MASSACHUSETTS ECONOMIC DEVELOPMENT INCENTIVE PROGRAM FISCAL YEAR 2009 Director's Annual Report Economic Assistance Coordinating Council MR 331 .016M3 ASS FY2009 COMMONWEALTH OF MASSACHUSETTS ECONOMIC ASSISTANCE COORDINATING COUNCIL t ' ·. ii I MASSACHUSETTS OFFICE OF BUSINESS DEVELOPMENT 100 CAMBRIDGE STREET - SUITE 1010 BOSTON, MA 02114 TELEPHONE: 617-788-3638 l~u·~ - l' : FAX: 617-788-3695 www.mass.gov/eohed MICHAEL HUNTER DEVALL. PATRICK UNDERSECRETARY OF BUSINESS GOVERNOR DEVELOPMENT, CO-CHAIR TINA BROOKS TIMOTHY P. MURRAY UN DERSECRETARY OF HOUSING AND LIEUTENANT GOVERNOR COMMUNllY DEVELOPMENT, CO­ CHAIR CLAIRE M. O'NEILL DIRECTOR In accordance with Section 3C(3) of Chapter 23A of the Massachusetts General Laws, here within is the Annual Report for the Economic Assistance Coordinating Council (EACC) and the Economic Development Incentive Program (EDIP) for Fiscal Year (FY) 2009, ending June 30, 2009. The FY 2009 EACC Annual Report for EDIP reflects the operations of the program as well as the accomplishments of approved Certified Projects throughout the Commonwealth. This report also includes a compilation of data for EDIP since inception (FY 1995) through FY 2009. EACC and EDIP History As a result of the economic slow down of the late 1980's and early 1990's, the Commonwealth enacted Chapter 19 of the Acts of 1993, inaugurating both the EACC and EDIP. The EACC is a 14 member board, consisting of 7 ex-officio members and 7 Governor appointed members, originally established to administer EDIP. The program has become one of the Commonwealth's most utilized economic development tools. FY 2009 marked the program's sixteenth year since being established. EDIP's primary purpose is to promote overall economic development readiness within the Commonwealth's Economic Target Areas (ETAs). Through its accessibility and flexibility, EDIP has maintained being locally driven over the years. As a result, municipalities have a mechanism to stimulate and foster economic development in locally designated areas known as Economic Opportunity Areas (EOAs). By attracting new businesses and existing businesses to relocate or expand, participating municipalities have seen the positive results of the program. State Library of Massachusetts State House, Boston Through EDIP and its application process, ETA communities, in partnership with the Commonwealth, participate in an economic development planning process. Planning at the municipal level includes identifying goals, strategies and priorities, collaborating with neighboring communities and the private sector, ·as well as streamlining regulations. The Massachusetts Office of Business Development (MOBD) reaches out to both municipalities and businesses to assist in the economic development process. EDIP Impact The participating business is known as the Certified Project applicant. In reviewing an application for a Certified Project, which is jointly filed by the municipality and the business applicant, the EACC focuses on three key considerations: projected jobs created, jobs retained, and private investment. During FY 2009, the EACC approved 68 Certified Projects. In total, these 68 Certified Projects projected to create 2,795 jobs, retain 10,207 jobs, and invest $1,343,412,204 at the 68 Certified Project facilities dispersed throughout the nine regions across the Commonwealth. Below is a breakdown of projects the EACC has approved since the inception of the EDIP Program: • 1,337 Projects Approved • 72,504 Projected Jobs Created • 128,246 Estimated Jobs Retained • $21,431,269,302 Projected Private Investment Expanding EACC Responsibilities In addition to overseeing EDIP, the EACC's powers and duties have grown accordingly with the economic needs of the Commonwealth: • In 1998, the EACC was assigned the responsibility of designating the Commonwealth's Economically Distressed Areas (EDAs) under the Brownfields Act _of 1998. Annually, on March 1, the EACC submits an updated list of EDAs to the Attorney General's Office, the Department of Environmental Protection, and the Office of Brownfields Revitalization (Mass Development). • In 2002, the EACC was also given the responsibility to review and act on applications received from the cities of Lowell and Lawrence under the federally legislated Renewal Communities Prog"ram monitored by the United States Department of Housing and Urban Development (HUD). According to the legislation, this program is available to Lowell and Lawrence through calendar year 2009. • In 2003, legislation was passed through Massachusetts General Law Chapter 40Q, enabling municipalities to use District Improvement Financing (DIF). As a part of this program, the EACC is responsible to implement, administer, and oversee the DIF program. This includes reviewing and approving all DIF applications. Unlike EDIP, DIF encompasses all 351 municipalities in the Commonwealth. To date the EACC has approved three DIF applications: Quincy, Worcester, and Springfield. • The EACC is responsible for monitoring the number of Economic Target Areas that can be designated per Massachusetts General Law (ETA cap). In 2006, the · Massachusetts General Law, Chapter 23a, Section 3e was amended to raise the ETA cap from 20 to 40. This cap of 40 affects the qualifying ETA criteria for Chapter 23a, Section 3d a(i), (ii) A - H, however, the cap is not impacted by ETAs established through sub-clause I or J of Section 3d. • Beginning with FY 2006, the EACC and EDIP ate responsible for monitoring and reviewing Certified Projects' job creation compliance per a June 24, 2006 amendment to Massachusetts General Law Chapter 63, Section 38N. Additionally. the EACC and EDIP are tasked with decertifying any previously approved EACC Certified Projects that have not 11 reasonably satisfied" or have a "reasonable chance" of satisfying the job creation commitments outlined in their EACC approved EDIP Certified Project application. EACC Enhanceme.nts in FY 2009 The EACC continues to work in conjunction with the Massachusetts Office of Business Development (MOBD) to implement and improve the various programs under the EACC's purview. 1. Achieved 100% Compliance with EDIP Reporting Requirements by Decertifying Projects that failed to file their annual reporting forms. Utilizing regulations promulgated by 402 CMR 2.13(3), the EACC achieved 100% filing compliance of EDIP Annual Reporting forms for FY 2007. Continuing with the new mandate, during the Fall 2009, the EACC will consider the revocation of EDIP Certified Project status for those projects that failed to provide their annual reporting form for FY 2008. 2. Provided the Department of Revenue with a complete list of projects eligible for recertification. Per request by the Department of Revenue (DOR), the EACC completed and forwarded to the DOR an extensive spreadsheet of all active Certified Projects that provided their FY 2008 EDIP Annual Reporting form to the EACC. The spreadsheet included the business applicant's Federal Employer Identification Number (FEIN), address, private investment, 5% EOA ITC claimed, and local exemption from the municipality. On an annual basis, at the close of each fiscal year, this spreadsheet will be provided to DOR for their review. 3. Conducted a EACC Policy Meeting to discuss current EACC policy and determine future potential policies. In August 2008, the EACC Board met to review existing board policies as well as brainstorm and discuss future policies for the EDIP program. 4. Worked to produce an online application system for EDIP. During FY 2009, the EDIP Senior Project Manager worked with the selected vendor to develop the MOBD/EDIP Online Application System. This system electronically captures all information currently kept in hard copy form and allows for easier tracking and reporting. Pilot use of the site was initiated during FY 2009. Staff also initiatied the archival of data for 216 Economic Target Area communities, more than 750 Economic Opportunity Areas and more than 700 active Certified Projects. It is anticipated that the online site will be used for FY 2009 Annual Reporting by existing Certified Projects and will be phased in for use by municipalities, businesses, and MOBD staff during FY 2010. 5. Sent a press release following each EACC meeting. Beginning in the Spring of 2008, following each EACC meeting, the EDIP Senior Project Manager worked with the Exe.cutive Office of Housing and Economic Development's Deputy Director of Communications to send out a press release announcing the a·pproved applications. 6. Continued implementation and review of the District Improvement Financing Program (DIF) The EACC will continue to review and approve DIF applications. For information on . the DIF program, please contact Nayenday Thurman, MOBD Economic Development Programs Director. EACC Outlook for FY 2010 Going forward, EACC initiatives for ·FY 201 O include the following: • In conjunction with MOBD and the Department of Business Development, continue to explore and determine potential legislative enhancements for EDIP. • Continue the implementation of the District Improvement Financing Program (DIF). • Provide outreach, training, and guidance to municipal practitioners and businesses for EDIP and to municipal practitioners for DIF. • Launch the MOBD/EDIP Online Application System and provide appropriate training to stakeholders. • Continue with the effort to fill the vacancy voids on the current EACC Board. • Develop a guidebook to include previously approved EACC policies as well as the specific Massachusetts General Laws