ORGANIZATIONAL MODELS FOR REVITALIZATION

& REDEVELOPMENT

 

Under the urban renewal program, municipalities are authorized to revitalize substandard, decadent or blighted open areas for residential, commercial, industrial, business, governmental, recreational, educational, hospital or other purposes. Urban renewal projects help municipalities redevelop deteriorated areas by providing the economic environment needed to attract and support private investment.  The urban renewal program places great importance on the achievement of socio-economic development such as job creation, the addition of tax revenue to overburdened communities, the production of housing and/or the expansion or siting of industry or business.  Future development within designated urban renewal areas must be undertaken in accordance with use limitations specified in approved urban renewal or economic development plans. 

 

The Urban Renewal Process has entered a second phase since its initial creation and implementation.  Earlier urban renewal projects were characterized by large-scale property acquisition and clearance with timelines for build-out of thirty or more years.  Some of these early urban renewal projects cleared vast tracts of land that remained vacant or underutilized for decades.  More recent urban renewal projects involve a combination of public actions to revitalize neglected, underutilized and blighted areas by minimizing clearance and utilizing tools such as tax incentives (tax incremental financing, historic tax credits and housing tax credits), infrastructure improvements and the expenditure of public funds as catalysts for private investment.  Timelines for implementation of urban renewal activities have been reduced dramatically to build-out periods of twenty years, with significant construction activity within the first two to five years.

 

The urban renewal process can help stimulate development by providing tools to:

 

·        Designate an economic development target area with clear geographical boundaries.

·        Consolidate various development and related activities into a comprehensive plan characterized by an implementation strategy.

·        Assemble and dispose of land, including the taking of land by eminent domain.

·        Enforce use limitations on future development activities.

·        Protect the municipality’s taxing authority.

·        Create an economic development entity with a single economic development agenda.

·        Leverage private investment in the redevelopment area.

·        Equalize the private market place for municipalities.

 

Several different organizational agencies under urban renewal are available to municipalities planning to undertake community and economic development projects.

 

 

 

REDEVELOPMENT AUTHORITY:  Under c. 121B, municipalities are authorized to form urban renewal agencies called redevelopment authorities for the purpose of redeveloping and improving substandard, decadent or open blighted areas as well as planning for their future land use.  A Redevelopment Authority is governed by a five-member board; four members appointed in a city and elected in a town.  The Department of Housing and Community Development appoints the fifth member.  Redevelopment authorities have the power to:

 

·        Establish rehabilitation and design standards

·        Assemble and dispose of land including the taking of land through eminent domain

·        Relocate businesses and residents occupying urban renewal sites

·        Demolish and/or rehabilitate substandard structures

·        Participate in real estate development and commercial revitalization

·        Issue bonds, borrow money and invest funds

·        Receive grants and loans

·        Accept gifts or requests

 

The development and approval of an Urban Renewal Plan is necessary before a Redevelopment Authority can undertake certain projects.  Redevelopment Authorities are exempt from M.G.L. c.30B, the Uniform Procurement Act, when engaged in the development and disposition of real property in accordance with an approved Urban Renewal Plan.  This exemption, coupled with the ability to use eminent domain powers, makes Redevelopment Authorities particularly effectively in large scale and complex redevelopment projects – i.e., Redevelopment Authorities can assemble land into developable parcels and convey them to private redevelopers. 

 

ECONOMIC DEVELOPMENT INDUSTRIAL CORPORTION:  Under c. 121C, municipalities are authorized to form economic development and industrial corporations (EDICs) for the purpose of redeveloping blighted industrial areas, thereby stimulating the local economy and addressing unemployment.  Among the various entities that may be created under M.G.L. to facilitate development, EDICs have the strongest development powers.  EDICs are authorized to:

 

·        Undertake economic development project planning

·        Acquire and dispose of land including the taking of land through eminent domain

·        Develop, sell, lease, mortgage, transfer or exchange property

·        Borrow and invest money and issue corporate as well as revenue bonds

·        Receive grants, loans or advances from federal/state/local government

·        Pledge the credit of the municipality

·        Finance pollution control facilities

·        Manage projects

·        Act as an Urban Redevelopment Corporation under c. 121A

 

In contrast to the broader scope of projects allowed under c. 121B for Redevelopment Authorities, EDICs under c. 121C are restricted (1) to communities defined as labor surplus areas by the U.S. Department of Labor and (2) to industrial and manufacturing development activities. 

 

ECONOMIC DEVELOPMENT CORPORTION:  A number of communities have used c. 121C as the basis for special legislation that creates Economic Development Corporations that can undertake a wide range of local community economic development projects.  Municipalities generally create these organizational entities under special legislation for two reasons.  (1) Municipalities that are ineligible to form EDICs (i.e., are not designated by the U.S. Labor Department as labor surplus areas) but want to take advantage of the broad powers available to EDICs under the statute, may create similar entities under special legislation.  (2) Municipalities may use special legislation to expand the range of eligible activities that the Economic Development Corporation may undertake beyond the industrial activities under c. 121C to include commercial, business, housing, recreation, social services, education, and other nonindustrial projects.  Under special legislation, a municipality is able to customize the design of its Economic Development Corporation so that its activities, organizational structure, and powers and authority meet local needs. 

 

Economic Development Corporations created under special legislation include:

 

·        Amherst EDIC – Chapter 93/1995

·        Acton EDIC – Chapter 135/2001

·        Billerica Financial Development Corporation – Chapter 165/1994

·        Boston EDIC – Chapter 1096/1971

·        Bourne Financial Development Corporation – Chapter 368/2000

·        Brockton 21st Century – Chapter 137/1993

·        Everett Development and Finance Corporation – Chapter 73/1982

·        Framingham EDIC – Chapter 124/1995

·        Lynn EDIC – Chapter 124/1977

·        Mashpee EDIC – Chapter 376/2002

·        Northern Berkshire Industrial Park & Development Corp. – Chapter 758/1985

·        Plymouth Development Corporation – Chapter 182/2002

·        Quincy 2000 – Chapter 102/1992

·        Shrewsbury Corporation – Chapter 493/2002

·        Watertown EDIC – Chapter 460/1996

 

Quasi-public bodies:  Redevelopment authorities, EDICs, and Economic Development Corporations created under special legislation are quasi-public bodies -- i.e., publicly chartered but governed by an independent board comprised of public and private sector representatives.  Quasi-public bodies centralize community and economic development activity and authority primarily outside the control of the local chief executive, as independent bodies, corporate and politic.  State statutes are specific in granting major powers to an independent body not within a municipality’s executive purview.  They were created intentionally out of the mainstream of the political process in order to limit the ability of local governing bodies to exert control over their actions.  None of these three organization entities is an agency/department of the municipality and therefore, none answer directly to the chief executive.  This affords each more autonomy in planning and implementing revitalization and community and economic development programs.

 

CONSOLIDATED COMMUNITY DEVELOPMENT DEPARTMENT:  However, the city may also want to consider creating a consolidated community development department charged with the broad range of duties and tasks involved in community and economic development.  Consolidated community development departments are designed to coordinate the myriad of municipal agencies and other entities involved either directly or indirectly with economic development.

 

Under c. 43C, the “local option” statute, a community may create a community development department that is “authorized to exercise any community or economic development activities.”  A consolidated department is able to assume the legal powers and duties of the numerous offices, agencies or authorities whose functions are superseded by the creation of the department.  Consolidating the responsibilities and powers of the Redevelopment Authority (c. 121B), the Planning Board (c. 41), the Economic Development and Industrial Corporation (c. 121C), the Industrial Development Finance Authority (c. 40D) and any other municipal office, agency or entity engaged in community and economic development serves to coordinate local development efforts.  The coordination encourages a comprehensive planning and implementation approach to economic development. 

 

Not all consolidated departments consolidate the same agencies when they are formed. Reorganization may take many forms.  For example, the quasi-legislative power of subdivision control, the power of eminent domain, and/or the authority to purchase property for private sale or lease can be concentrated within one individual or body responsible to or outside the control of the local chief executive. This decision must be resolved at the local level.

 

A municipality may create a consolidated department through either special legislation or local ordinance or by-law.  Under the ordinance/by-law approach, and in contrast to special legislation, the consolidated community development department does not possess any legal authority of implementation.  This authority remains with the individual boards, commissions, authorities and corporations that possess powers and authority allowed by state legislation.  Consolidated community development departments created by ordinance/by-law primarily have grant administration and planning functions for those activities where no state powers are being exercised.

 

Under special legislation a consolidated community development department may be authorized to:

 

·        Plan

·        Acquire land through eminent domain

·        Improve property

·        Sell, lease, mortgage, transfer, exchange or otherwise dispose of property

·        Borrow money, invest money and issue bonds

·        Receive grants, loans or advances from federal/state/local government

·        Pledge the credit of the municipality

·        Finance pollution control facilities

·        Manage projects

·        Perform long-range physical, transportation and human services planning

·        Determine land use and zoning restrictions

·        Enforce municipal codes

·        Perform inspections

 

Although consolidated community development departments may possess the same range of powers as quasi-public institutions, their powers are somewhat circumscribed because they function as municipal line departments subject to the oversight and control of the chief executive.

 

If a municipality wants to centralize development activity and authority outside the control of the chief executive, it may consider creating a quasi-independent local board or authority vested with the full discretionary authority and necessary powers of implementation that exist in the various local entities presently charged with community and economic development activity.  For example, many consolidated community development departments have created Community Development Authorities as single member authorities in order that bond and note issues of the redevelopment authority may continue.  The Community Development Authority will undertake future obligations of any authority that is incorporated into the new consolidated community development department.  

 

URBAN RENEWAL TOOLS:  Urban renewal agencies have statutory authority to enforce covenants and agreements contained in any contract or deed as part of an urban renewal or economic development project.

 

Urban renewal agencies are exempt from M.G.L. c. 30B, the Uniform Procurement Act, when they engage in the development and disposition of real property in accordance with an urban renewal plan; an urban renewal plan for a Redevelopment Authority or Consolidated Community Development Department and an Economic Development Plan for an EDIC or Economic Development Corporation.  This exemption, coupled with the ability to use eminent domain powers, makes urban renewal agencies powerful mechanisms for commercial revitalization, housing development, industrial development, infrastructure improvements, facilities renovation and brownfield site remediation. 

 

Urban renewal agencies must develop an urban renewal plan/economic development plan to undertake specific projects in designated economic development areas.  These plans are subject to extensive public participation and local approval processes. 

 

 

 

Contact the Division of Community Services at 617-573-1400 for additional information.