Part one of a two-part story
By Mary E. Arata
HARVARD -- The Devens Economic Analysis Team continues to fine-tune its projections of likely revenues and expenses should, theoretically, Harvard resume jurisdictional control over former Fort Devens Army base lands. Of the 4,400-acre Devens Regional Enterprise Zone, 60 percent of the land was once governed by Harvard before the Army purchased the acreage from Ayer, Shirley, Harvard and Lancaster landowners.
Harvard selectmen charged the DEAT to project "a current municipal operating budget for Devens as if it were part of the town of Harvard," explained DEAT member Duncan Chapman. "We're not really here to make recommendations either way but to follow our charter."
State agency MassDevelopment oversees DREZ build-out and management. DEAT Chairman Victor Normand said at the panel's Dec. 11 public information session that the agency has increasingly shared information and some of its development strategies.
Normand said MassDevelopment has invested heavily over the past decade in infrastructure upgrades suggestive of the idea that the agency is "teeing-up" mainly commercial/industrial, and not residential, development within the DREZ.
Rezoning initiatives to repurpose the vacant Vicksburg Square into a housing complex failed to win tri-town approval in 2009 and 2012. A 200-acre stretch of land off Grant Road is the focus
Follow the power lines
"Their robust infrastructure is intended to support industry, not residences," said Normand.
But what of more school-aged children, asked Harvard resident Ellen Sachs Leicher. Normand answered, "I believe there's far more potential within Harvard itself" for large-scale residential development that could ratchet up education expenses.
The DEAT intends deeper focus on DREZ utilities -- how they're run now and how they may be owned and operated in the future. One notion that could occur with the final state disposition of the DREZ lands is the creation of a super utility that makes payments in lieu of taxes to the towns.
Currently, day-to-day utility operations are outsourced for electricity (Wellesley Electric), gas (National Grid), and water (United Water) services. MassDevelopment maintains its own wastewater treatment plant and serves Ayer and the Shirley prison.
"Devens utilities are unique in the state," said DEAT member Paul Green. Typical cities and towns are served by publicly or privately owned utility companies.
If and when DREZ disposition takes place, "then we, the citizens and the state, will have to make a decision about how to protect that investment," said Green. "There is no provision in Chapter 498 for anyone other than MassDevelopment to make that decision."
It's cause for review by the region because the DREZ utilities could be sold (whole or in pieces) to profit-driven investors, which could cause pricing to spike. DREZ users pay 12 cents per kilowatt hour, whereas Harvard users pay 16 cents per kilowatt hour.
"That's a big difference if you're (now former) Evergreen Solar, Saint Gobain or the movie studios," said Green of those properties, all located within Harvard's town bounds. Per law, DREZ electric and natural gas systems are restricted to Devens. But not for water works (providing service to both Ayer and the state prison in Shirley) and wastewater service available to all -- by pipe or by truck.
The DREZ wastewater treatment plant is located within Ayer, which could be fortuitous in terms of tax revenues (or payments in lieu of taxes) to Ayer, depending on disposition. "For Harvard, not so much," said Green.
Electricity build-out and upgrades were financed by MassDevelopment by bond offerings. Data from June 2007 through 2011 suggests $14 million or 11 percent profit to MassDevelopment after expenses over the last 4 years and $225 million in gross revenues. However, data through the June 2012 reporting period isn't yet available, reflecting the closure of former heavy user Evergreen Solar in 2011.
MassDevelopment reports 90 percent completion on its infrastructure build-out and a solid track record of electric service during storms. "The state will want assurances it's properly managed going forward," said Green. A successful utility network helps attract and retain business and jobs on Devens, he said.
DEAT data suggests smaller deficit
A year ago, the DEAT estimated a $1 million deficit were the Town of Harvard to resume jurisdiction over Harvard/DREZ lands. Now, a year later, the DEAT projects the gap would be a smaller $850,000 sum. Factoring in utility-based revenues, and money "should come back," said Normand.
It's unclear which town would benefit from utility profits -- would Harvard get 60 percent because that's its historical land share? Would the three towns split it into thirds? What, then, if a major user closes doors, like Evergreen Solar did in 2011? Those are all questions to answer.
"Our committee view is we'd like to have conservative data to stand behind yet to create a frame work that's capable of being updated year after year," said Normand.
If jurisdiction returned to Harvard (which now has a 95 percent residential tax base), the new total tax base would shift, creating a combined 16 percent commercial, industrial and personal (CIP) tax base. Here, the term "personal" means mainly taxable utility infrastructure -- pipes, conduits, phone poles, substations, etc.
How does that look in terms of a budget? DEAT projects Harvard's municipal budget, which was $20.8 million in fiscal 2011, would need to climb to $25.1 million to provide services the former Harvard/DREZ rate payers.
The DEAT compared the expanded Harvard to eight other communities that, likewise, have similar 16 percent CIP tax bases. Leicher noted that the blended Harvard/Devens population of 5,928 is roughly half that of the other eight communities. DEAT admitted there's wasn't a neat apples-to-apples comparison, and hoped a town planner could eventually be employed to fine tune the formula.
There are also beacons of light in terms of future development on Devens, despite economic slowdown. The total Devens assessment increased by $100,000 in fiscal 2012, half of the Evergreen plant is being fitted for occupation, Bristol-Myers Squibb plans to expand, and a $30 million movie and television studio is under construction, all within historical Harvard bounds.
Four million square feet have been permitted or built-out since base closure. The Devens master permit allows for 8 million square feet of build-out, but talk is the DREZ land area could sustain 12 million square feet of development if re-permitted by the state. Nine of 11 properties being marketed for sale are within Harvard's historical town bounds.
Ayer's potential redevelopment zone is limited to the North Post and former Moore air field, while Shirley is working with MassDevelopment now towards the potential rezoning and development of a "Shirley Village Growth" district atop its former lands and aside it's municipal seat of government, built within the DREZ.
Tax Incentives Financing (TIF) deals are in place and can defer taxes on development for up to 20 years. Evergreen Solar had secured but later lost its TIF package with bankruptcy; Bristol-Myers Squibb's initial TIF runs out in two to three years, said DEAT.
To those concerned about servicing a business park, Chapman noted that the Taunton and New Bedford office parks are each run by two administrators overseen by a commission. "Everything else is outsourced," said Chapman.
"Ours is a strictly economic focus," said Normand. "We don't really say positive or negative -- that really transcends final disposition ... We are really trying to be neutral in that respect."
"There's still a great deal of (Devens) growth to come," said Normand, who said MassDevelopment has several projects "teed-up" for further build-out and that environmental cleanups are "virtually complete."
The Devens draw is that there's both infrastructure and land available -- a mix not found in more rural and heavily built-out urban settings. "As the economy improves, you'll see significant growth there," said Normand, who is himself a former decade-long MassDevelopment employee in both real-estate sales and marketing.
The meeting closed with a request for the DEAT to broaden its perspective. Rick Bernklow, a member of the Devens Advisory Committee, said "I hear a lot of what Harvard can get from Devens. I don't hear a lot of what Devens can get from Harvard ... I know it's your economic analysis."
If Harvard thinks it ever wants to bid on the Devens police contract, continuously held by the Massachusetts State Police, Bernklow asked that literal as well as figurative roads be built to bridge the Harvard and Devens populations "if you're going to tie the two communities together."
Normand said the DEAT is seeking feedback from the public at large, and intends to take its show on the road to other the towns and Devens itself in the immediate future. It's made itself available several times over its past formative two years.
But DEAT is not charged to tackle "soft" or "cultural" issues, said Normand. He hoped that "background noise" on social concerns would not prevent the DEAT from reaching "a correct conclusion" on its charge -- nailing down the revenue and expenses associated with operating the DREZ.
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