The state’s Department of Housing and Economic Development has turned down Gloucester’s request for a $5 million grant to upgrade pipes and other infrastructure beneath the historic Fort neighborhood.
Now, deciding just who will pay for the repairs — with engineering already underway, and connected with, but not dependent upon, the development of the proposed Beauport Gloucester hotel — is back on the drawing board this week.
In September, the city filed an application for a $5 million grant through the state’s MassWorks infrastructure program.
The money would have gone toward new water, sewer, and drainage systems underneath Fort Point. But Gov. Deval Patrick’s office announced the grant awards last Friday, and Gloucester didn’t make the cut.
While the project probably won’t receive state funding, city officials say the work still needs to be done.
The city is about six weeks into the design and engineering, while Beauport Gloucester LLC, gave the city $600,000 to fund the preliminary work.
City officials Tuesday were still holding out for some state money from the program, saying that not all of the anticipated money had been allocated. But a state spokesman said that the Friday grant announcements were final.
Mayor Carolyn Kirk, meanwhile, said the city cannot fund the full project. Beauport Gloucester LLC, the developer whose hotel proposal pushed the city to apply for the grant, will have to contribute additionally in some way, Kirk said.
“It’s going to go back to the drawing board,” Kirk said, “There is going to have to be some sort of shared cost, I don’t know what that looks like.”
Kirk said the city has traditionally used Tax Increment Financing — or so-called TIF — agreements, like the one granted in 2008 to Sam Park and his Gloucester Crossing project, to get developers to pick of some of the tab for infrastructure improvements. She said a TIF is an option, but added that she hasn’t made up her mind about how to proceed yet.