He has state, US funds waiting
Mass. aide seeks ready developers
As the top economic official in Massachusetts government, Gregory Bialecki is responsible for giving away hundreds of millions of dollars to revive the state’s troubled economy. There’s just one problem: He can’t find enough good candidates for the money.
By his own admission, Bialecki is selective. He looks to create jobs by funding public works projects that jump-start private developments, such as building water connections for a proposed shopping complex or an access road into an office park.
But even with stimulus funds, most developers can’t get private loans to begin construction, as the worst slump to hit the commercial real estate market in decades continues without respite. That leaves him with few worthy recipients of the money.
“At first, people say, ‘Oh, I’m interested. I’m interested.’ But then it turns out they’re not ready to build anything,’’ said Bialecki, Governor Deval Patrick’s Secretary of Housing and Economic Development. “There are too few projects where I can go to the governor and say, ‘If we build this infrastructure, we will see private development occurring.’ ’’
The quandary is but one of many frustrations for Bialecki, a career real estate lawyer serving in government for the first time. Usually public officials who give out money are popular. But in Massachusetts, Bialecki, 49, is battling a political culture hostile to subsidizing private development while also suffering the jealousies of those who didn’t get money from him.
He routinely gets calls and e-mails from people who say they have better ideas for the stimulus money, or who question how he can be so sure the state’s investments will lead to private building.
So far, it’s been difficult to show results. Bialecki’s office has allocated about $200 million in federal and state money to a half-dozen private developments, but many of those are delayed or proceeding slowly because of sagging demand for new stores, offices, and homes.
At one of the largest developments, Assembly on the Mystic in Somerville, laborers are building an access road into the 66-acre site with $65 million in state and federal funds that Bialecki released. But there is no start date for construction of an Ikea furniture store and other buildings planned for the complex.
Altogether, the state has received $437 million in stimulus money for road-related projects, and has earmarked all of it before a federal March 1 deadline. Bialecki said he would have liked to use more of that money to help private development, but could not find others that would be ready to launch soon.
Despite these frustrations, Bialecki plods ahead. From the 21st floor of an office tower on Beacon Hill, he and a handful of aides rifle through development proposals in search of projects where state assistance will result in construction. Over the months, they have considered hundreds of proposals, ruling out all but a handful of large developments. The selected ones get not only federal funds, but additional money from state programs that Bialecki’s office oversees.
But of the projects blessed with this money, only one, Westwood Station along routes 95 and 128, has made a firm pledge to begin construction in the near future. In exchange for getting around $55 million in state aid for access roads, Westwood Station’s developers promised to start building the first 400,000 square feet of the massive residential and commercial complex this year.
In the other cases, though the government-funded work has already begun, or soon will, the private builders either have no clear prospects of starting construction soon, or they still have so much pre-construction work to finish that it could be years before their projects are underway.
They include: the Waterfront Square apartment, hotel, and office complex in Revere, where the developer still doesn’t have all the necessary land under control; SouthField, a proposed mini-city at the former South Weymouth Naval Air Station, where the master developer wants to begin work this spring but has yet to receive final permitting that would allow it to hire a building team; and a $1.5 billion redevelopment of downtown Quincy that is only at the beginning of a lengthy permitting process. Even the Assembly on the Mystic project still doesn’t have all its necessary permits.
That has left some questioning the wisdom of Bialecki’s approach.
“I get that we want to leverage private investment, but people need jobs now, not five years from now,’’ said State Representative Brad Jones, the Republican leader of the Massachusetts House.
Bialecki sometimes is so committed to the policy that he seems taken aback when his decisions create controversy. For example, the Patrick administration floated plans to use $9 million in stimulus funds to build a footbridge over Route 1 in Foxborough that would connect the Patriot Place complex owned by billionaire Robert Kraft with an undeveloped parcel he owns on the other side of the highway. After enduring days of withering criticism, the administration ultimately opted to withhold the funding, for now at least.
Even some Democrats who back his development policies feel Bialecki overreached in this case.
“I know that area, and I’m not so sure an overpass is necessary,’’ said State Senator Karen Spilka, a Framingham Democrat and cochair of the Legislature’s economic development committee. She acknowledged some discomfort with the public appearance of the award, but said the administration is generally following the right course: “That I differ with them on that project doesn’t negate my support for their overall strategy,’’ Spilka said.
Despite the setback - for now - Bialecki is not contrite about supporting the Kraft footbridge.
“If you described what we were doing - and you didn’t use the word Foxborough, Patriots, or Krafts - I think most people would say it’s a good deal,’’ he said, arguing Kraft’s project could result in more than $800 million in development at the empty parcel.
“Something we simply disagree with is this logic that says, ‘If the developer has a net worth of a billion dollars, then they should just do it themselves’,’’ Bialecki said. “The relevant question here really isn’t what someone can afford to do. The question is, ‘If we pay for the public infrastructure, are we more likely to see private sector activity and job creation faster?’ And if the answer is yes, then we think it’s a good investment.’’
Casey Ross can be reached at firstname.lastname@example.org.