By Matt Murphy, mmurphy@lowellsun.com
BOSTON -- Hamilton Canal District developer Trinity Financial has told top state officials the first phase of the revitalization project set to begin in May could be in jeopardy without $23 million in state financing before the end of the year.
The request came as a surprise to state Sen. Steven Panagiotakos and the city's House delegation who met with Jim Keefe, of Trinity Financial, yesterday afternoon in Boston along with city officials and state Secretary of Economic Development Dan O'Connell.
The first phase of the $800 million redevelopment project includes the construction of 135 units of affordable, artist living and working space at the site of the crumbling Appleton Mills. The Freudenberg Building, which will be transformed into 60,000 square feet of office space, is waiting to go but will be developed privately by a third party.
Keefe, in a letter to Panagiotakos dated Oct. 15, told the senator he was counting on three key sources of state funding to move forward with construction. The timing of the request and amount of money being sought could prove to be very difficult to secure at a moment when the state is monitoring every penny closely.
"We understand the extraordinary fiscal challenges facing the Commonwealth," read the letter obtained by The Sun. "Nevertheless, the $10 million that you were able to include in the Transportation Bond Bill earmarked for the Hamilton Canal District is essential to allow us to begin the design and engineering phases for the public infrastructure."
Panagiotakos said he was surprised by the size of the request from Keefe, because he and the rest of the Lowell delegation had never been told how much assistance Trinity Financial was counting on from the state. Though the tight time frame laid out by Keefe could prove challenging, Panagiotakos said he is encouraged by the meeting held in his office late yesterday afternoon.
"It was a constructive meeting and the secretary's interest is a major help for us," Panagiotakos said. "He understands that this project is really one that can get started right away, and there is a benefit to that."
Keefe and the city had originally requested a $4 million earmark in the borrowing bill, which was increased by Panagiotakos to $10 million because he anticipated costs may rise.
Earmarks serve as place holders, but are never a guarantee that the money will be released or spent for that purpose. All spending has to be approved by the governor's office after a review of the project and plans for the funding.
Keefe now says he needs the full $10 million to proceed, plus help in securing $13 million from a separate fund created to help expedite development projects in key "growth districts."
Though the Hamilton Canal District has been designated a growth district by Gov. Deval Patrick, Keefe is asking for a significant chunk of the $50 million growth district fund that is intended to help more than a dozen similar areas in the state.
The final portion of state funding being sought by Trinity Financial comes in historic tax credits awarded through Secretary of State William Galvin's office. Keefe has asked for $3.5 million in historic tax credits for the Appleton Mills redevelopment, though Galvin typically awards the credits in $1 million increments.
Trinity Financial is looking, at least, for a commitment from the state for the funding by Dec. 1 so that it can secure private financing for the project in time to begin construction this spring.
City Manager Bernie Lynch said he felt positive about the meeting and came away confident that O'Connell recognized the importance of this project to the city. More meetings will be scheduled in the coming weeks between the Patrick administration and Trinity Financial to discuss details of phase-one construction.
"It's going to very difficult to move forward without this money," said Lynch, who said he is confident despite the time sensitivity of the request.
"It's a very challenging project in the fourth-largest city in the state that will really transform our city," he said.
The Appleton Mills redevelopment project could be complete by October 2010 if all goes according to plan, Keefe wrote in the letter. The Freudenberg building will take slightly less time to complete.
This story appeared in the Lowell Sun on Friday, November 7, 2008