Union Square District Improvement Financing
Somerville, a dense inner suburb adjacent to the urban core of Boston, hired RKG to develop the financial model for a new District Improvement Financing Plan for its Union Square neighborhood, in anticipation of gaining MBTA mass transit access in 2021.
The expected transformation of Union Square from a small-scale, mixed-use neighborhood interspersed with old industrial buildings into one of Boston's next great "places" would require massive investment from the City for streets and sidewalks, water and sewage systems, particularly drainage infrastructure as the area is prone to frequent flooding. Within the neighborhood are three distinct sub-areas, each with active development plans that envision an entirely new mix of uses for existing parcels. The development program is expected to create up to 4.5 million square feet, with 2.7 million square feet of office, lab, retail, and hotel space, and 1.7 million square feet of residential space (around 1,500 housing units, 20% of which would be permanently affordable).
RKG's DIF financial model was used by the City to evaluate several future development scenarios on a parcel-by-parcel basis, with new investment occurring over the following twenty years. The forecasts of the value and timing of new development enabled the City to fine-tune its infrastructure funding plan and quantify its risks. The Somerville Board of Aldermen voted to establish the DIF after receipt of the model.
City of Somerville