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The 192nd General Court of the Commonwealth of Massachusetts

Section 46: Transformative Development Fund

Section 46. (a) There shall be established and set up on the books of the commonwealth a Transformative Development Fund within the Massachusetts Development Finance Agency. In carrying out its duties under this section, the agency may utilize the fund as provided in this section to make equity investments and provide technical assistance to revitalize and support residential, commercial, industrial and institutional development, or any combination thereof, and to provide financial assistance to promote collaborative workspaces in gateway municipalities. The fund shall be administered and managed by a fund director who shall be appointed by the executive director of the agency. The agency may adopt guidelines necessary to implement the program. The fund may coordinate with other agencies and instrumentalities of the commonwealth to effectuate this section.

(b) The liabilities and obligations of the fund shall not extend beyond the monies which are deposited in the fund and shall not constitute a debt or pledge of the faith and credit of the commonwealth or any political subdivision of the commonwealth.

(c) Monies in or received for the fund may be deposited with and invested by any institution designated by the treasurer of the agency at the sole discretion of the treasurer and paid as the fund director shall direct. Any return on investment received by the fund as a result of the deposits and the agency's equity investments shall be deposited and held for the use and benefit of the fund. The treasurer may make payments from the deposit accounts for use under this section. The agency may be reimbursed annually from the fund for all reasonable and necessary direct costs and expenses incurred with its administration, management and operation of the fund, including reasonable staff time, out-of-pocket expenses and administrative costs.

(d) The fund may apply for and accept subventions, grants, loans, advances and contributions from any source of money, property, labor or other things of value to be held, used and applied in furtherance of this section.

(e) The agency shall use the fund to make equity investments in property that the agency has determined has the potential to constitute transformative development in a gateway municipality. With respect to any property acquired by the fund, the agency may pledge its ownership interest, physical assets held by the ownership entity or any portion of the anticipated gross revenue resulting from the equity investments of the fund to secure loans related to development of the property. The agency may not cross-collateralize the fund's investments in the property.

(f) The fund director shall allocate a portion of the original capitalization of the fund, not to exceed 20 per cent, to provide technical assistance to revitalize and support development in gateway municipalities by utilizing any of the following methods of providing technical assistance: (i) grants to support the hiring of professional staff or professional services by a gateway municipality or any instrumentality of the gateway municipality; (ii) reimbursement for professional staff employed by the agency and embedded in a gateway municipality; (iii) grants to pay for third-party professional services managed by the agency; and (iv) any other variation on the provision of technical assistance consistent with this section.

(g) At its discretion, the agency may allocate the fund's technical assistance through a competitive process using criteria that include, without limitation, the existence of a long-term economic development strategy, commitment to effective use of the agency's technical assistance by the municipality and other local partners and the potential for transformative development in the gateway municipality.

(h) The fund director shall allocate a portion of the original capitalization of the fund to support the development in gateway municipalities of collaborative workspaces to spur innovative and creative business growth and economic activity and assist with the redevelopment of underutilized buildings. The program shall: (i) promote the creation of collaborative workspaces by providing financial assistance for capital investments in underutilized buildings; (ii) foster collaboration and linkages among innovative and creative enterprises by providing central locations for such businesses or individuals to work in an environment designed to promote sharing of resources, experience and expertise; (iii) support partnerships among municipalities, property owners and businesses to establish collaborative workspaces; and (iv) require a collaborative workspace to provide shared space which promotes the interaction, socialization and coordination among tenants through the clustering of multiple businesses or individuals within the collaborative workspace. The agency shall, through grants, contracts or loans, administer the program for the purpose of facilitating a collaborative and co-working space to address a regional market demand for affordable work environments that support communication, information sharing and networking opportunities.

(i) Loans or grants made under this program may be made to property owners or collaborative workspace operators for building improvements which shall be utilized by the collaborative workspace participants provided that the use of the fund results in corresponding private investment that matches or exceeds the grants from the fund. In the case of a grant, any participating property owner or collaborative workspace operator shall at least match the investment of the fund. In the case of a loan, the agency shall reasonably anticipate that its loan will leverage additional private investment in the property.

(j) The agency shall solicit applications for financial assistance that promote collaborative workspaces through a request for proposals. The agency shall establish criteria for the submission of applications; provided, however, that the applications shall include, but need not be limited to: (i) a description of the parties involved in the project, including the professional expertise and qualifications of the principals; (ii) a description of the scope of work that shall be undertaken by each party involved in the project; (iii) the proposed budget, including verification of funding from other sources; (iv) a statement of the project objective, including specific information on how the project shall promote the use of the space as collaborative and shared space; (v) a statement that sets forth the implementation plan, the facilities and resources available or needed for the project and the proposed commencement and termination dates of the project; (vi) a description of the expected significance of the project, including a description of the market demand for the type of workspace proposed in the region that the space shall be located and the number of businesses or individuals that shall be served as a result of the project; and (vii) any other information that the agency shall consider necessary. The agency shall also establish guidelines for the review and approval of applications that include preferences for proposals that: (A) redevelop at least 10,000 square feet in existing properties located in the downtown area of a gateway municipality; (ii) dedicate at least 25 per cent of accessible space to collaborative use; and (iii) support a cluster of at least 15 separate occupants.

(k) The agency shall enter into an agreement with each collaborative workspace operator that receives a grant or loan or enters into a contract under this section regarding: (i) performance measures and indicators that shall be used to evaluate the performance of the collaborative workspace operator in carrying out the activities described in the application; and (ii) any other indicators determined to be necessary to evaluate the performance of the eligible entity. Each collaborative workspace operator shall submit an annual report for the agency's review for the duration of the collaborative workspace operation. The agency shall enter into an agreement with each property owner that receives a grant or loan or enters into a contract under this section regarding the use of funds and the time frame for the use of funds.

(l) The agency shall identify and maintain a list of redevelopment projects within gateway municipalities with the greatest potential to provide substantial local economic growth, job creation, neighborhood revitalization or abandoned and underutilized property reuse. In its investigation, the agency shall prioritize redevelopment projects that may commence promptly after identification. The agency shall outline the economic opportunities at the project sites, describe marketable site uses and describe the benefits of investing in the redevelopment project. The agency shall also describe current impediments facing each identified redevelopment project and outline particular policies and programs in place that provide technical assistance, financing options, permitting aid or any other incentives to pursue redevelopment options.

(m) The agency shall, in coordination with the executive office of housing and economic development, submit an annual report to the clerks of the senate and house of representatives who shall forward the report to the house and senate committees on ways and means, the joint committee on economic development and emerging technologies and the joint committee on labor and workforce development by December 31. The report shall include a current assessment of the progress of each project funded through the collaborative workspace program and the progress of the participants in the program.