SalemNews.com, Salem, MA

April 28, 2014

Funding sought for Gateway cities

Proposal designed to stimulate growth in Salem, Peabody, but advocates say it's not enough

By Christian M. Wade
Statehouse reporter

---- — BOSTON — Gov. Deval Patrick is pitching a new economic development proposal that he says would boost investment in the state’s older, financially strapped Gateway cities, but observers say the plan’s funding falls short of expectations.

With only months left in office, Patrick has proposed a multi-year, $100 million economic plan that focuses attention on the state’s economically challenged cities by providing more money for large-scale redevelopment projects, market-rate housing and cleaning up old manufacturing sites.

Regional economic officials said they are encouraged by the governor’s proposal but said the funding levels for so-called Gateway cities like Salem, Peabody, Lawrence and Haverhill are lackluster. They hope state lawmakers will pump more money into Patrick’s development plan.

“The elements of the governor’s package are positive, but the funding levels are anemic,” said David Tibbetts, president of the Merrimack Valley Economic Development Council. “I hope that the House and Senate give careful consideration to what the governor has proposed, especially for the Gateway cities programs, but are more generous with the funding levels.”

Patrick’s proposal would create a new $11 million fund for major redevelopment projects specifically in the Gateway cities, to be overseen by MassDevelopment, the state’s finance and development agency. The governor’s proposal also would boost funds for MassDevelopment’s Housing Development Incentive Program from $5 million to $10 million.

“At these levels we might have sufficient funding to plan for compelling transformative projects, but we could never build them,” said Ben Forman, executive director of MassINC’s Gateway Cities Innovation Institute, an independent think tank.

MassINC has called for a state infusion of more than $1.7 billion over the next decade to stimulate growth in the state’s 26 Gateway cities. A recent study by the group suggested the funding would create $3.4 billion in new development and create about 80,000 jobs.

“The longer we put off these critical investments, the longer regional economies outside of Greater Boston will sputter,” Forman said. “And without these economies contributing sustainably to the state’s coffers, we will continue to face structural imbalances.”

Legislation sponsored by Sen. Ben Downing, D-Pittsfield, and Rep. Antonio Cabral, D-New Bedford, seeks more than $125 million for the new redevelopment fund and would expand state incentive programs and tax credits for large-scale redevelopment projects in the Gateway cities.

Democratic House Speaker Robert DeLeo also is working on an economic development plan that could be introduced before the end of the legislative session this summer.

Patrick’s plan, which would be paid for through a combination of capital budget and general fund expenditures, also seeks to boost training to help students and workers get jobs in advanced manufacturing and IT and provide more grants to high-tech firms to hire interns. Industry officials say the move would help promote growth in the budding life sciences cluster on the North Shore.

“There is a huge demand for skilled workers with hands-on experience,” said Martha Farmer, CEO of North Shore Innoventures, an incubator for about 45 life sciences firms and bio-tech companies at Cummings Center in Beverly. “And the schools are really eager to place their students in internships because that is obviously the path to a job.”

Farmer said she hopes lawmakers would put funding for bio-tech incubators into Patrick’s economic proposal. She said the governor’s $1 billion bond bill — which provided more than $100 million a year for life sciences startups — in 2007 was a major boost to the North Shore bio-tech cluster.

“The impact of that bill was massive,” she said. “It attracted private investment and grants three times that amount.”

William Howard, director of the North Shore Alliance for Economic Development, said he is encouraged by the governor’s calls for the creation of a “middle skills” job training grant fund for careers in advanced manufacturing and information technology. He said schools like the soon-to-open Essex Technical High School district in Danvers would benefit from the new program.

“Everybody recognizes there is a huge void in the middle-skilled sector of the economy — lab technicians and imaging specialists — that employers in our region are looking for,” he said.

Funding would also be set aside in the bill for the state’s Brownfields Redevelopment Fund, which cities like Lawrence and Salem have used to redevelop old industrial and manufacturing sites that have become polluted.

One of the more controversial aspects of Patrick’s proposal is the “Global Entrepreneur in Residence Program,” which would allow high skilled international students currently in Massachusetts to stay here after graduation if they are starting a new business.

The program, which would be administered by the Massachusetts Technology Collaborative, would place selected students who are eligible for H-1B visas but unable to get one due to a federal cap as “entrepreneurs in residence” at public and private institutions.

The governor says he also wants to eliminate non-competition agreements and adopt the Uniform Trade Secrets Act “to promote innovation, job creation and the growth of companies to scale.” That provision is expected to get pushback from high-tech firms that use non-compete contracts to retain employees.

Haverhill Mayor James Fiorentini said he welcomes Patrick’s proposal but also wants more direct investment by the state in cash-strapped cities.

“We are thrilled at the attention being paid to Gateway cities like Haverhill because traditionally all the funding has gone to Boston,” he said. “But we could always use more money.”

Christian M. Wade covers the Massachusetts Statehouse for The Salem News. He can be reached at cwade@cnhi.com.

What are Gateway cities?

The term Gateway cities was coined in a 2007 MassINC-Brookings Institution report that initially labeled 11 mid-sized urban centers across the state that are struggling regional economic centers. In 2009, the state Legislature officially defined Gateway cities as those with a population greater than 35,000 but less than 250,000 and a median household income, per capita income and educational levels that are below the statewide average.

Here’s the list:

Attleboro

Barnstable

Chelsea

Chicopee

Everett

Leominster

Lynn

Malden

Methuen

Peabody

Quincy

Revere

Salem

Taunton

Westfield

Brockton

Fall River

Fitchburg

Haverhill

Holyoke

Lawrence

Lowell

New Bedford

Pittsfield

Springfield

Worcester