city of somerville union square presentation.pdfmayor joseph a curtatone office of strategic...

City of SomervilleCity of SomervilleUNION SQUARE UPDATE

h t t p s : / / www. s om e r v i l l e m a . g o v / d e p a r t m e n t s /u n i o n - s q u a r e - p l a n n i n g

March 5, 2019

Mayor Joseph A CurtatoneOffice of Strategic Planning

& Community Development

PURPOSE:• Provide an update on the status of the design of USQ Block D2• Review the impacts and costs of different alternatives to the design submitted in 2017 for the CDSP• Receive an update on current status and next steps

AGENDA:• Design Efforts• Cost Estimating• Additional Alternate Studies (Underground and Off-site)• Ongoing Issues• Next Steps

Today’s Meeting



DESIGN EFFORTSPublic Process



Neighborhood Plan



Approved CDSP



Next step: Design and Site Plan Review

Plans recently submitted – internal review beginning soon

Submitted plan reflects feedback from the neighborhood meeting and DRC

Approved CDSP



• Design workshop included 3 teams

• This version was determined to be a preferred option

• This version requires:• No on-site above-grade parking• MBTA station entrance

relocation

Neighborhood Team Design



COST ESTIMATINGOriginal and Peer Review



US2 Original Cost Estimate



• NorthStar –US2 consultant

• This estimate is a premium cost – relative to the above-ground garage cost.

• $74,000 cost premium per space

Underground Parking – US2 Estimate



From Exhibit D:

1. Dewatering Costs. The geotechnical report notes that the water table on D2 varies from 2.8 feet below grade to 10.3 feet below grade. Extensive underground construction will result in dewatering costs and treatment of dewatering effluent due to the site contamination.

2. Waterproofing. Since the underground parking structure will be sitting below-grade in an area with a high water table that has been prone to flooding, additional waterproofing and drainage measures will need to be incorporated into the underground garage to keep the garage dry and mitigate ground surface uplift at the lowest level. The Site Section Assumptions do not include the

topsoil and plantings necessary to achieve the landscape vision illustrated by the Alternate Designs.

From page 7 of the NorthStar Estimate:

Cost Estimate Notes



3. Site Environmental Cleanup. The D2 project is planned on land partially created by the filling in of the Millers River in the late-1800s, and has since been used for a combination of commercial, residential and industrial purposes. Both the fill materials and historic industrial operations have contributed oil and hazardous materials to the soil over time. The site is contaminated with polychlorinated biphenyls (PCBs), metals, petroleum hydrocarbons, and polyaromatic hydrocarbons (PAHs) in the soil and VOCs have been detected in groundwater on the small northeast portion of the site.

Cost Estimate Notes



• Due to the contamination, the site cleanup will be regulated by both federal and state laws. The cost associated with site cleanup can be estimated based on the testing performed to date, but the actual cost is uncertain until actual subsurface conditions are uncovered during the construction.

• For the CDSP D2 Plan (i.e., above ground parking plan), sub-surface soil removal and the associated risk and cost is minimized. Soil with PCB concentrations greater than EPA approved clean-up standards will be excavated and disposed of at an out of state land fill. For the balance of the site, a combination of soil removal and soil capping will be employed.

Cost Estimate Notes



• In the Alternate D2 Plan (i.e. underground parking plan), sub-surface soil removal and the associated risk and cost will be much more significant. All the soil excavated will need to be trucked offsite to landfills and in the case of contaminated soil, landfills that charge a premium for disposal. Different levels of contamination will require different disposal costs (assumed $250 per ton for PCBs > 50ppm; $100 per ton for PCBs > 1ppm < 50ppm; $40 per ton for urban fill).

Cost Estimate Notes



4. Brownfield Tax Credits. The estimate assumes that the project takes advantage of the Massachusetts Brownfield Tax Credit program and receives tax credits of 25 – 50% of the eligible environmental remediation cost in accordance with the eligibility requirements of the state program. The market value of the tax credits in the resale market is estimated at 85% based on input from a tax credit seller’s opinion of current market conditions.

Cost Estimate Notes



5. Additional Rentable SF above grade. In comparing the two building programs, the Alternate D2 Plan yielded approximately 19,000 square feet of additional market rate residential (i.e., 80% of 24,000 square feet of additional residential) on levels 1 and levels 2 in the mid-rise and approximately 6,000 square feet of off-street retail/arts space located in the eastern midrise residential building. The land value attributable to this area was estimated to determine the credit amount in the estimate.

Cost Estimate Notes



6. Exclusions. The estimate does not include the additional operating costs associated with operating the additional garage MEP systems in the Alternate D2 Plan. It’s also noted that the western mid-rise residential building and the underground parking construction will conflict with the planned ingress/egress construction easements for the MBTA GLX contractor. The impact of this construction logistics conflict has not been captured in the cost estimate but will not be insignificant if the Alternate D2 Plan is implemented. Lastly, the cost of redesigning the project and any necessary re-permitting that would be required in order to implement the Alternate D2 Plan have not been included.

Cost Estimate Notes



Base estimate for above-ground parking• The above grade option is approximately $45,000 per space (or $13.5 million total including

soft costs)• Adding the base number and the underground premium, the actual cost per parking space

would be approximately $120,000.

Soft costs• The estimate does not include additional design costs

Timeline extension and permitting revision• The estimate does not include cost of the additional time required to complete and apply

for a new design• This may require a CDSP modification, with additional meetings. This results in increased

time and money to the project• This also adds carrying costs on city bonds OR slows the streetscape work in Union

Square

Additional Costs



Peer Review Cost Estimate



• Vermeulens – the City’s consultant that was recommended by residents.

• Our estimate for the below grade parking garage is yielding a $126,429/space unit price.”

Peer Review (Cost Estimate)



“As an added premium to finish the landscaping on the roof of the garage we would recommend carrying an additional $30/sf over the 68,900sf of additional roof area totaling approximately $2M. An additional premium cost if additional depth is required to the garage finished floor level due to landscaping depth requirements we recommend adding $1M per foot of depth added.”

“Excluded from the estimate are: loose furnishings and equipment, project contingency, architect’s and engineer’s fees, moving, administrative and financing costs.”

Peer Review Notes

From page E.18 of the Vermeulens Peer Review:



Initial NorthStar EstimateEstimate cost of above-ground parking$45,000 per spaceNorthStar additional premium for underground$74,618 per space

Total per space approximately$119,618

Total cost$35,288,580

Summary of CostsVermeulens Peer Review

Vermeulens estimate for underground parking$126,429 per space

Total per space approximately$126,429

Total cost$37,928,827



ALTERNATE STUDIESUnderground & Off-Site



300 Parking Spaces



Alternate Underground Studies



Alternate Underground Possibilities

• Alternate 1: 4 levels under D2.1 only

• 112,464sf for $23,207,970

• Approximately $78,671 per space



Alternate Underground Possibilities

• Alternate 2: 1 level semi-automated

• 54,334sf for $16,197,884

• Approximately $107,986 per space

• Additional cost required for stacking equipment required to achieve 295 spaces



Summary of CostsAbove Ground Garage:$45,000 per space$13,500,000 total cost

NorthStar Estimate of Underground Garage$119,618 per space$35,288,580 total cost $21.8 million cost premium

Vermeulens Initial Peer Review$126,429 per space$37,928,827 total cost $24.4 million cost premium

Four levels under D1 – Vermuelens EstmiateApproximately $78,671 per space$23,601,300 total cost $10.1 million cost premium

Semi-automated Garage – Vermuelens Estmiate**$107,986 per space$16,197,884 total cost $2.7 million cost premium** Does not anticipate stacked parking or provide for cost of vehicle stackers



Alternative Off-Site Studies



• Off-site office parking cannot be TOO far from the front door

• Off-site parking in some locations must be temporary

• There can be no gap in time for access to parking

• Surface lots for 300 spaces can be very large

• Temporary structures can work, but add cost

The off-site challenge



• Temporary structures – can be dismantled, relocated, and re-used

• Stacking systems

Temporary and Off-Site Possibilities



Temporary and Off-Site Possibilities



There are not feasible off-site options

The Offsite Challenge



ON-GOING ISSUESRelated & Surrounding



STATION ENTRANCE DESIGN



MBTA Station Entrance Design

From: https://www.mass.gov/files/documents/2019/02/05/glx_Union_Sq_Station_1218.pdfJanuary 30th Public meeting presentation is available online at https://www.mass.gov/files/documents/2019/02/04/dot-glx-presentation013019.pdf

https://www.mass.gov/files/documents/2019/02/05/glx_Union_Sq_Station_1218.pdf



A PARK FOR UNION SQUARE



Park Sites



“The Neighborhood Park shall be located as shown in the application ... on Parcel D1 or on a comparably sized location approved by the Director of Planning in accordance with conditions 3 and 8 above. If further study and additional community input indicates to the Director of Planning that an alternative location on the D blocks would improve the attractiveness, access, and functionality of the park, the Director of Planning shall, at that time, direct the Applicant to move this civic space to Parcel D7 while maintaining at a minimum the amount of appropriately sited open space described in earlier versions of the plan on the D blocks. Regardless of this, a Civic Space must be maintained on D1 and on D7 ...

Condition #30



Additional community input, as referenced above, shall include, but not be limited to, a design workshop (format approved by the Director of Planning) to be attended by urban designers and other professionals with appropriate backgrounds who are familiar with the neighborhood, in addition to representatives of the Applicant and the City, and any such workshop will consider the open space plan for the D Blocks in the context of the Neighborhood Plan, from an urban design and planning perspective, taking into account the multiple perspectives expressed and documented at earlier community meetings. The workshop shall be open to the public and/or incorporate or be followed by a public presentation of findings and results.

Condition #30



As this process continues, the Director of Planning will also submit a zoning amendment to change the overlay subdistrict on the portion of D7 mapped as MR4 to be mapped at MR5. Should an amendment be approved that changes this subdistrict, without any other substantive change being made to the zoning as approved in June 2017, the Applicant has agreed to file an application to shift some development from D7 across Warren Street into this newly up-zoned area, thereby allowing for a larger civic space on D7 while maintaining the Neighborhood Park on D1…”

Condition #30



THE ‘INDOOR’ SPACE



The Applicant will work with the Neighborhood Council and interested parties in the Union Square community to allow for the inclusion of an "indoor civic space" as a part of the design process. An "indoor civic space" is a space provided to a public and/or non-profit use or uses, with ground level access, within the interior of a D Block building. The Applicant shall, in collaboration with the Neighborhood Council, make reasonable efforts to identify the appropriate tenant or tenants for lease of this space for civic uses within the appropriate development block and the applicant shall work to consummate a lease with said tenant. This effort shall include, at a minimum, the following steps: a) seek interested tenant or tenants; b) work with tenant to develop a program; c) work with tenant on size of space for the program; d) work with tenant to locate the optimal site for the tenant. The applicant shall provide updates and collect feedback from the Neighborhood Council as the process unfolds, particularly with respect to steps (b) and (d). The Planning Board expects that the Neighborhood Council will work with the entire Union Square community as well as with the Applicant to address the tenant and program, and meet items (a) through (d), above, for the "indoor civic space" within a timeframe that permits the delivery of the "indoor open space" in accordance with condition 31A. The Applicant shall provide regular updates to the Planning Board on these efforts - at a minimum with the submittal of the DSPR for each block. Unless otherwise waived by the Planning Board, the Applicant shall complete the steps and use reasonable efforts to implement the "indoor civic space".

Condition #27A



The Applicant will work with the Neighborhood Council and interested parties in the Union

Square community to allow for the inclusion of an "indoor civic space" as a part of the design process. An "indoor civic space" is a space

provided to a public and/or non-profit use or uses, with ground level access, within the interior of a

D Block building.

Condition #27A



OPPORTUNITY ZONES

Somerville Opportunity Zones

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Opportunity Zones Basics

Qualified Opportunity Zones are economically-distressed communities, designated by states and territories and certified by the U.S. Treasury Department, in which certain types of investments may be eligible for preferential tax treatment. The tax incentive is designed to spur economic development and job creation in distressed communities by providing these tax benefits to investors.

Qualified Opportunity Funds area any investment vehicle organized as a corporation or partnership with the specific purpose of investing in Opportunity Zone assets. The fund must hold at least 90 percent of its assets in qualifying Opportunity Zones property. A QOF can include both capital gains and other funds, but only the capital gains are eligible for the o-zone tax benefits of deferral, reduction and exclusion.

Qualified Opportunity Zone Property is property acquired by purchase from an unrelated party (more than 20% standard) after December 31, 2017; original use in the Opportunity Zone must commence with the O-Zone Business (or OFund) OR substantially improves the property.

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Three Opportunity Zone Tax BenefitsTemporary Deferral: A temporary deferral of inclusion in taxable income for capital gains reinvested into an Opportunity Fund. The deferred gain must be recognized on the earlier of the date on which the opportunity zone investment is disposed or December 31, 2026.

Step up in Basis: A step-up in basis for capital gains reinvested in an Opportunity Fund. The basis is increased by 10% if the investment in the Opportunity Fund is held by the taxpayer for at least 5 years and by an additional 5% if held for at least 7 years, thereby excluding up to 15% of the original gain from taxation

Permanent Exclusion: A permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in an Opportunity Fund if the investment is held for at least 10 years. This exclusion only applies to gains accrued after an investment in an Opportunity Fund.

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Opportunity Zone Basic Structure

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Opportunity Zone Program Beneficiaries● Investors and individual taxpayers with a capital gain,

or the ability to create a gain● Sponsors, syndicators and private equity fund

managers● Businesses formed after December 31, 2017, located in

an OZone and satisfies the requirements of being a qualified opportunity zone business.

● Real estate developers seeking equity investments for their OZ developments

● Communities

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Investors 10-year investment: Fully Taxable vs. OZ

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Fully Taxed Investment

Capital Gain $100,000

-tax payable $24,000

Total Capital to Invest $76,000

Sales Price after 10 years $197,000

-tax on appreciation (24%) $29,070

After Tax Funds Available $168,054

Opportunity Zone Investment

Capital Gain $100,000

-tax payable $24,000

Total Capital to Invest $100,000

Sales Price after 10 years $259,374

-tax on appreciation (24%) $20,480

After Tax Funds Available $238,974

Assumptions: 10% annual investment appreciation; 24% capital gains tax (federal only); source: LISC

Next Steps for Somerville’s OZ Program

● Somerville OZ Working Group○ Develop strategies to mazimize Opportunity Zones in Somerville○ Collaboration between OSPCD, City Council, SCC, LISC, KSG

Student Group, social impact investors, more● Develop OZ-specific marketing tools & investor databases● Build strong relationships with social impact investors● Integrate OZ & P3 Initiatives

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NEXT STEPSApplication Process



• Draft Environmental Impact Report submitted on December 13, 2018

• The final version of the application was submitted to MEPA on approximately January 15th

• Comments were due March 1, 2019

MEPA Review



Land Transfer

City

SRA



• Parcelization and subdivision of land identified in the application materials requires the approval of one or more Design and Site Plan Review (DSPR) applications to establish the new lot boundaries. DSPR applications for parcelization or subdivision may be processed simultaneously with DSPR applications required for development on the lots resulting parcelization or subdivision.

• Each building, civic space, and thoroughfare (including streetscape details) and associated physical improvements requires design review per the SZO, prior to the submittal of a DSPR application. Design review will take into account not only the parcel under review, but also the larger context in terms of relationships, sight-lines, compatibility of materials, pedestrian access, and consistency with the intent of the Neighborhood Plan.

Lot & Block Plan



• DSPR Process for D2 requires 6 different submittals – a subdivision plan, one for each of the buildings, the civic space, and the alley

Next Permitting Steps



Design & Site Plan Review

The Pre-Submittal, Neighborhood Meetings, and Design Review have been completed in accordance with the ordinance



#81 The street-facing portions of D2.1 and the alley way to the east of D2.2 and D2.3 should make accommodations for flooding during extreme storm events. These accommodations must be coordinated with the Engineering Department.

#82 The D2 Block water and sewer connections must be relocated to Prospect Street, and the drain connection location must be coordinated with the Somerville Ave Utility and Streetscape Improvements project drawings.

While initially written to address the D1 Block, this condition should also be addressed for the area between the D2.1 and D2.2 buildings:

#77A Where sides or backs of buildings face a civic space, they must incorporate (physically or visually) strategies that address the public frontage and impact of these spaces. These strategies need not be related to retail spaces or functional entrances, and can be small in scale. But, these spaces should be ambitious, active, and should encourage creativity and engagement. These spaces may include, but are not limited to, public art installations or display cases for artwork, play equipment or a climbing wall, large scale supergraphics or murals, green walls, and/or artist/maker space, etc. The applicant shall, through the DSPR neighborhood meeting process, engage with the community for design and programming suggestions.

D2 Specific DSPR Conditions

City of SomervilleCity of SomervilleUNION SQUARE UPDATE

h t t p s : / / www. s om e r v i l l e m a . g o v / d e p a r t m e n t s /u n i o n - s q u a r e - p l a n n i n g

March 5, 2019



THE ALLEN STREET BUFFER



Allen Street Neighborhood



Version 3 Version 4?

Allen Street Neighborhood Union East Overlay



Allen Street Neighborhood



Why the Alley?

city of somerville union square presentation.pdfmayor joseph a curtatone office of strategic...

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