Somerville, Union Square Developer Enter $112M Deal

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The City of Somerville and Union Square master developer Union Square Station Associates (US2) have entered a deal that the city says will lead to an estimated $112 million in community benefits and $445 million in real estate tax revenue over the next three decades. 

Under the deal, US2 must negotiate a community benefits agreement with a council of community members in response to advocate concerns. 

"To be clear, the City must still advance $94 million in infrastructure improvements for the Union Square development to proceed and $64 million of that amount is needed for long overdue area water and sewer upgrades that must be carried out whether Union is developed or not," Mayor Joseph Curtatone said in a statement. "However, we are confident that the estimated $557 million in combined contributions, payments, and projected tax revenues from this project will more than offset our investment."

The deal is contingent on the Board of Alderman approving the draft Union Square zoning. If it is approved by May 31, US2 will then be required to provide $19.2 million, totaling an estimated $112 million in community benefits through zoning, payments and fees and the agreement with the city. 

Here's how that breaks down.

According to a spokesperson for the City of Somerville, $55.6 million will go toward affordable housing creation; $20.5 million will be generated from building permit fees and future phase contributions; $13 million will go toward environmental sustainability practices; $5.5 million will support the Green Line Extension; and close to $7.7 million will be allotted for infrastructure contributions, such as water and sewer upgrades and the redesign of Union Square Plaza. 

US2's $5.5 million contribution to the Green Line Extension equates to over one-fifth of developer contributions the city is seeking from developers near planned T stops to recoup at least $25 million of the $50 million Somerville was required to contribute to the project. 

About $5 million will benefit open space creation and $1.7 will go toward jobs programs to help prepare residents for new employment opportunities in the neighborhood. 

A neighborhood council in Union Square will negotiate additional community benefits and advise on funding priorities for the neighborhood. The proposed zoning requires that 5 percent of commercial space be set aside for arts and maker spaces.

Beyond the $112 million, US2 will also pay about $9.3 million to purchase land from the Somerville Redevelopment Authority.

The agreement includes two additional provisions – US2 must add 66 percent more open space than originally filed in the 2016 zoning draft and 70 percent of that space must be high quality parks, playgrounds and plaza. Commercial tenants will be required to give hiring preference first to qualified residents and then qualified veterans before considering other applicants. 

"The power of idealism in our community cannot be overstated. Across the country, communities are struggling with gentrification, transit needs, environmental challenges, and crumbling infrastructure," Curtatone said in a statement. "So here in Somerville, rather than simply watching as developers pick off random lots to build luxury condos, we set a higher bar. We demanded a master plan. We envisioned a vibrant new section of the neighborhood with a range of businesses and civic space."

The Novus Group