 City Council meeting, the city voted to move forward on the first step, selecting an area around Ferry Street and the Mill District to be designated a DIF district, and sending that selection to the Finance Committee.
LaChapelle explained that step one, the creation of the district, means absolutely no financial obligation on the part of the city and there is also no requirement that the city move on to step two, creating a development plan. She just wants the city to be ready for opportunities ahead, she said.
“This will add to the attractiveness of the Mill District for developers,” LaChapelle told the City Council. “We’re seeing some increased interest in this area and we want to make sure that developers know that we want to be a willing and ready partner.”
City Planner Jeffrey Bagg said the example of the housing units and necessary road upgrades best illustrates the DIF proposal’s goals for the city. Capital improvements can be taken care of quickly and with revenue directly from the development project those capital improvements would support, he said.
“This is a really focused way to pay for the infrastructure for a development project using the revenue from that project,” Bagg said.
According to the state, a DIF “enables municipalities to finance public works and infrastructure projects in a designated area by ‘capturing’ the increase in property tax revenues derived from new housing, commercial or industrial activity in that area and applying such revenues towards the municipality’s development program.”
LaChapelle called the proposal a “green flag” to developers, signaling that the city wants to work together to foster new development.
The DIF proposal is a component of her administration’s goals for sustainable development and housing options for residents at all different places on the economic spectrum, LaChapelle said. In conjunction with four community compact grants the city has been awarded, along with a $28,000 Municipal Vulnerability Preparedness grant and being designated a Massachusetts “opportunity zone,” LaChapelle said that creating a DIF program would count towards “points” on a MassWorks grant later this year, which may help the city receive a higher funding amount.
MassWorks is a competitive grant program that provides funds for public infrastructure projects that support and accelerate housing and job growth in communities across the state, with a particular emphasis in the 2018 round of funding on projects that provide multi-family housing in walkable, mixed-use districts and result in immediate job creation or economic development.
LaChapelle said the deadline to apply for a MassWorks grant this year falls on Aug. 10. She said the city is “well poised to receive a high MassWorks grant,” which could further work in the Mill District and other places in Easthampton that would be good for development, such as around the Route 10 corridor.
Now, step one of the DIF proposal goes to the Finance Committee and subcommittee, before being up for discussion at a public hearing.
Step one is just a geographic designation of the district, LaChapelle emphasized, and the public hearing will be a chance for comment on the creation of the district and its location, without locking the city into any financial obligation. Those will be considered in step two, LaChapelle said, a more complex process that involves many more meetings and public hearings to create a development plan for that district.
Whatever development plan the city may create in step two, LaChapelle said it will be aligned with the city’s master plan and will be focused on creating “opportunity for everyone to choose to live in Easthampton.”
“This is a next piece of what my administration has been working on to get complex pieces of land ready or as close to shovel-ready for development and investment as we can,” LaChapelle said. “This is us saying to developers ‘We’re going to work with you on this complicated piece of property with both state and federal partners, so come talk to us’.”
M.J. Tidwell can be reached at mjtidwell@gazettenet.com.