Gloucester Crossing development partners and a dual-branch government committee have agreed to seek City Council approval to put final financial and tax negotiations for the project on a fast track.
At the same time, the development team also asserted it would attempt to obtain construction financing locally.
The commitment was made by attorney James McKenna, representing DeMoulas Supermarkets and Sam Park & Co., in response to a request by City Councilor Jason Grow. Grow serves on the tax increment financing — or TIF — committee that is attempting to conclude tax negotiations with Sam Park and his investment and development partner, DeMoulas.
At its meeting tomorrow, the council could approve the expedited process that allow simultaneous public hearings on the two final pieces of a financing arrangement for a retail project that has evolved radically into a unique form — with DeMoulas Supermarkets as the prime tenant and lead lender in the shopping center.
Opponents of the project objected at a City Hall meeting Friday. Jaimie O'Hara said he worried that fast-tracking would not allow "time for the public to vent."
In the works for three years, the project was fully permitted by the council a year ago. Since then, as the economy weakened, Park has modified the initial business plan, finding private financing from DeMoulas as well as the anchor tenant in the place of a department store.
In addition to DeMoulas, Marshall's and Staples retail stores are already signed to leases at the Gloucester Crossing site, off the Route 128 extension just above Blackburn Circle.
DeMoulas has signed on to lend Sam Park & Co. $10.2 in construction loans, used to prepared the site, and will also spend a projected $10.5 million to build and operate Gloucester Crossing's anchor store, a 57,000-square-foot Market Basket supermarket, on a longtime lease. DeMoulas' officials said Friday that the market, 63rd in the Tewksbury-based chain, would add 45 jobs over the first two years of operation, including 15 management positions.
Sam Park, which acquired the 30-acre site two years ago for just more than $3 million, has projected spending as much as $60 million on what would be the city's most expensive and largest commercial development, and its biggest shopping center.
To qualify the partners for tax benefits, the city and state must agree to declare the location a economic opportunity area.
The expedited process would allow simultaneous hearings on the application for the EOA and TIF that Park announced early in his efforts in Gloucester was a project essential. With the creation of the EOA, DeMoulas would qualify for a 5-percent investment tax credit from the state, worth an estimated $500,000 to the company.
Sam Park has submitted to the TIF Committee a 20-year TIF concept that fit with Mayor Carolyn Kirk's proposal to engineer the tax benefits in an increasing, rather than decreasing progression. That is the opposite of typical TIFs, and means that Park would get a small tax break in the first years of the project, but a larger break in the years that followed. Kirk is seeking that format because she says the city has extensive short-term revenue needs.
"We want to string out dollar relief as long as we can," James Duggan, the mayor's administrative assistant and budget director, told Friday's meeting of the TIF Committee, which is made up of administration officials, council member Grow, and auditor and council employee Marcia McInnis.
Representatives for Park and DeMoulas joined the meeting, but formal negotiations over the TIF itself have not begun — and won't until the council authorizes the process to go forward.
Park has estimated the entirety of Gloucester Crossing, more than 20 stores, a year-round hotel and an assisted living facility, would add about 200 full-time jobs to the local economy.
Richard Gaines can be reached at rgaines@gloucestertimes.com
