The unexpectedly high number of homes planned for Quincy’s downtown redevelopment will add $2.3 million in revenue due to the city, but officials have to wait a while to collect it.
The payment is part of a deal made at the start of the $1.6 billion downtown project, which called for developer Street-Works to pay $10,000 to the Affordable Housing Trust for every housing unit in the downtown redevelopment. The money will be used to create affordable housing elsewhere in the city.
Payments were to be made in increments, as each part of the redevelopment proceeded. But when plans for the residentially heavy Merchants Row were unveiled last summer, the dollar figures ballooned.
“With the redesign of Merchants Row and an increase in housing units, it puts a significant financial burden [on Street-Works], which was not anticipated in [the initial plans],” said Paul Hines, the city’s assistant solicitor.
The shift in plans accelerated the development on the block of buildings within Hancock Street, Chestnut Street, and Cottage Avenue. The number of planned residential units in the project’s first phase grew from 70 (with $700,000 owed to the city) to 300 ($3 million).
The arrangement was put in place because it wasn’t economically feasible to include affordable housing within the downtown development, officials said.
“The project we’re doing downtown is an expensive project, and it’s going to carry additional tax levies than areas outside of the downtown, which added together makes any kind of affordable housing very, very challenging,” said Lucy Wildrick, a partner at Street-Works.
“Under the [development agreement], the taxes are considerably higher than what they are today . . . on its face, that changes the economic dynamic of housing,” she said. “The city . . . acknowledged that and agreed that it would make sense to pay into the Affordable Housing Trust Fund instead.”
Though Wildrick said the promise to pay into the Affordable Housing Trust Fund stands, Hines said his office had worked out a deal with the developer to delay the unexpectedly large payout until the developer purchases the Ross Parking Garage, which is essentially the start of the next phase of the process.
In the meantime, the city will receive the $700,000 as anticipated.
“It seems clear to me this is just an opportunity for Street-Works to buy a bit of time because there was an unanticipated substantial increase in housing’’ at Merchants Row, said Councilor Doug Gutro.
At a meeting last week, Hines told councilors that the Affordable Housing Trust Committee had unanimously supported the idea. Members of the trust could not be reached for comment.
According to Wildrick, this deal in no way indicates the developers are running short on cash.
“It’s really that this is a project being delivered in the Quincy of today and not the Quincy of tomorrow, and it’s very challenging economically,” she said. “This is an agreement that allows the whole to go forward in a way that is equitable.”
Jessica Bartlett can be reached at firstname.lastname@example.org.