By Jack Encarnacao | The Patriot Ledger | March 2, 2013
Demolition of Quincy Center’s timeworn buildings is set to begin next month, the first step in the first piece of the long-awaited $1.6 billion downtown redevelopment project. When it starts, eyes far from Quincy will be watching.
The project, which will see the creation of 3.5 million square feet of business, retail and residential space in Quincy Center during the next seven years, has been picked up on the radar of experts in development and urban planning circles – experts who until recently did not know Quincy from Milwaukee.
In presentations across the country, the Washington, D.C.-based Urban Land Institute is citing the Quincy project as one to watch. Northeastern University is planning a course for the fall semester called “The Quincy Model,” in which the public-private partnership behind the project will be used as a teaching tool. The New York Times and trade journals have published articles about the project.
So far, the project has attracted nearly $200 million in investment from outside Massachusetts, and the venerable Boston firm The Beal Companies has signed on as a venture partner.
“It has the potential, really, to begin to redefine the conversation nationally,” Thomas Murphy, a senior resident fellow at the Urban Land Institute, said about the project. “This sort of puts Quincy on the map. It catches the eye of other people. People like creative deals like this.”
If the sprawling development unfurls as envisioned, the model behind it could become a new paradigm for how cities and developers can work together and divvy up risk in a post-recession world to revitalize staid urban areas, experts say.
“It really will be one of the earliest major city projects to come out of the recession and into the recovery,” said Gregory Bialecki, Massachusetts’ secretary of housing and economic development.
The state is putting tens of millions of dollars in grants and financing into the development and related projects, like the ongoing relocation of Town Brook.
The project’s master agreement calls for master developer Beal/Street-Works to make $289 million of improvements to city assets like sidewalks, utilities and parking. Quincy will buy those improvements back, but only once Beal/Street-Works’ new buildings are producing more than enough tax revenue to cover the borrowing costs.
Such commitments are rare and not easy to wrangle, experts say, and they tell the marketplace that the project will not be slowed by politics or bureaucracy.
“It is very hard for public officials and the private sector to come to terms in a creative process,” said Alan Trager, chairman of the public-private partnerships study group at the Ash Center for Democratic Governance and Innovation at Harvard’s Kennedy School. “The fluidity required for creativity is sometimes not possible at all legal and regulatory levels of government.”
Bialecki, the state’s economic development chief, said the city’s $289 million bond commitment, made during an economic recession, makes the project jump off the page among a slew of half-baked urban redevelopment plans.
“There’s no question in my mind the reason it was able to start so quickly, and catch the wave of an economic recovery so quickly, was because of the public commitment in infrastructure made during the downturn,” he said.
The commitment is an acceptable risk, for the city, Mayor Thomas Koch said. The city’s bond counsel approved the plan because the revenue to cover the debt needs to be demonstrably flowing before the city is on the hook.
“It never touches the general fund; that was number one on our end,” Koch said. “We want to control our own destiny. We put together a plan that says, ‘Look, the city’s putting it on the line.’ ”
Street-Works, an urban development company, came to Quincy in 2005 to help client Stop & Shop assess whether it should keep its headquarters in Quincy Center. Soon afterward, it pitched a large redevelopment for downtown, and it made a statement with its $8 million purchase of the Granite Trust building, where its Quincy offices are now located.
The downtown project will also be tracked as a test case of how to build on the post-recession trend of Americans, priced out of the housing market due to tighter lending standards, seeking rental housing with services within walking distance.
A 2011 Urban Land Institute report, which cites the Quincy Center project, estimates that 6 million new renter households will be formed in the U.S. from 2008 to 2015. This, the institute reports, will require 300,000 new rental units to be built each year, compared with 100,000 in 2010.
Experts say the trend toward rentals is particularly pronounced among baby boomers and “millenials” – those from 18 to 32. The Quincy Center project targets that demographic with plans for loft apartments.
“You can see that they’ve got a vision here based on very good research, very good accounting, and a very good understanding of coming demographics,” said Barry Bluestone, director of the Dukakis Center for Urban and Regional Policy at Northeastern University. “There are a few places, if this is carefully done, where this could, in fact, be quite feasible, financially feasible. It’s exciting to see it happening.”