The Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
Overview of Potential Funding
and Financing Sources
Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
TABLE OF CONTENTS
6.0
Introduction ................................................................................................................................... 1
6.1
Federal Programs ......................................................................................................................... 2
6.2
6.3
6.1.1
FEMA/Homeland Security: Port Security Grant Program (PSGP) .................................. 2
6.1.2
Army Corps of Engineers Harbor Dredging (Water Resources Development Act) ......... 3
6.1.3
MARAD Small Shipyard Program .................................................................................... 4
6.1.4
Department of Commerce Marine-Related Programs ..................................................... 5
6.1.5
U.S. DOT Ferry Programs ............................................................................................... 8
6.1.6
Federal Highway Administration Grant Programs under MAP-21 ................................. 10
6.1.7
Transportation Investment Generating Economic Recovery (TIGER) Grants .............. 13
6.1.8
Department of Transportation Financing Programs under MAP-21 .............................. 14
6.1.9
Environmental Protection Agency Clean Diesel Programs ........................................... 17
State and Local Programs .......................................................................................................... 17
6.2.1
The Seaport Bond Bill and Seaport Advisory Council ................................................... 18
6.2.2
Massport Capital Program ............................................................................................. 20
6.2.3
MassDOT Highway, Bridge, and Freight Rail Programs ............................................... 22
6.2.4
MassWorks Grants ........................................................................................................ 24
6.2.5
Massachusetts Clean Energy Center (MCEC) .............................................................. 25
6.2.6
Financing Local Infrastructure: DIF, LIDP, and I-Cubed................................................ 26
6.2.7
Financing for Businesses: MassDevelopment ............................................................... 28
Summary..................................................................................................................................... 29
LIST OF TABLES
Table 1:
Department of Commerce Marine-Related Programs .............................................................. 6
Table 2:
Estimated “Target” and Total FHWA Funding for FY13-17 ($millions) ................................... 13
Table 3:
TIGER Awards for Port-Related Projects ................................................................................ 14
Table 4:
Representative Seaport Bond Grants in the Port Compact Cities .......................................... 20
Table 5:
Summary, Massport Five-Year Capital Program .................................................................... 22
Table 6:
Estimated Highway/Bridge Funding for FY13-17 ($millions) .................................................. 23
Table 7:
Recent or Programmed Highway Projects in the Five Port Areas .......................................... 24
November 8, 2013 Revised Draft
ii
Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
Overview of Potential Funding
and Financing Sources
6.0
Introduction
This Technical Memorandum provides an overview of potential funding and financing programs that may
be used to support needed investments in the five ports of the Massachusetts Ports Compact. The first
section covers federal programs, and the second covers state and local programs.
Within each of the sections, the discussion is organized to help the reader understand three distinctions:
•
Between programs targeted largely or entirely to port or maritime activities, on the one hand, and
those of much broader scope and scale that have important applicability to ports and their
landside networks, on the other. The latter category includes the federal and state surface
transportation apparatus, and the two Metropolitan Transportation Organizations in whose
jurisdictions the five ports are located.
•
Between funding programs, which generally consist of capital grants or direct expenditure by the
funding agency, and financing programs, in which the “funding” agency is not making a grant but
rather making a loan or in some other way facilitating the borrower’s access to credit on favorable
terms.
•
Between programs that support public infrastructure investments and those that support private
investment. While most of the programs are in fact related to infrastructure, there are
opportunities at both the federal and state levels to support business expansion directly with
grants or, more typically, credit financing.
This Memorandum does not provide a funding strategy, because the Ports Compact Strategic Plan
recommendations for investment in the five ports have not yet been developed. Rather, this
Memorandum provides the basis for such a strategy. As specific recommendations emerge, covering
infrastructure, business development and policy in the five ports, those recommendations will be linked to
potential funding and financing sources.
Revised November 8, 2013
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Ports of Massachusetts Strategic Plan
6.1
Technical Memorandum Number 6
Federal Programs
This section documents federal funding and financing programs and identifies those most likely to be
applicable for port projects and associated landside improvements in the five Port Compact cities. Each
program and its enabling legislation are briefly discussed, the funding levels are outlined, and the
programs are evaluated with respect to their status and applicability.
The programs are organized by agency, beginning with those principally aimed at port and port-related
activities:
•
Federal Emergency Management Agency: Port Security Grant Program (PSGP);
•
Army Corps of Engineers: Harbor Dredging (Water Resources Development Act);
•
Maritime Administration Small Shipyard Program;
•
Department of Commerce Marine-Related Programs; and,
•
Department of Transportation Ferry Programs.
The discussion then addresses the several programs in the US Department of Transportation that, while
not targeted for ports, are broadly applicable to their landside access networks. These are divided into
programs involving capital grants and those involving loans and other forms of financing assistance:
•
Department of Transportation Grant Programs (MAP-21)
•
National Highway Performance Program (NHPP)
•
Highway Safety Improvement Program (HSIP)
•
Surface Transportation Program (STP)
•
Congestion Mitigation and Air Quality Improvement Program (CMAQ)
•
Transportation Investment Generating Economic Recovery (TIGER)
•
Department of Transportation Financing Programs (MAP-21)
•
Transportation Infrastructure Finance and Innovation Act (TIFIA)
•
Railroad Rehabilitation & Improvement Financing (RRIF)
•
Tax-Exempt Financing of Highway Projects and Rail-Truck Transfer Facilities (Private Activity
Bonds)
The federal section concludes with the Environmental Protection Agency’s Clean Diesel programs, which
have potential applicability to ports.
6.1.1
FEMA/Homeland Security: Port Security Grant Program (PSGP)
The Program. PSGP provides funding for transportation infrastructure security activities to implement
Area Maritime Transportation Security Plans and facility security plans among port authorities, facility
operators, and state and local government agencies required to provide port security services. The PSGP
competitively awards grants to assist ports in obtaining the resources required to support the National
Preparedness Goal’s associated mission areas and core capabilities. The purpose of the FY 2013 PSGP
is to support:
Revised November 8, 2013
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Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
•
increased port-wide risk management;
•
enhanced domain awareness;
•
training and exercises;
•
expansion of port recovery and resiliency capabilities; and,
•
further capabilities to prevent, detect, respond to, and recover from attacks involving improvised
explosive devices (IEDs) and other non-conventional weapons.
With the FY 2013 program, port applicants have been sorted into two groups based on their assessed
risk. Eight port areas have been selected as Group I, having the highest assessed risk. All remaining
ports not identified as Group I are eligible to apply as Group II, or the “All Other Port Areas” Group. All
ports in Massachusetts are now classified as Group II. For FY 2013, Group I port areas are eligible for
60% of the available funds; while, Group II ports are eligible for the remaining 40% of available funds.
Funding Level. Total funding available in FY 2011 was $235.1 million; in FY 2012 it was $97.5 million;
the total funding available for FY 2013 is $93.2 million. In FY 2011, the average award to Group II port
areas was about $1.5 million, ranging from $1 million received by 21 Group II port areas to $3.5 million for
1
Chicago/Lake Michigan. In FY 2012, the average Group II award was about $1.39 million, with the
2
highest award--$6.3 million—going to Texas/Sabine-Neches River. Annual funding for this program is
determined as part of the US Department of Defense Appropriations process. The most recent funding
allocation is found in Department of Defense and Full-Year Continuing Appropriations Act, 2013 (Public
3
Law 113-6).
Status and Applicability. In addition to anti-terrorism, ports can seek funding for security issues related
to rising volumes of high-value cargo, exposure to hurricanes, and concerns about climate change. The
ports of Gloucester, Salem, Fall River, and New Bedford have all received funding, covering patrol boats,
surveillance cameras, TWIC card readers, communications equipment, and training. The Seaport
Advisory Council (see page 18) has coordinated these applications and provided the 25% non-federal
match of $980,536 to these awards, bringing the total funding allocated to port security to just under $4
4
million. The Boston port area received a $3.2 million allocation in FY12, of which $1.1 went to Massport
5
and $1.3 to the Massachusetts Environmental Police.
6.1.2
Army Corps of Engineers Harbor Dredging (Water Resources Development Act)
The Program. The Water Resources Development Act (WRDA) of 2013 (S. 601), a multi-year
reauthorization bill, was passed by the US Senate in May 2013, but is still awaiting approval of the House
of Representatives. The bill would reauthorize the nation’s critical water resource infrastructure programs
and authorize the Army Corps of Engineers to construct water projects that are of federal interest such as
mitigating storm damage, restoring ecosystems, and reducing erosion on inland and intracoastal
waterways.
1
Port Security Grant Program – Risk Model, Grant Management, and Effectiveness Measures Could Be Strengthened, GAO-12-47,
November 2011, http://gao.gov/assets/590/587142.pdf
2
Based on FY 2012 PSGP Allocations data, FEMA – Grant Programs Directorate Information Bulletin No. 387, June 2012
3
http://www.fema.gov/fy-2013-port-security-grant-program-psgp-0.
4
http://www.mass.gov/governor/administration/councilscabinetsandcommissions/seaport/portsecurity/.
5
Based on FY 2012 PSGP Allocations data, FEMA – Grant Programs Directorate Information Bulletin No. 387, June 2012
Revised November 8, 2013
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Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
The portion of WRDA most applicable to ports is the dredging title: Title VIII, the Harbor Maintenance
6
Trust Fund Act reauthorization. The Trust Fund is capitalized by a Harbor Maintenance Tax (HMT),
originally enacted by Congress in 1986 to recover a portion of the cost of maintaining the nation’s deepdraft navigation channels. Title VIII, as passed by the Senate, would cover both channel maintenance
(dredging channels impacted by silting to their federally authorized dimensions) and channel deepening,
and would direct that the balances in the Trust Fund, which have been allowed to accumulate as part of
7
the overall federal budget calculus, be appropriated for use on projects. The bill revises the complex
determination of the non-federal share of maintenance and deepening projects, changing the threshold
8
for higher local funding shares from 45 feet to 50 feet. The bill also streamlines the project selection
process.
Funding Levels. The funding level in any given year will be determined through the appropriations
process. However, the authorizing language in the Senate bill states that the funding available in each
fiscal year would be at least the level of receipts plus interest credited to the Harbor Maintenance Trust
Fund for that fiscal year.
Status and Applicability. The reauthorization of WRDA, and specifically of the Harbor Maintenance
Trust Fund, is of critical interest to the Port of Boston. This program is the federal source for ongoing
harbor maintenance dredging, and would be the federal source of the new Boston Harbor Deep Draft
Navigation Improvement Project, for which Massport is currently completing the MEPA/NEPA process.
Massport estimates a total project cost of approximately $300 million, with a non-federal share of
approximately $130 million. (See the related discussion on page 22.) While dredging projects in other
ports are eligible, project selection is based on a cost-benefit analysis conducted by the Corps of
Engineers, and projects with minimal benefits to shipping are not competitive.
6.1.3
MARAD Small Shipyard Program
The Program. The Small Shipyard Program funds capital and related improvement projects designed to
foster efficiency, competitive operations, and quality ship construction, repair, and reconfiguration. Grant
funds may also be used for training projects to foster employee technical skills and operational
productivity in communities whose economies are related to or dependent on the maritime industry.
Eligible applicants must be the operating company of the shipyard facility. The shipyard facility must
construct, repair, or reconfigure vessels 40 feet in length or greater for commercial or government use.
The shipyard facility for which a grant is sought must be in a single geographical location, located in or
near a maritime community, and may not have more than 1,200 production employees. For capital
9
improvement projects, all funding items must be new and owned by the applicant.
The grant process is highly competitive. MARAD evaluates capital improvement applications on the
extent to which the project would enhance efficiency and competitiveness in ship construction, repair, and
reconfiguration, training applications the extent to which the project would enhance employee skills and
productivity. The economic circumstances and conditions of the surrounding community are also
6
S. 601 - Water Resources Development Act of 2013, recorded May 15, 2013. For a summary of the bill, see:
http://beta.congress.gov/bill/113th/senate-bill/601
7
http://ramphmtf.org/.
8
For a discussion of the cost-sharing issue, see http://aapa.files.cms-plus.com/PDFs/CostSharing%20of%20Federal%20Channels%202010.pdf.
9
http://www.marad.dot.gov/ships_shipping_landing_page/small_shipyard_grants/small_shipyard_grants.htm.
Revised November 8, 2013
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Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
evaluated. Projects requiring additional environmental assessments (such as those including complex
10
waterside improvements) are not considered for funding.
Funding Levels. In FY2013, $9.46 million was awarded to help improve 12 shipyards in 10 states. For
11
this aggregate grant amount, MARAD received 113 applications requesting $96 million in assistance.
Status and Applicability. Shipyard facilities in a single geographical location, in or near a maritime
community and with no more than 1,200 production employees are eligible to apply for capital or training
projects. The shipyard facility must have the ability to construct, repair, or reconfigure vessels of length 40
feet or greater. Massachusetts did not receive any awards for FY 2013; however, Duclos Corporation
DBA Gladding-Hearn Shipbuilding in Somerset has received a total of $1.6 million in Small Shipyard
Grants in three awards since 2008. The grants were used to help fund shipyard infrastructure upgrades in
2012; lifts, skylights, lighting upgrades, overhead cranes, and two 22-ton cranes in 2009, and railway
assembly, railway capacity expansion and dock extension in 2008.
6.1.4
Department of Commerce Marine-Related Programs
Table 1 summarizes current funding programs offered by the Department of Commerce which are
principally or potentially applicable to marine and port projects.
These programs fall in three areas:
10
11
•
Coastal Zone Management: In addition to supporting the on-going management of the state’s
Coastal Zone Management (CZM) program, the Department’s National Oceanographic and
Atmospheric Administration (NOAA) offers a number of specialized funding programs of potential
relevance to the Compact Ports.
•
Fisheries: The Northeast Region of NOAA’s National Marine Fisheries Service (NMFS) is based
in Gloucester. In addition to their highly visible role in regulating commercial fishing, NMFS offers
several funding programs, including vessel financing and the Saltonstall-Kennedy Grant program.
•
The Economic Development Administration’s programs for local and regional development, for
which Fall River and New Bedford are presently eligible.
Ibid.
http://www.marinelink.com/news/announces-shipyard356916.asp.
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Ports of Massachusetts Strategic Plan
Table 1:
Technical Memorandum Number 6
Department of Commerce Marine-Related Programs
Who is
Eligible
Funding Program
Award
Range
Eligibility Criteria
Total
Awards
Coastal Zone Management
CZM Administration
Any Coastal
State
Implement/enhance Coastal
Zone Management programs
Unspecified
$66 M (est. for
FY14)
Coastal Resource
Improvement Program
Any Coastal
State
Grants may be used to acquire
land; small construction
projects, including but not
limited to, paths, walkways,
fences, parks, historic
rehabilitation; pier rehabilitation
or acquisition; shoreline
stabilization; pilings
removal/replacement;
engineering; educational,
interpretive, or management
costs.
Up to half of
state’s CZM
Admin. funds
(see above)
Unspecified
CZM Enhancement
Grant Program
Any Coastal
State
Develop a Section 309
Assessment and Strategy
$75K-$200K
Unspecified
Coastal & Marine
Habitat Restoration
Project Grants
Various public
and private
entities.
Habitat restoration with work on
target species with a nexus to
NOAA management.
$100K-$10M
10 awards in
FY13 (approx.
$20M over 3
yrs)
National Marine Fisheries Service
SaltonstallKennedy
U.S. citizens/
nationals;
representatives
of U.S. entities;
U.S. territories
Projects related to US
commercial and recreational
fisheries. Fisheries research
and development projects
including, but not limited to,
harvesting, processing,
marketing, associated business
infrastructures.
$30K-$400K
$5M to $10M
in FY 13
Fisheries Finance
Program
Fishermen,
growers,
processors or
distributors
Construction/reconstruction of
fishing and aquaculture
facilities/ vessels; maximum
loan 25 years
n/a
n/a
Capital Construction
Fund
U.S. fishermen,
fishing
companies
Vessel rehabilitation or
replacement
n/a
n/a
Region must meet EDA
economically distressed criteria.
Unspecified
$200 M
(approx. for
FY13)
Economic Development Administration
EDA Programs
Various public
and private
entities.
Source: Department of Commerce, NOAA, Office of Ocean and Coastal Resource Management; National Marine Fisheries Service;
Economic Development Administration. (“Award range” is per recipient; “total awards” includes the amount allocated or number to
all recipients.) 12
12
http://coastalmanagement.noaa.gov/about/welcome.html; http://www.nmfs.noaa.gov/; http://www.nero.noaa.gov/;
http://www.eda.gov/programs.htm; http://www.eda.gov/ffo.htm.
Revised November 8, 2013
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Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
Department of Commerce programs of potential relevance to the Compact Ports include the following:
6.1.4.1
Saltonstall Kennedy Grant Program (S-K)
The Program. This grant program provides funds or cooperative agreements to public and private
entities for fisheries research and development projects addressing aspects of US fisheries, including
harvesting, processing, marketing, and associated business infrastructures. The objective is to address
the needs of the fisheries and fishing communities in optimizing economic benefits within the context of
rebuilding and maintaining sustainable fisheries, and in dealing with the impacts of conservation and
management measures. Projects must address at least one of the following: aquaculture, optimum yield
of harvested resources under federal or state management, fisheries socioeconomics, conservation
engineering, ecosystem studies, or territorial science. The grants and cooperative agreements are made
on a competitive basis to assist in carrying out projects related to US commercial and recreational
13
fisheries. The term “fisheries” encompasses wild capture, marine aquaculture, and recreational fishing.
Funding Level. The grant program for FY13 has $5 to $10 million available to fund projects nationally.
The typical grant award range is expected to be from $30,000 to $250,000, with a maximum of
14
$400,000.
Status and Applicability. In several recent years, NOAA used appropriated Saltonstall-Kennedy funds to
supplement its operating budget. Grant awards are resuming in FY13, and the process is currently
underway. The program is particularly applicable to Gloucester and New Bedford, as entrenched fishing
ports with complex sustainability and management concerns. Gloucester has indicated a specific interest
as part of its New Maritime Economy strategy.
6.1.4.2
Vessel financing: NMFS Fisheries Finance and Capital Construction Fund Programs
The Programs. The Fisheries Finance Program (FFP) provides direct loans for the purchase of used
vessels or the reconstruction of vessels (limited to reconstructions that do not add to fishing capacity),
shore side facilities, or aquacultural facilities. This is also the program that provides buy-back financing (at
the request of a Fishery Management Council or Governor) to purchase and retire fishing permits or
fishing vessels in overcapitalized fisheries. The program makes direct loans for up to 80 percent of actual
15
cost, with a maximum maturity of up to 25 years.
The Capital Construction Fund (CCF) Program enables fishermen to construct, reconstruct, or under
limited circumstances, acquire fishing vessels with before-tax, rather than after-tax dollars by allowing
them to defer tax on income from the operation of their vessels. The amount accumulated by deferring tax
on fishing income, when used to help pay for a vessel project, is, in effect, an interest-free loan from the
Government. Any U.S. citizen who owns or leases a US-built fishing vessel of at least two net tons, and
has an acceptable program for constructing, reconstructing, or acquiring a fishing vessel of at least two
net tons, is eligible. The term "fishing vessel" includes vessels used commercially in the fisheries of the
U.S. for catching, transporting, and processing fish. Also included are commercial passenger-carrying
vessels used for fishing parties. Applications are accepted at any time. However, to be applicable to any
given tax year, a CCF agreement must be executed and entered on or before the due date (with
16
extensions) for filing your Federal tax return for that tax year.
13
http://www.nmfs.noaa.gov/mb/financial_services/skhome.htm.
14
NOAA Request for Applications, FY13 Saltonstall-Kennedy Grant Program.
15
https://www.cfda.gov/index?s=program&mode=form&tab=step1&id=37c280c1acf556c255dba16df4086eb8.
16
http://www.nmfs.noaa.gov/mb/financial_services/CCF%20forms/ccf_brochure.pdf (the program brochure and fact sheet).
Revised November 8, 2013
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Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
Funding Levels. These are not “funding programs” in which the federal government makes awards to
state or local governments or solicits applications on a scheduled basis. Rather, they are financing
mechanisms through which individual vessel owners may apply for assistance at any time. The FFP
program makes direct loans to qualifying applicants, and the CCF program provides individual applicants
with a tax deferral through the IRS code, similar to depreciation on an income property.
Funding Levels. These are open application programs, in which eligible individuals are the applicants.
There are no funding levels or award limits in the usual sense.
Status and Applicability. The programs are in place continually. Their value in a particular geographic
fishery or port, and the demand for their use, are driven by market and regulatory conditions.
6.1.4.3
Economic Development Assistance Programs (EDA)
The Program. The Economic Development Administration's investment policy is designed to establish a
foundation for sustainable job growth and the building of durable regional economies throughout the US,
through two key economic drivers: EDA encourages its partners around the country to develop initiatives
that advance new ideas and creative approaches to address rapidly evolving economic conditions.
Through its Public Works and Economic Adjustment Assistance programs, EDA solicits applications for
construction, non-construction, technical assistance, and revolving loan fund projects.
Funding Levels. In FY 2013, the Senate subcommittee bill approved a total of $200 million to be
dedicated to the programs in total. This was $20 million below the FY 2012 level and $19 million above
the President’s budget request. Further information on funding for upcoming fiscal years through this
program is unavailable at the time of this Memorandum.
Status and Applicability. The Public Works and Economic Adjustment Assistance programs have been
17
used for port projects in the past. Expansion projects for port and harbor facilities, as well as landside
connections to rail and trucking networks from the marine ports are eligible projects under the Public
Works program, while regional strategies to increase diversity in the economies and increase competition
are eligible under the Economic Adjustment Assistance program. Because Fall River, New Bedford, and
Bristol County as a whole all qualify as economically distressed for EDA purposes as a result of their
unemployment rates being more than 1.0 percentage point greater than the US unemployment rate for
the last 24 months (June 2011 through May 2013, at the time this Memorandum was prepared), these
18
areas are particularly well-suited for grants through the EDA.
The first grant cycle deadline of FY 2014
is September 13, 2013.
6.1.5
U.S. DOT Ferry Programs
Under Moving Ahead for Progress in the 21st Century (MAP-21), the surface transportation
reauthorization for FY13-14, there are two federal programs in support of ferry services.
17
In FY 2012, EDA awarded numerous grants that support marine port operations, including constructing rail access, intermodal
facilities, marine services and repair facilities, and riverfront redevelopment. For more information, see the Economic Development
Administration’s FY 2012 Annual Report, http://www.eda.gov/pdf/annualreports/fy2012/EDA_FY_2012_Annual_Report_full.pdf
18
Fall River’s unemployment rate (13.1%) is 4.9 percentage points greater than the US. New Bedford’s unemployment rate (12.6%)
is 4.4 percentage points greater than the US. Bristol County’s unemployment rate (9.4%) is 1.2 percentage points greater than the
US.
Revised November 8, 2013
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Ports of Massachusetts Strategic Plan
6.1.5.1
Technical Memorandum Number 6
Construction of Ferry Boats and Ferry Terminal Facilities
The Program. This is a new program created by MAP-21 to replace the former Ferry Boat Discretionary
(FBD) program. It falls under the Federal Highway Administration (FHWA) and provides funding for the
construction of ferry boats and ferry terminal facilities and maintains the same eligibility requirements as
the FBD program, including:
•
the construction must occur within the US or its territories;
•
it must not be feasible to build a bridge, tunnel, combination thereof, or other normal highway
structure in lieu of the ferry;
•
the ferry must operate on a route that has been classified as a public road (and is not designated
as part of the Interstate system);
•
the ferry is at least majority publicly owned or publicly operated; and,
•
the operating authority and fare charged are under the control of the state or other public entity.
Funding Levels. The authorized funding levels for FY 2013 and FY 2014 are $67 million in each year.
These funds are distributed by formula to ferry systems and public entities responsible for developing
19
them for the construction of ferry boats and terminal facilities. Funds will be distributed according to the
20
following formula:
•
20% based on the number of ferry passengers carried by each ferry system
•
45% based on the number of vehicles carried by each ferry system
•
35% based on the total route miles serviced by each ferry system.
The funds are distributed to State DOTs, which then work with the ferry systems and responsible public
entities to develop construction projects. The federal share is 80%, and the non-federal share may
21
include private contributions.
Status and applicability. The Massachusetts ports generally meet the eligibility criteria. The new formula
program replaces the prior discretionary program, under which Salem received a $2.5 million grant in
22
2010, a key portion of the funding to date of the Salem Wharf project. Several other projects were
funded under the discretionary program, including the Boston Redevelopment Authority’s $1.28 million
23
grant for the purchase of its East Boston ferry vessels in 2012. In FY 2013, under the new program,
$1.25 million was allocated to Massachusetts for two operators: Water Transportation Alternatives
Inc./MBTA ($111,306), and the Woods Hole Martha’s Vineyard and Nantucket Steamship Authority
24
($1.13 million).
6.1.5.2
Passenger Ferry Grant Program
The Program. This program created by MAP-21 is to be administered by the Federal Transit
Administration (FTA) as a set aside from Section 5307 formula grant funding. The program is designed to
19
20
21
http://www.fhwa.dot.gov/specialfunding/fbp/primer.pdf
http://www.fhwa.dot.gov/map21/ferry.cfm.
http://www.fhwa.dot.gov/specialfunding/fbp/primer.pdf
22
http://www.massdot.state.ma.us/Portals/17/docs/ferry/CurrentMassDOTFerryBoatProjects.pdf
23
http://www.fhwa.dot.gov/discretionary/2012fbd.cfm
24
http://www.fhwa.dot.gov/specialfunding/fbp/distribution.cfm
Revised November 8, 2013
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Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
support passenger ferry projects and will be a competitive grant program, but other details, including
eligibility, are not yet available. A Notice of Funding Availability (NOFA) for the program is expected in the
fall of 2013.
Funding Levels. MAP-21 authorizes a total of $30 million per year to be set aside from Section 5307
Urbanized Area Formula Grants for the Passenger Ferry Grant Program, to be allocated by competitive
25
selection.
Status and applicability. It is expected that this program will be applicable to the five Compact Ports,
although eligibility for privately operated ferries is unknown at this point.
6.1.6
Federal Highway Administration Grant Programs under MAP-21
Prior to MAP-21, each apportioned program had its own formula for distribution, and the total amount of
federal assistance a state received was the sum of the amounts it received for each program. MAP-21
instead provides a total apportionment for each State and then divides that State amount among
individual apportioned programs. At the time of this Memorandum, the bill has hit the halfway mark; many
of its programs will be subject to change in the successor legislation, in terms of program structure,
funding levels, or both.
6.1.6.1
National Highway Performance Program (NHPP)
The Program. MAP-21 substantially restructured the major highway formula programs. The National
Highway System (NHS), Interstate Maintenance, Highway Bridge, and the Appalachian Development
Highway System programs were incorporated into the new National Highway Performance Program
(NHPP). NHPP projects must be on an eligible facility and support progress toward achievement of
national performance goals for improving infrastructure condition, safety, mobility, or freight movement on
the NHS, and be consistent with Metropolitan and Statewide planning requirements. Eligible activities
include, among others:
25
•
construction, reconstruction, resurfacing, restoration, rehabilitation, preservation, or operational
improvements of NHS segments and of federal-aid highways not on the NHS;
•
construction, replacement, rehabilitation, preservation, and protection of NHS bridges and
tunnels;
•
construction, rehabilitation, or replacement of existing ferry boats and facilities, including
approaches, that connect road segments of the NHS;
•
bicycle transportation and pedestrian walkways;
•
highway safety improvements on the NHS;
•
capital and operating costs for traffic and traveler information, monitoring, management, and
control facilities and programs;
•
infrastructure-based ITS capital improvements;
•
environmental restoration and pollution abatement; and,
•
environmental mitigation related to NHPP projects.
http://www.fta.dot.gov/documents/MAP-21_Fact_Sheet_-_Urbanized_Area_Formula_Grants.pdf.
Revised November 8, 2013
10
Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
Funding Level: NHPP national funding is $20.8 billion in FY13 and $20.9 billion in FY14.
27
Massachusetts’ statewide share for the two years is $327 million and $331 million, respectively.
26
Status and Applicability. NHPP is fully authorized through FY14 and is the core funding program for
highways, bridges, and related improvements in the federal aid system. Projects within the five Compact
Port study areas funded under NHPP and its predecessor programs are listed in Table 7 on page 24.
6.1.6.2
Surface Transportation Program
The Program. The Surface Transportation Program (STP) provides flexible funding that may be used by
states and localities for projects to preserve and improve the conditions and performance of any federalaid highway, bridge, or tunnel project on any public road, pedestrian and bicycle infrastructure, and transit
capital projects.
Funding Levels. Funding includes $10.2 billion in FY 2013 ($150.8 million for Massachusetts) and $10.3
28
billion in FY 2014 ($152.1 million for Massachusetts). Under MAP-21, a lump sum total is authorized
and then each state’s total share is calculated. Within the state it is divided up by program. In FY 2013,
Massachusetts’ set-asides included approximately $3.0 million for the Transportation Alternatives
Program (TAP) and $2.0 million for State Planning and Research. Of Massachusetts’ remaining funds,
half (or $72.4 million in FY 2013) can be used anywhere in the state, including $28.4 million set aside for
off-system bridges. The other half is obligated to three areas in proportion to population:
•
Urbanized areas with population greater than 200,000 received $61.8 million in FY 2013,
including approximately $45.2 million to Boston;
•
Areas with population greater than 5,000 but less than 200,000 received $4.7 million in FY 2013;
and,
•
Areas with population of 5,000 or less received $5.9 million in FY 2013.
Status and Applicability. The STP is applicable to a variety of port-related needs. Transportation
infrastructure within port terminal boundaries that are necessary to facilitate direct intermodal
interchanges, transfers, and access into and out of the port are eligible. Environmental restoration and
pollution abatement projects, border infrastructure projects, truck parking facilities, and construction of
ferry boats and terminals are eligible for funding. Funding also may be used for road projects (outside of
29
port boundaries) that are integral to port access needs.
6.1.6.3
Congestion Mitigation and Air Quality Improvement Program
The Program. The Congestion Mitigation and Air Quality Improvement Program (CMAQ) has been
continued in MAP-21 as a means to provide funds to state DOTs, MPOs and transit agencies that invest
in projects that reduce transportation-related pollutants to meet the requirements of the Clean Air Act.
Funding is available to projects that reduce congestion and improve air quality for nonattainment areas
and for former nonattainment areas that are now in compliance (maintenance).
26
http://www.fhwa.dot.gov/map21/nhpp.cfm.
27
http://www.fhwa.dot.gov/legsregs/directives/notices/n4510765/n4510765_t1.cfm and
http://www.fhwa.dot.gov/map21/table2014.cfm.
28
Ibid.
29
http://www.fhwa.dot.gov/map21/stp.cfm.
Revised November 8, 2013
11
Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
The CMAQ provisions recognize ozone, carbon monoxide (CO), and particulate matter as the primary
transportation pollutants. Funding can be used for transportation projects that reduce pollution and are in
a nonattainment or maintenance area. Projects seeking funding through CMAQ must be included in the
metropolitan planning organization’s (MPO) transportation plan and the transportation improvement plan
(TIP) or the Statewide TIP for areas not in an MPO. Freight projects are eligible for CMAQ funding if they
30
show an air quality benefit.
Funding Levels. The Federal government appropriated over $8.6 billion dollars in CMAQ funds between
FY 2005 and FY 2009. The FY 2013 funding level is $2.3 billion ($63.4 million for Massachusetts) and the
31
estimated funding level for FY 2014 is also $2.3 billion (approximately $64.0 million for Massachusetts).
Status and Applicability. CMAQ funding is a candidate funding source for a limited range of port
projects, particularly intermodal facility projects that target diesel freight emissions reductions through
freight network logistics improvements. CMAQ funding was used for electrification and lighting of New
Bedford’s Fisherman’s and Homer’s Wharves to enhance the efficient intermodal transfer of fish from boat
to truck. Ports could also seek funding for vehicle inspections and maintenance programs. CMAQ funding
can also be used for roadway projects in a port’s landside access network.
6.1.6.4
Highway Safety Improvement Program (HSIP)
The Program. HSIP includes the former Highway-Railroad Grade Crossings Program and the former
Hazard Elimination Program. The HSIP requires a data-driven, strategic approach to improving highway
safety on all public roads that focuses on performance.
Funding Levels. The program includes $2.2 billion in FY 2013 ($33.6 million for Massachusetts) and an
estimated $2.2 billion in FY 2014 ($33.9 million for Massachusetts). For railway-highway crossings $220
million is set aside in each fiscal year (including $2.4 million for Massachusetts). The Federal share of a
32
project’s cost is set at 90 percent.
Status and Applicability. HSIP funding is specifically available for grade crossing improvements and
removal of high-risk at grade crossings. With high volumes of truck traffic to and from the ports, highway
safety is vital for the general public as well as the timely delivery of products.
6.1.6.5
Overall Funding Levels in the Affected MPOs
The five Compact Ports are located in two of the state’s 14 Metropolitan Planning Organization (MPO)
jurisdictions: Boston, Gloucester, and Salem are part of the Boston MPO; Fall River and New Bedford are
part of the Southeast Massachusetts MPO. A review of the Transportation Improvement Program (TIP)
for each MPO provides the overall funding levels from federal grant programs. Table 2 lists the estimated
MPO funding levels for the current fiscal year (FY13) and the next four.
30
http://www.fhwa.dot.gov/map21/cmaq.cfm.
31
http://www.fhwa.dot.gov/legsregs/directives/notices/n4510765/n4510765_t1.cfm and
http://www.fhwa.dot.gov/map21/table2014.cfm.
32
http://www.fhwa.dot.gov/map21/hsip.cfm.
Revised November 8, 2013
12
Ports of Massachusetts Strategic Plan
Table 2:
Technical Memorandum Number 6
Estimated “Target” and Total FHWA Funding for FY13-17 ($millions)
FY13
FY14
FY15
FY16
FY17
Boston MPO
“Target” Funds *
65.8
79.0
67.9
75.0
75.0
Total FHWA Funds
226.5
148.3
111.6
127.6
120.6
“Target” Funds *
13.7
16.5
14.2
15.6
15.6
Total FHWA Funds
72.9
47.7
19.4
40.6
12.8
SE Mass MPO
* The total of HSIP, STP, and CMAQ funds allocated to the MPO.
33
34
Source: Boston MPO FY13-16 and FY14-17 ; SE Mass MPO TIP FY13-16 and FY14-17 .
6.1.7
Transportation Investment Generating Economic Recovery (TIGER) Grants
The Program. The TIGER program began as part of the American Recovery and Reinvestment Act of
2009 (ARRA) as a means for the US Department of Transportation to invest in critical surface
transportation projects that create economic benefits for communities, regions, or the nation. The grant
process is highly competitive, with only 51 projects selected for funding under TIGER I out of 1,457
applications. Similarly, under Tiger II, only 42 projects were funded out of nearly 1,000 applications, 46
TIGER III projects under were funded out of 848 applications, and 47 TIGER IV projects (the 2012 round)
were funded out of 703 applications. Projects are evaluated across five long-term outcomes including
state of good repair, economic competitiveness, livability, sustainability, and safety.
TIGER grants are particularly well suited for projects that are multi-modal, multi-jurisdictional, or otherwise
challenging to fund under existing programs. DOT uses a rigorous evaluation process to select projects
with benefit-to-cost ratios greater than 1.0. Projects are typically “shovel ready”, innovative in project
delivery, and produce more livable and sustainable communities. Eligible applicants include states,
municipalities, port authorities, and most other political subdivisions.
Funding Levels. Congress appropriated $1.5 billion in ARRA for TIGER I, followed by $600 million for
TIGER II, $527 million for TIGER III, $500 million for TIGER IV, and $474 million for TIGER V, the round
currently underway in 2013. TIGER grants are always matched by state, local, or private funds, and the
TIGER award is intended to be the “last money in”. The maximum TIGER share is currently 80%, but
35
“overmatched” projects with lower federal shares are favored.
Status and Applicability. The TIGER program is highly applicable to ports, since its eligible categories
include, among others, port infrastructure improvements, freight rail projects, and any federally-eligible
highway or bridge project. Thus far, TIGER has been legislated through the annual appropriations
process. Future rounds depend on annual legislation via appropriation or the program’s permanent
authorization in the successor to MAP-21.
The many funded port-related projects are listed in Table 3. The New Bedford Fast Track project, funded
in the initial round, is repairing four structurally deficient bridges on the CSX New Bedford Line (recently
acquired by the Commonwealth); this will provide freight benefits to the Port of New Bedford and is
33
http://www.bostonmpo.org/Drupal/data/pdf/plans/TIP/FFYs_2013_2016_TIP_Amend_Five_Tables_0624.pdf;
http://www.bostonmpo.org/Drupal/data/pdf/plans/TIP/FFYs_2014_2017_Rev_Draft_TIP.pdf.
34
http://www.srpedd.org/transportation/WEB%20TIP%2003-04-13.pdf; http://www.srpedd.org/mpo/FY14_17_DRAFT_TIP.pdf.
35
http://www.dot.gov/tiger.
Revised November 8, 2013
13
Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
essential for the planned South Coast Rail passenger service. A number of other port projects have
sought TIGER funding unsuccessfully, reflecting the highly competitive, over-subscribed nature of the
program. One such supplication was an $84 million request by the Boston Economic Development and
Industrial Commission in 2009’s initial round; this application covered Massport’s proposed Black Falcon
cruise terminal expansion, the reactivation of the Track 61 in the Marine Industrial Park, and
36
improvements to the Park’s North, East, and South Jetties.
Table 3:
Year
2012
2012
2012
2012
2012
2012
2012
2012
2011
2011
2011
2011
2010
2010
2010
2010
2010
2010
2010
2009
2009
2009
2009
2009
2009
2009
2009
TIGER Awards for Port-Related Projects
Project Name
Port of Oakland Intermodal Rail Improvements
Garrows Bend Intermodal Container Facility
Gulf Marine Highway Intermodal Project
South Hudson Intermodal Facility (Bayonne)
Nueces River Rail Yard Expansion
Port of Lewiston Dock Extension
Port of Catoosa Main Dock Rehabilitation
West Memphis Intermodal Rail Port Logistics
South Jersey Port Rail Improvements
Dames Point Intermodal Container Facility
Port of Long Beach Rail Realignment
Port of New Orleans Rail Yard Improvements
Port of Miami Rail Access
Port of Los Angeles: West Basin Railyard
Port of Providence: Electric Cranes
Port Manatee Marine Highway
Oregon International Port of Coos Bay
Port at Cates Landing
Port of Vancouver USA
New Bedford Fast Track
California Green Trade Corridor/Marine
Reconstruction of Pier 29 in Honolulu Harbor
Quonset Wind Energy and Surface
Port of Gulfport Rail Improvements
Revitalizing Maine's Ports
SW Regional Intermodal Freight Transportation
Auke Bay Loading Facility
State
CA
AL
TX
NJ
TX
ID
OK
AR
NJ
FL
CA
LA
FL
CA
RI
FL
OR
TN
WA
MA
CA
HI
RI
MS
ME
IL
AK
TIGER Grant
$15,000,000
$12,000,000
$12,000,000
$11,400,000
$10,000,000
$1,300,000
$6,425,000
$10,953,244
$18,500,000
$10,000,000
$17,000,000
$16,738,246
$22,767,000
$16,000,000
$10,500,000
$9,000,000
$13,573,133
$13,000,000
$10,000,000
$20,000,000
$30,000,000
$24,500,000
$22,300,000
$20,000,000
$14,000,000
$6,000,000
$3,640,000
Source: Compiled from TIGER award listings, ibid.
6.1.8
Department of Transportation Financing Programs under MAP-21
In addition to traditional capital grant funding, US DOT offers financing mechanisms as well, of which the
most important and versatile is TIFIA. With overall funding levels becoming more constrained, MAP-21
featured a major expansion of TIFIA, in terms of both its appropriation level and its range of eligible
projects. Two additional finance mechanisms of potential relevance to port projects are discussed as well.
36
City of Boston, Port of Boston TIGER Grant Application, 2009.
Revised November 8, 2013
14
Ports of Massachusetts Strategic Plan
6.1.8.1
Technical Memorandum Number 6
Transportation Infrastructure Finance and Innovation Act (TIFIA)
The Program. The Transportation Infrastructure Finance and Innovation Act (TIFIA), originally enacted in
1998 as part of TEA-21, is a Federal credit program for major transportation investments. Because TIFIA
is a credit program, not a grant program, projects must be capable of generating their own revenue
streams through user charges or other dedicated funding sources in order to use it. TIFIA provides three
types of financial assistance: direct federal loans to project sponsors; loan guarantees by the federal
government to institutional investors; and lines of credit that may be drawn upon to supplement project
revenues. TIFIA assistance improves access to capital markets, offers flexible repayment terms (including
a five-year grace period), and in most cases more favorable interest rates than can be found in private
capital markets for similar instruments.
Eligible project sponsors include state departments of transportation, local governments, transportation
authorities, public-private partnerships, or any legal entity undertaking the project and authorized by the
Secretary of Transportation. Eligible projects include highway projects, passenger rail projects, transit and
intermodal projects, private rail facilities providing public benefit to highway users, surface transportation
infrastructure modifications necessary to facilitate direct intermodal transfer and access into and out of a
port terminal, intelligent transportation systems, international bridges and tunnels, and intercity passenger
bus or rail facilities and vehicles. MAP-21 expands eligibility to include related improvement projects
grouped together, so long as the individual components are eligible and the related projects are secured
by a common pledge.
The project must be reasonably anticipated to cost at least $50 million. For ITS projects, the minimum
total project cost is $15 million, and for rural projects, $25 million. Projects classified as rural for TIFIA
purposes are those in cities with a population of less than 250,000—including Fall River, Gloucester, New
Bedford, and Salem. While TIFIA’s normal interest rate for secured loans can be as low as the rate on 30year US Treasuries, 10% of TIFIA’s budget authority is set aside to reduce interest rates on rural projects
to as low as one-half the Treasury rate. In addition, MAP-21 allows existing Federal financing instruments
for rural infrastructure projects to be refinanced with TIFIA credit assistance.
MAP-21 increased the maximum amount for a TIFIA direct loan for a project to 49% of the project’s
eligible costs (previously 33%, and still limited to 33% if DOT’s non-subordination requirement is waived).
For a TIFIA line of credit, the maximum amount remains at 33% of the project’s eligible costs. Project
financing may be repaid in whole or in part from tolls, user fees, tax increment streams, annual
appropriations, or other dedicated revenues.
Funding Levels. MAP-21 authorized a TIFIA budget of $750 million in FY 2013 and $1 billion in FY 2014.
This is not the amount available for loan, but the cost of the credit subsidy involved in each loan or
guarantee. This budget authority translates into an aggregate lending capacity of about $6.9 billion in FY
37
2013 and $ 9.2 billion in FY 2014.
Status and Applicability. Expanding the use of TIFIA is a strategic priority of US DOT. To date,
Massachusetts has not utilized the TIFIA program. TIFIA is a candidate financing source for port projects
that ease landside bottlenecks in the network serving a port. TIFIA has been used for several port and
port-related projects, including the Port of Miami Tunnel and the Staten Island Ferries and Terminals. The
Alameda Corridor project, which created a grade-separated rail line connecting the combined ports of Los
Angeles and Long Beach to the national double-stack rail system, was the predecessor and model for
37
http://www.fhwa.dot.gov/ipd/tifia/index.htm and http://www.fhwa.dot.gov/ipd/pdfs/tifia/fy2013_tifia_nofa_073112.pdf.
Revised November 8, 2013
15
Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
TIFIA, bringing together several funding sources from federal, state, and port programs, along with a user
fee applied to shipments either using, or capable of using the corridor.
6.1.8.2
Railroad Rehabilitation and Improvement Financing Program (RRIF)
The Program. RRIF is a credit program specifically for railroads. Like TIFIA, it was originally created in
TEA-21 to provide credit assistance in the form of direct loans and loan guarantees. RRIF is housed in
the Federal Railroad Administration (FRA) rather than the Secretary’s Office. Unlike TIFIA, a RRIF loan
can cover 100% of eligible project costs; however, Congress has not appropriated funds for the credit
subsidy, leaving borrowers to fund the credit subsidy from other sources. Consequently, the program has
not been well used. It has been suggested that in future reauthorizations, RRIF either be combined with
TIFIA or provided with a credit subsidy appropriation of its own.
Funding Levels. The FRA is authorized to provide direct loans and loan guarantees of up to $35 billion,
of which up to $7 billion is reserved for projects benefiting freight railroads other than Class I carriers. All
told, there have been 33 loans totaling $1.7 billion; since 2009, almost $980 million in loan agreements
38
have been executed. There have been no RRIF loans in Massachusetts.
Status and Applicability. RRIF financing is potentially applicable to projects that alleviate a choke point
in a port’s landside rail network or provide an extension of the rail network to a port currently lacking rail
access. Projects that provide economic development or enhance public safety are prioritized under the
program. The ports of Gloucester and Salem have no freight rail service and no significant freight activity.
However, Boston, Fall River, and New Bedford are served by rail (currently inactive in the case of
Boston). Projects to enhance these connections would be eligible for financing under RRIF. The lines
reaching these three ports are owned either by the Commonwealth or by Massport (the inactive Mystic
Wharf Branch), and all are non-Class I lines.
6.1.8.3
Tax-Exempt Financing of Highway Projects and Rail-Truck Transfer Facilities
The Program. The interest on state and local bond issues is typically excluded from federal income
taxation. By contrast, the interest on state or local bonds issued to finance the activities of entities other
than state and local governments is typically taxed, unless the bond was issued for a particular purpose
that is eligible for tax-exemption.
Among the current exempt purposes for these so-called Private Activity Bonds (PABs) are those issued
for certain transportation facilities (airports, ports, mass commuting, and high-speed intercity rail facilities).
SAFETEA-LU created a new type of exempt facility—the “qualified highway or surface freight transfer
facility.” This new exempt facility category includes, among other things, “facilities for the transfer of
freight from truck to rail or from rail to truck (including facilities for temporary storage during such
transfers), which receives Title 23 (FHWA) or Title 49 (FTA) funding.”
Funding Levels. There is $15 billion of issuance authority, to be allocated among qualified facilities.
There are no caps on the annual amount that may be issued.
Status and Applicability. This financing incentive is authorized and available. A government entity must
issue the bond, but the program largely aids private parties by reducing their cost of financing a freight
intermodal project. Other facilities that qualify include port machinery, loading docks, and the computer
equipment used to operate them. A number of highway and intermodal projects have issued bonds under
38
RRIF Fact Sheet: http://www.fra.dot.gov/eLib/Details/L04476.
Revised November 8, 2013
16
Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
39
this program, and others have financing in progress. PABs were issued for the CenterPoint Intermodal
Center in Joliet, Illinois for $225 million to construct an intermodal logistics center and inland port on
3,600 acres southwest of Chicago. Another CenterPoint Intermodal Center has allocated $475 million in
PABs in Kansas City.
6.1.9
Environmental Protection Agency Clean Diesel Programs
The Programs. The National Clean Diesel Funding Assistance Program focuses on projects that achieve
significant reductions in diesel emissions and diesel emissions exposure, particularly from fleets operating
in areas designated by the Administrator as poor air quality areas. Eligible diesel emission reduction
solutions include verified emission control technologies such as exhaust controls, cleaner fuels, engine
upgrades, verified idle reduction technologies, verified aerodynamic technologies and low rolling
resistance tires, certified engine repowers, and/or certified vehicle or equipment replacement. Eligible
diesel vehicles, engines and equipment may include buses, medium-duty or heavy-duty trucks, marine
engines, locomotives and non-road engines, equipment or vehicles used in construction, handling of
cargo (including at a port or airport), agriculture, mining or energy production (including stationary
generators and pumps).
The State Clean Diesel Program provides funding to states to support grant and loan programs for clean
diesel projects that use approved retrofit technologies, idle-reduction technologies, aerodynamic
technologies, and low rolling resistance tires. Funds cannot be used to support federal mandates.
Funding Levels. In FY 2013, a total of $9 million in available funds was appropriated to the national
program with a minimum award of $30,000 and $1.2 million maximum. Twenty-four awards were
expected from the total pool of applicants. An additional $5.6 million was appropriated for the state
program.
Status and Applicability. The clean diesel programs are funded and active in FY13, and are potentially
relevant to ports, particularly Boston, Gloucester, and New Bedford, because of their high volumes of
truck traffic in congested urban areas. The program has also been used to reduce diesel engine use by
vessels in port; Massport received $400,000 from the national funding program for the modernization of
the electrical system at Boston Fish Pier, including the provision of on-shore power hook-ups to berthed
vessels. The national funding program has been used by other ports and planning commissions to
repower engines operating in nearby waters, to retrofit or replace engines and vehicles, and to install idle
40
reduction technologies on long-haul trucks.
6.2
State and Local Programs
State and local programs may fund port-related projects in their own right or provide “local match” for
federally-funded projects. This section of the Memorandum addresses an array of programs which are
available to serve both purposes.
The discussion begins with two funding sources specifically dedicated to ports:
39
For a list of projects using PABs, see:
http://www.fhwa.dot.gov/ipd/finance/tools_programs/federal_debt_financing/private_activity_bonds/index.htm#qualified
40
For a detailed list of National Funding Assistance Projects (2008-2012) see: http://www.epa.gov/cleandiesel/projectsnational.htm.
Revised November 8, 2013
17
Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
•
the statewide Seaport Bond program, which has funded multiple projects in Gloucester, Salem,
Fall River, and New Bedford; and,
•
Massport’s Capital Program, which is the principal funding source for public investment in the
Port of Boston.
Next is a series of programs which are not port-specific but have applicability to the types of projects
which may arise in the Compact Ports:
•
MassDOT’s statewide highway and bridge programs, which provide the non-federal share of
projects affecting every port;
•
the MassWorks program of the Executive Office of Housing and Economic Development, which
funds local development infrastructure projects; and,
•
the Massachusetts Clean Energy Center, the principal funding source for the South Terminal
project in New Bedford.
Finally, the discussion turns to the state’s three related programs for financing economic development
infrastructure through capturing the value of industrial or commercial development, and to
MassDevelopment’s broad ability to finance business investment and expansion.
•
District Improvement Finance, the Massachusetts version of traditional municipal tax-increment
financing;
•
the new Local Infrastructure Development Program, through which district infrastructure is
financed through special assessments or betterments; and,
•
the Infrastructure Investment Incentive (I-Cubed) program, a “state TIF” mechanism in which
district infrastructure is financed through future sales and income taxes.
6.2.1
The Seaport Bond Bill and Seaport Advisory Council
The Program. Massachusetts offers a dedicated grant program for seaport capital improvements through
the Seaport Bond Bill and its policy structure, the Seaport Advisory Council. The Council was created by
Executive Order #376 in December 1994 and is chaired by the Lieutenant Governor. The Council
includes the Secretaries of Transportation, Energy and Environmental Affairs, Housing and Economic
Development, and Administration and Finance; the Mayors of New Bedford, Fall River, Gloucester,
Salem, and Boston or their designees; the Executive Director of Massport or his designee; and several
representatives of maritime businesses.
The purpose of the Seaport Council is to enhance and develop the commercial maritime resources of the
Commonwealth, including the Port of Boston but with an emphasis on the next-tier deep water ports:
Gloucester, Fall River, Gloucester, and New Bedford. The Council overlaps, but is distinct from, the
Massachusetts Ports Compact, which was created by Governor Patrick in 2012 and includes the House
and Senate Chairs of the Transportation Committee as well as the Executive Branch, municipal, and
Massport representatives.
The original Seaport Bond Bill was Chapter 28 of the Acts of 1996, which authorized state pier
improvements, dredging in ports other than Boston, and a wide range of port improvements “including but
not limited to construction, reconstruction, rehabilitation, expanding, replacing, and improving public
facilities, piers, wharves, boardwalks, berths, bulkheads, and other harbor and waterfront facilities”. Also
Revised November 8, 2013
18
Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
authorized were two major projects serving the Port of Boston: MassDOT’s double-stack rail initiative; and
most of the non-federal share of the Boston Harbor maintenance dredging – which was authorized by
41
Congress in 1990 (the remaining share is to be paid by Massport).
Funding Levels. The 1996 Seaport Bond Bill authorized a total of $280.35 million. In 2008, an additional
$110.18 million was authorized for general port improvements as part of that year’s Environmental Bond
42
Bill. The actual rate of expenditure is limited by the state’s overall administrative bond cap. As of 2010, a
total of $95 million in bond funds had been committed on approximately 300 grants; between 2007 and
43
2012, $50 million was committed on 98 grants. Numerous additional awards have been made in the
three years since. The Seaport Advisory Council’s annual bond cap allocations have typically been in the
44
$8-10 million range, and for FY13 the program has been allocated $11 million in bond cap.
Status and Applicability. As described above, the Seaport Bond is legislatively authorized and is
broadly applicable to projects in Gloucester, Salem, Fall River, and New Bedford. In addition to serving as
a primary source of funding for many projects, Seaport Bond funds are a common source of “local match”
for federally funded projects, including those from the Department of Transportation and, as noted earlier,
the Department of Homeland Security’s Port Safety Grant Program.
Both the 1996 and 2008 bond authorizations included significant amounts earmarked for Salem, Fall
River, and New Bedford. For various reasons, including the bond cap and the status of particular projects,
only a portion of those amounts has been awarded to date. It should be noted that other waterfront
municipalities are also eligible for Seaport Bond funds, and their projects compete with those of the
45
Compact Ports for funding under the annual cap. Representative Seaport Bond projects in the Compact
Ports are listed in Table 4.
41
An Act Relative to the Revitalization and Development of the Commonwealth's Seaports, Chapter 28 of the Acts of 1998;
http://archives.lib.state.ma.us/actsResolves/1996/1996acts0028.pdf.
42
Chapter 312 of the Acts of 2008; the seaport bond funds are authorized in Section 2A, item 1100-2500.
43
Seaport Advisory Council, Presentation to the Regional Transportation Advisory Council, January 13, 2010; and Seaport Advisory
Council, Projects Voted 2007-2012.
44
http://www.mass.gov/bb/cap/fy2013/rec/proj/hcommun_investeadcrd002.htm.
45
Since 2007, 21 cities and towns other than the Compact Ports have received grants.
Revised November 8, 2013
19
Ports of Massachusetts Strategic Plan
Table 4:
Technical Memorandum Number 6
Representative Seaport Bond Grants in the Port Compact Cities
Cities
Boston
Grants
• Charlestown Navy Yard Pier 4 Dredge
• Chelsea Street Bridge Seawall Study
Fall River
•
•
•
•
•
State Pier South Berth Rehabilitation
State Pier Floats and Docks
City Pier Remediation
Heritage State Park Boardwalk Replacement
Battleship Cove Engineering and Permitting
Gloucester
•
•
•
•
•
•
Harborwalk Design and Construction
Harbor Economic Development Business Plan
Purchase of “I4-C2” DPA Development Parcel
Improvements to Rogers Street
Maritime Heritage Center Wharf
Blynman Canal and Stacey Boulevard Seawall Reconstruction
New Bedford
•
•
•
•
•
•
•
•
Phase III Dredging and CAD Cap
State Pier Ferry Terminal
State Pier, Buildings 1 and 2 Rehabilitation
Commercial Fishing Fleet Berthing Expansion
Public Piers Safety and Security Project
Gifford Street Boat Ramp
Hoppy’s Landing Commercial Fishing Facilities (Fairhaven)
Union Wharf engineering (Fairhaven)
Salem
•
•
•
•
Salem Wharf (acquisition of site from Dominion Power)
Salem Wharf and Ferry Pier (design and construction, multiple grants)
South River Harborwalk (design and construction)
South River dredging (design and permitting)
Source: Seaport Advisory Council, Projects Voted 2007-2012; grant data from Cities of Salem and Gloucester.
6.2.2
Massport Capital Program
Massport, the state’s only port authority, owns and operates the public terminals in the Port of Boston,
including Conley Terminal, Black Falcon/Cruiseport Boston, the Fish Pier, Massport Marine Terminal,
Boston Autoport, and other general cargo facilities. Massport also owns a portfolio of commercial real
estate properties in South Boston and Charlestown, the net revenues of which are assigned to its
Maritime Department for use in the port.
The Program. Massport’s capital program is a multi-year rolling plan for the construction of new facilities
and the capital maintenance and replacement of existing ones. Since Massport receives no state or
municipal funding, it must fund its capital program through its internally generated revenues, primarily by
issuing Massport bonds from time to time. As one of the handful of US port authorities with both airport
and seaport functions, Massport is able to use the net cash flow of Logan Airport to support the Authoritywide capital program, including the Port Properties. This is crucial for the Maritime Department, whose
Revised November 8, 2013
20
Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
own annual operations are a break-even proposition—unable, on their own, to support a significant
46
capital plan for the port facilities.
Massport does receive federal capital support, principally on the Aviation side in the form of grants from
the Federal Aviation Administration and the Transportation Security Administration for airport
improvements and security. The one major form of federal support for the Maritime Department is the
Army Corps of Engineers’ sponsorship of navigational dredging. Recently Massport has received smaller,
more specialized federal grants for port security and for air quality improvements.
Funding Levels. Massport’s current five-year Capital Program with respect to Maritime is summarized in
Table 5. The Authority-wide FY13-17 Capital Program, adopted by the Board in February 2013, provides
$1.108 billion for the five fiscal years in question. Of this total, $75 million, or 7%, is allocated to Maritime
Department projects. The total cost of those projects, counting the portions already funded or to be
funded after FY17, is $152.9 million. The lion’s share of this total—$117.1 million—is for improvements at
Conley Terminal, and most of that is to implement the long-planned expansion into the Coastal Oil site
and the dedicated freight road from Conley to the existing Haul Road/Bypass Road system. The freight
47
road alone is a $34 million project, fully funded by Massport.
The Capital Program also identifies those projects that could proceed in the next five years contingent on
securing a funding source, as well as those that are unfunded entirely. For Maritime, projects worth about
$270.9 million depend on securing a funding source, and another $146.6 million in projects are listed as
simply unfunded. By far the largest item in this combined category is the approximately $130 million nonfederal share of the proposed Army Corps of Engineers Deep Draft Navigation Improvement project—the
channel deepening which would serve not only the main ship channel and Massport’s Conley, Black
48
Falcon, and Mystic terminals but also the critical, non-Massport-controlled waterway of Chelsea Creek.
Massport has recently received approval from the Corps to undertake the preliminary engineering and
49
permitting of the project, and those activities are funded in the Capital Program.
Status and Applicability. Massport’s Capital Program is generally renewed annually on a rolling fiveyear basis. (Massport’s current Authority-wide strategic planning initiative could conceivably result in a
different format.) Massport’s capital expenditures are limited to the Port of Boston, and generally to those
port facilities which it owns and operates. (Massport’s sponsorship of the Deep Draft Navigation
Improvement, if implemented, might be a limited exception, although local-share funding would potentially
50
be drawn from both Massport and non-Massport sources.)
46
Massport 2012 Consolidated Annual Financial Report, p. 103. In 2012, the most recent reporting year, the Maritime Department’s
operating revenues were approximately $73.3 million, versus expenses of approximately $69.0 million; this modest operating
surplus of $4.3 million was due entirely to the $5.8 million net cash flow of the South Boston and Charlestown commercial
properties. Net airport revenues may be diverted to the Port Properties because Massport is “grandfathered” by 1982 legislation as
one of the few US airport authorities that also owned and operated seaport facilities at that time
(http://www.faa.gov/airports/new_england/airport_compliance/media/revenue_diversion.pdf).
47
Massport FY13-17 Capital Program (tables), p. 27.
48
Ibid., p. 60.
49
Also funded, as a “private” project funded by berth owners, is the $9.4 million Phase II of the on-going Harbor Maintenance
dredging.
50
As noted above, the 1996 Seaport Bond authorized the Commonwealth to participate in the non-federal share of the maintenance
dredging program.
Revised November 8, 2013
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Ports of Massachusetts Strategic Plan
Table 5:
Technical Memorandum Number 6
Summary, Massport Five-Year Capital Program
On-Going Projects
Conley
Other
(A) Subtotal, On-Going
Proposed and Funded Projects
Conley
Other
(B) Subtotal, Proposed and Funded
(C) Total, Massport-funded (A+B)
(D) Privately funded *
Contingent on Funding
Conley
Other **
(E) Subtotal, Contingent
Unfunded
Conley
Other **
(F) Subtotal, Unfunded
(G) Total, contingent+unfunded (E+F)
Percentage funded, counting private
Percentage funded, excluding private
Funded
Pre-FY13
FY13FY17
PostFY17
Total
$ 47.0
$ 8.5
$ 55.5
$ 42.2
$ 10.9
$ 53.1
$ 1.2
$ 0.1
$ 1.3
$ 90.3
$ 19.7
$ 110.0
$ 7.3
$ 14.6
$ 21.9
$ 75.0
$ 81.7
$ 19.5
$ 1.5
$ 21.0
$ 22.3
$ 217.0
$ 26.8
$ 16.1
$ 42.9
$ 152.9
$ 298.7
$ 10.0
$ 256.6
$ 266.6
$ 0.1
$ 0.1
$ 10.0
$ 260.8
$ 270.9
$ 88.3
$ 33.0
$ 121.3
$ 387.9
$ 20.9
$ 4.4
$ 25.3
$ 25.4
$ 109.2
$ 37.4
$ 146.6
$ 417.4
$ 55.5
$ 4.1
$ 4.1
$ 4.1
52%
27%
* Consists principally of a major parking garage on South Boston Parcel K.
** Includes several private development projects.
Source: compiled from Massport FY13-17 Capital Program (tables), pp. 26-33 and 60-67.
6.2.3
MassDOT Highway, Bridge, and Freight Rail Programs
The Program. MassDOT’s statewide highway and bridge programs have a scope and applicability far
beyond the five ports of the Compact. They are important both as a source of non-federal aid funding and
as the primary means of matching the Federal Highway Administration programs outlined in the first
section of this Memorandum.
MassDOT programs, including the various highway and bridge accounts, are funded through an on-going
51
series of Transportation Bond Bills, including two enacted in 2008, one in 2011, and two in 2012.
MassDOT works with the 14 Metropolitan Planning Organizations to allocate state bond funds and match
them efficiently with federally funded projects through each MPO’s Transportation Improvement Program
(TIP). The Boston MPO includes Boston, Gloucester, and Salem; the Southeastern Massachusetts MPO
includes Fall River and New Bedford.
With respect to freight rail improvements, the double-stacking of the CSX main line from Westborough to
the New York state line is a joint project of MassDOT and CSX, with the MassDOT portion funded, as
noted earlier, through the 1996 Seaport Bond. Smaller, more localized rail improvements are funded
through the various Transportation Bond Bills. The Industrial Rail Access Program, authorized in the 2012
51
http://www.mass.gov/bb/cap/fy2013/dnld/fy13capappendixbma.pdf.
Revised November 8, 2013
22
Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
Bill, makes grants to rail users and municipalities; the initial funding round includes the rehabilitation of a
52
spur that will serve Maritime Terminal in the Port of New Bedford.
Funding Levels. The MassDOT capital program is constrained by, and is a principal driver of, the state’s
administrative bond cap. The state’s five-year Capital Investment Plan for FY 2013-2017 is based on a
total bond cap of approximately $2 billion per year. MassDOT’s share (exclusive of MBTA debt) is
approximately $620-650 million annually, supporting a total annual investment, including federal funding,
of $1.43 billion to $1.78 billion. Roughly two-thirds of this annual level is for statewide highway and bridge
53
projects, primarily for state-of-good-repair and system preservation.
The combination of federal highway and bridge funding, as described in the first section of this
Memorandum, and state funding, as described above, are currently estimated to produce the overall
funding levels for the Boston and Southeastern Massachusetts MPOs shown in Table 6. For each MPO,
this table was compiled from the FY13-16 TIP for FY13, and from the FY14-17 TIP for those years.
Table 6:
Estimated Highway/Bridge Funding for FY13-17 ($millions)
FY13
FY14
FY15
FY16
FY17
Boston MPO
Federal Funds
226.5
148.3
111.6
127.6
120.6
State Funds
45.5
34.9
27.0
28.9
28.1
State Funds NFA*
96.0
81.7
-
-
-
368.0
264.9
138.6
156.5
148.7
Federal Funds
72.9
47.7
19.4
40.6
12.8
State Funds
17.5
10.4
4.9
8.2
3.2
State Funds NFA *
172.4
-
-
-
-
Total
260.8
58.1
24.3
48.8
16.0
Total
SE Mass MPO
* State funds for non-federal aid projects, in this case in the Accelerated Bridge program.
Source: Boston MPO TIP for FY13-16, FY14-17 54; Southeast Massachusetts MPO
TIP for FY13-16, FY14-17. 55
Status and Applicability. The Capital Investment Plan parameters summarized above, which were
published in late 2012, do not reflect the impact of the recently enacted transportation funding bill,
Chapter 46 of the Acts of 2013, which is intended to increase overall transportation funding levels for the
next several years. The impact of the legislation on the capital side, in general and with respect to roads
and bridges in particular, remains to be determined. The applicability of state highway and bridge funding
to the Compact Ports and their landside access networks is demonstrated by key projects which have
occurred in recent years or are currently programmed, as listed in Table 7 below.
52
http://blog.mass.gov/transportation/uncategorized/patrick-murray-administrations-boosts-freight-rail-projects/.
53
http://www.mass.gov/bb/h1/fy14h1/cap_14/hdefault.htm
54
http://www.bostonmpo.org/Drupal/data/pdf/plans/TIP/FFYs_2013_2016_TIP_Amend_Five_Tables_0624.pdf;
http://www.bostonmpo.org/Drupal/data/pdf/plans/TIP/FFYs_2014_2017_Rev_Draft_TIP.pdf.
55
http://www.srpedd.org/transportation/WEB%20TIP%2003-04-13.pdf; http://www.srpedd.org/mpo/FY14_17_DRAFT_TIP.pdf
Revised November 8, 2013
23
Ports of Massachusetts Strategic Plan
Table 7:
Technical Memorandum Number 6
Recent or Programmed Highway Projects in the Five Port Areas
Cities
Project
Boston MPO
Boston
Gloucester
Salem
Chelsea Street Bridge Replacement (major bridge replacement at $125 million; essential
to enhance fuel tanker navigation in Chelsea Creek; multiple federal sources plus state
funding)
Alford Street Bridge Rehabilitation (Route 99 between Charlestown and Everett, key
component of access network to Mystic River port area)
East Boston Haul Road (Massport road linking Chelsea Creek to Logan Airport)
Northern Avenue Bridge (proposed reactivation of route to Port/Seaport District)
Summer and Congress Street Bridge Replacements (key routes to Port/Seaport)
Route 128 Annisquam River Bridge Rehabilitation (principal access route to the port
area)
Bridge Street (Route 1A) (principal route from downtown/waterfront area to Route 128;
funded with ARRA stimulus and regular FHWA/MassDOT funds)
Bridge Street Bypass (100% state funding)
Canal Street Reconstruction (programmed; one of several access routes to
downtown/port)
SE Massachusetts MPO
Fall River
New Bedford
Brightman Street Bridge Replacement and Rehabilitation of Existing Brightman Street
Drawbridge (Route 6 Bridges over Taunton River; principal local routes between port
areas on Fall River and Somerset sides)
Braga Bridge Structural Repairs (I-195 over Taunton River and State Pier/Battleship
Cove area; the principal regional access route to the port areas in Fall River and
Somerset)
Braga Bridge/Route 79/Route 138 Interchange (major project at $249 million; $170
million in state Accelerated Bridge funds plus normal FHWA/state funding; elevated
interchange and ramps define access to Fall River waterfront)
Route 18 / JFK Memorial Highway (upgrade of primary traffic route connecting port area
to Route I-195 and Route 6 Bridge)
New Bedford-Fairhaven Bridge Preservation (Route 6 over Acushnet River; principal
local route between New Bedford and Fairhaven waterfronts; 100% state)
Fisherman’s Wharf and Homer’s Wharf (electrification and lighting for intermodal boat-totruck transport of fish; funded through CMAQ)
Source: MassDOT interactive webpage for Projects in Design and Construction. 56
6.2.4
MassWorks Grants
The Program. MassWorks is a one-stop economic and community development infrastructure grant
program administered by the Executive Office of Housing and Economic Development (EOHED). It was
initiated by the Patrick Administration as an administrative consolidation of six older categorical grant
programs:
56
•
Public Works Economic Development (PWED);
•
Community Development Action Grant (CDAG);
•
Growth Districts Initiative (GDI) Grant Program;
http://www.mhd.state.ma.us//default.asp?pgid=content/projectsRoot&sid=wrapper&iid=http://www.mhd.state.ma.us//ProjectInfo/.
Revised November 8, 2013
24
Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
•
Massachusetts Opportunity Relocation and Expansion Program (MORE);
•
Small Town Rural Assistance Program (STRAP); and,
•
Transit Oriented Development (TOD) Program.
In 2012, the Legislature created MassWorks by statute and transferred to EOHED the remaining
unawarded balances from several prior Transportation bond bills for the PWED, STRAP, and TOD
57
programs. Any municipality may apply for a MassWorks grant, and the funding can be used for a wide
variety of public infrastructure projects in support of economic development, including the construction,
reconstruction and expansion of sewers, utility extensions, streets, roads, curb-cuts, parking facilities,
water treatment systems, and pedestrian and bicycle access.
Funding Levels. The legislation establishing MassWorks does not specify a funding level. As with all
Massachusetts bond-funded capital programs, actual expenditure depends on the combination of
authorized indebtedness and the administrative bond issuance cap established by the executive branch.
In 2011, EOHED awarded 42 MassWorks grants totaling $63.5 million. In 2012, 26 awards were made,
totaling $38 million. The largest recent grant was made to the City of Quincy for the relocation and
58
remediation of Town Brook, a key element in the revitalization plan for Quincy Center. For FY13, $53.6
59
million in bond cap has been allocated to MassWorks.
Status and Applicability. The MassWorks program is expected to conduct annual award rounds for the
foreseeable future. The program guidelines call for (among other targets):
•
50% more of total funding in support of developments in Gateway Cities (which currently include
New Bedford, Fall River, and Salem);
•
67% or more in support of developments within one-half mile of a transit station (defined in a way
that would likely cover at least part of the port study areas in all five Compact Ports;
•
80% or more in support of developments that reuse previously developed sites;
•
25% or more in support of projects consistent with regional land use and development plans.
60
Among the Port Compact cities, MassWorks Grants have been awarded to Gloucester for street and
infrastructure upgrades in connection with the approved Commercial Street hotel.
6.2.5
Massachusetts Clean Energy Center (MCEC)
The Program. The Massachusetts Clean Energy Center was established by the Legislature through the
61
Green Jobs Act of 2008. MCEC is a quasi-public entity designated by law as the Commonwealth’s lead
agency for the promotion and development of jobs in the clean energy sector, and has a broad array of
powers in research, marketing, promotion, and investment. MCEC is governed by a 12-member Board of
Directors chaired by the Secretary of Energy and Environmental Affairs, with the Secretaries of
Administration and Finance, Housing and Economic Development, and Labor and Workforce
Development among its ex officio members.
57
Chapter 238 of the Acts of 2012 established the MassWorks program in Chapter 23A of the General Laws.
58
http://www.mass.gov/hed/press-releases/massworks-quincy-groundbreaking.html.
59
http://www.mass.gov/bb/cap/fy2013/rec/agy/hecon_developecoeed.htm.
60
MassWorks Infrastructure Program, 2013 Program Guidelines, February 2013
(http://www.mass.gov/hed/economic/eohed/pro/infrastructure/massworks/guidance-documents/2013-massworks-infrastructureprogram-new-guidelines.pdf).
61
Chapter 307 of the Acts of 2008, which established the Center and its activities in Chapter 23J of the General Laws.
Revised November 8, 2013
25
Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
MCEC operates a wide array of programs in specific clean energy technology areas. It has taken a lead
role in the promotion of the offshore wind industry and in that context is acting as project manager and
funding partner for the $100 million New Bedford Marine Commerce Terminal, the purpose-built facility
now under construction at South Terminal to support the assembly and deployment of wind turbines. This
facility is the centerpiece of New Bedford’s state-supported initiative to become the construction and
operations port for Cape Wind and, if successful, for other offshore wind projects.
MCEC has at its disposal two related investment funds: the Massachusetts Alternative and Clean Energy
Investment Trust Fund, and the Massachusetts Renewable Energy Trust Fund which, as a result of the
2008 Act, receives all moneys collected annually by the Department of Public Utilities from electric power
62
companies for alternative energy development under the state’s 1997 utilities deregulation law.
Funding Levels. MCEC’s funding for programs and projects reflects the annual revenues derived from
the utility charge, as well as any appropriations or bond authorizations which may be made by the
Legislature. In addition to MCEC’s role in the South Terminal project, they offer over a dozen alternative
energy development and technical assistance programs, including Commonwealth Wind (which seeks to
expand local, land-based wind development projects) and Workforce Capacity Building (whose 2013
grants included an award to Bristol Community College).
MCEC is also able to make equity investments in private companies:
•
Growth capital investments that support the expansion of a clean energy company’s operations in
Massachusetts. These investments require significant job creation and economic development in
the Commonwealth. The investment structure and amount will depend on the applicant’s growth
trajectory and geography.
•
Venture capital equity investments in promising early-stage Massachusetts clean energy
companies that are developing and commercializing technologies that contribute to the
advancement of one or more of a long list of clean energy or energy efficiency categories,
including MassCEC makes seed venture investments of up to $500,000. All investments are in
the form of a suitable equity instrument, depending on the applicant’s circumstance.
Status and Applicability. MCEC’s various technical assistance programs are awarded through annual
competitive rounds. The growth capital and seed capital investments are considered on a rolling
application basis. MCEC’s programs represent a potential funding source for the on-going strategy to
capitalize on the New Bedford South Terminal investment through market business development. This
strategy involves all steps of the supply chain in both the construction and operations phases of offshore
projects, starting with Cape Wind and Deepwater Wind, which recently prevailed in the federal auction of
lease rights and has indicated an intent to use both New Bedford and Quonset/Davisville (RI) as base
ports. MCEC programs could also support other ports seeking to introduce alternative energy
technologies into their operations.
6.2.6
Financing Local Infrastructure: DIF, LIDP, and I-Cubed
Massachusetts law provides three related “value capture” programs for financing local economic
development infrastructure. All involve the issuance of tax-exempt bonds supported by pledged revenues
generated by a defined district within which the infrastructure investment is made. These programs are
62
Chapter 164 of the Acts of 1997, the state’s landmark deregulation law, established “a mandatory charge of 0.5 mill per kilowatthour for all electricity consumers, except those served by a municipal lighting plant which does not supply generation service outside
its own service territory or does not open its service territory to competition at the retail level, to support the development and
promotion of renewable energy projects.”
Revised November 8, 2013
26
Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
potentially applicable to infrastructure development in the five Port Compact study areas. The state’s
multi-purpose quasi-public development finance agency, MassDevelopment, is the bond issuer in the
LIDP and I-Cubed programs and may, at the request of the municipality, act as issuer of DIF bonds as
63
well.
The Programs:
6.2.6.1
District Infrastructure Finance (DIF)
The DIF program (Chapter 40Q of the General Laws) is Massachusetts’ version of traditional municipal
tax increment financing, using the local property tax. A municipality may place up to 25% of its land area
in a DIF district; may choose the percentage (up to 100%) of the district’s incremental revenues to
capture and dedicate to the DIF bond; and may maintain the dedicated revenue stream for a term of up to
30 years from a projected stabilization date. The DIF bonds are issued by the municipality or, at its
request, may be issued by MassDevelopment in its stead. Among the handful of DIF projects approved
and implemented to date are the major downtown revitalization programs in Worcester and Quincy, and
the Assembly Square project. While no port projects have yet used the DIF mechanism, it could be an
effective tool for industrial or mixed industrial-commercial projects in port areas, especially if developed on
vacant or underutilized land not currently yielding significant property tax revenues.
6.2.6.2
Local Infrastructure Development Program (LIDP)
64
LIDP is a special assessment district program enacted by the Legislature in 2012. It enables a
municipality to finance local economic development infrastructure through assessments on property
within the designated district, rather than through the tax increment. The district is created in response to
a petition by one or more developers, and cannot be approved and implemented without 100% consent
by all property owners within the district. Once approved and levied, the special assessments are
collected like property taxes for a term of up to 25 years. The tax-exempt infrastructure bonds are issued
by MassDevelopment.
6.2.6.3
Infrastructure Investment Incentive (I-Cubed)
65
I-Cubed was originally enacted by the Legislature in 2006. It is, in effect, a “state TIF”—a mechanism
whereby public infrastructure in an economic development district can be financed against future state
revenues, in the form of income and sales taxes to be generated by industrial or commercial development
undertaken as a result of the infrastructure investment. As in the case of the LIDP, a project financing
cannot be undertaken without the initiative of one of more private developers. The projected incremental
revenues must be shown, through an independent third-party analysis, to be net new to Massachusetts,
rather than the result of moving revenues from one municipality to another or counting revenues that
66
would have arisen anyway in the district or elsewhere in the state.
Under I-Cubed, tax-exempt infrastructure bonds are issued by MassDevelopment and secured by the
general obligation of the Commonwealth. However the debt service is paid by the developers during
construction (through assessments by the municipality, which reimburses the Commonwealth). Once the
63
http://www.massdevelopment.com/financing/.
64
Chapter 238 of the Acts of 2012 established the LIDP as Chapter 23L of the General Laws.
65
The program was enacted as Chapter 293 of the Acts of 2006 but could not be implemented until certain technical flaws were
amended, which was achieved by Chapter 128 of the Acts of 2008. The program was further amended by Chapter 238 of the Acts
of 2012, principally to expand its debt capacity from $250 million to $325 million.
66
In limited circumstances where there is compelling evidence that jobs would be relocated out of state without the project, the
related retained state tax revenue will be counted as if it were new for purposes of evaluating an I-Cubed financing proposal.
Revised November 8, 2013
27
Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
project is placed into service, the Commonwealth assumes the debt service, with the municipality as a
67
standby guarantor.
I-Cubed financings have a maximum of $50 million each (and a minimum of $10 million). Thus far,
Somerville (for Assembly Square), Quincy (for downtown), and Boston (for Fan Pier) have secured I68
Cubed approvals from MassDevelopment and the Executive Office of Administration and Finance. The
actual I-Cubed bond proceeds are used for public infrastructure, such as streets, sidewalks, water and
sewer pipes, or open space. Because the financing is based on incremental income and/or sales tax
yields, I-Cubed is suited for projects that are either job-intensive or retail-intensive.
Funding Levels. I-Cubed, as a state credit program, has a legislatively authorized limit in the aggregate
of $325 million, more than half of which will remain after the Somerville, Quincy and Boston projects. DIF
and LIDP have no aggregate limit, since each financing is a special revenue bond based on its own
projected tax increment or special assessment revenue stream.
Status and Applicability. All three infrastructure finance programs are in place and available. Each is a
challenge to use in a port project, unless a specific industrial or commercial development or set of
developments underlies the proposed infrastructure. Moreover, in a Designated Port Area, the range of
allowable permanent uses is itself limited. That said, these programs were enacted with industrial and
commercial development in mind and could prove applicable in one or more of the Compact Ports, either
in their DPAs or, where relevant, in non-DPA areas added to the scope of this study. Such non-DPA
areas include the South River Basin in Salem and the Hicks-Logan-Sawyer master plan area in New
Bedford.
6.2.7
Financing for Businesses: MassDevelopment
MassDevelopment’s role in infrastructure finance is an outgrowth of its broader mission as the
Commonwealth’s lead quasi-public authority for economic development investment. MassDevelopment
was created in 1998 by merging two predecessor agencies, the Massachusetts Industrial Finance Agency
(MIFA) and the Massachusetts Government Land Bank. MassDevelopment’s programs in support of
private business expansion and real estate development are generally applicable to port-related
investments. MassDevelopment issues tax-exempt and taxable revenue and development bonds, and
has done so, leveraging literally hundreds of millions of dollars in private investment, across the
Commonwealth.
MassDevelopment has also been assigned by the Legislature to undertake a variety of direct loan,
technical assistance, and specialized real estate development programs. Starting with its predecessor
agency, the land Bank, MassDevelopment has managed the Gloucester State Fish Pier on behalf of the
Commonwealth since the 1970s. MassDevelopment’s array of specialized loan funds includes the
Gloucester Revolving Loan Fund and the Southeast Regional Loan Fund, each of which can make direct
loans of up to 90% of project costs for business expansions, at amounts of up to $100,000 or, with
69
matching funds from a participant, $250,000.
67
http://www.mass.gov/anf/budget-taxes-and-procurement/cap-finance/i-cubed/overview-of-i-cubed.html and
http://www.mass.gov/anf/budget-taxes-and-procurement/cap-finance/i-cubed/final-regulations.html.
68
http://www.quincyma.gov/Utilities/news.cfm?news_story_id=317&action=print and
http://www.cityofboston.gov/Images_Documents/01%20Infrastructure%20Development%20Assistance%20Agreement%20(IDAA)_t
cm3-32683.pdf.
69
http://www.massdevelopment.com/financing/specialty-loan-programs/.
Revised November 8, 2013
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Ports of Massachusetts Strategic Plan
Technical Memorandum Number 6
MassDevelopment has been tasked by the Legislature with managing a substantial Brownfields
Redevelopment Fund, which offers financing for the assessment of abandoned or underutilized sites
where redevelopment is anticipated but discouraged by the prospect that the soil or groundwater may
have been contaminated by a previous use or by petroleum or hazardous materials from another
property. Site assessment loans and grants up to $100,000 are made from the Fund to private property
owners, prospective developers, municipalities, and entities such as redevelopment authorities. The site
assessment work is managed by a Licensed Site Professional who meets the standards set by MassDEP
for a license to work within the requirements of the Massachusetts Contingency Plan.
If contamination is found, the assessment may include the creation of a remediation plan that will prepare
the site for an anticipated redevelopment project. Remediation loans and grants may be made up to a
maximum of $500,000. If the redevelopment of a badly contaminated site is a high priority of the host
municipality, MassDevelopment may find the site to be a Priority Project, allowing for assessment and
remediation financing from the Fund up to a maximum of $2 million. The reserve for Priority Projects is
$13,481,335. Financing for the redevelopment of the site after the need for remediation has been met
may come from a variety of private and public sources, including one or more of the many financing
70
programs offered by MassDevelopment.
6.3
Summary
The array of federal, state, and local funding sources outlined in this Technical Memorandum were
selected for their current or potential applicability to the infrastructure and development needs of the
Compact Ports and their landside access networks. That said, certain clusters of programs are most likely
to be relied on as “workhorses,” while others offer new opportunities to meet emerging needs.
The “workhorses” include the following:
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•
The state’s Seaport Bond is the flagship, dedicated program for public capital development in the
Commonwealth’s ports. While Seaport grants have generally not been available as the sole
funding source for very large projects, the program has been able to make multi-million dollar
grants for a wide variety of seaport capital needs. Larger, project-specific grants can be
authorized by legislative language.
•
MassWorks can make capital grants at levels comparable to the Seaport Bond with broad project
eligibility and selection criteria that favor, in part, the port cities.
•
Massport is the capital and operational funding source for all of its Maritime properties, with
occasional support from federal programs. Massport’s largest currently contemplated port project,
the Deep Draft Navigation Improvement, relies on majority funding from the Corps of Engineers
under the Water Resources Development Act Reauthorization, pending at the time of this
Memorandum.
•
The nexus of the federal surface transportation programs, the MassDOT highway and bridge
programs, and the Boston and Southeast Massachusetts MPOs remains the principal method of
funding off-port landside access, as well as projects like the Chelsea Street Bridge Replacement
designed specifically to eliminate a navigational barrier caused by an older bridge. The largest
public projects in and around the port areas of the five cities are highway and bridge projects
funded through the normal FHWA/MassDOT/MPO structure.
http://www.massdevelopment.com/wp-content/uploads/2013/01/brownfields_annualreport_12.pdf.
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Ports of Massachusetts Strategic Plan
•
Technical Memorandum Number 6
The future of the TIGER program is uncertain, as is the level of award to be expected if the
program becomes secure and permanent. Because TIGER has been so over-subscribed, it is not
appropriately seen as a “workhorse” for the Ports Compact. However, the attraction of the
program is its gravitation to multi-modal, public-private projects with economic development,
safety, sustainability, and state-of-good repair attributes. Port projects are broadly eligible and
many have been funded across the US.
The emerging opportunities lie in two areas:
•
The trend to “finance” rather than “fund” public infrastructure investment is embodied at both the
federal and state levels. Federally, the expansion of the TIFIA loan and credit enhancement
program was a principal feature of MAP-21; TIFIA is applicable to any project that would be
eligible for federal highway or transit funding. The applicability of Private Activity Bonds to
intermodal projects may also benefit ports. At the state level, the trio of infrastructure value
capture programs—DIF, LID, and I-Cubed—is in its infancy; the need to use these programs and
expanding opportunities to do so are a foreseeable theme of local development efforts in
Massachusetts over the next decade.
•
The need to support capital formation for repair of aging private buildings and infrastructure, on
the one hand, and for innovative business and market development, on the other, is a theme that
has emerged consistently in the course of this study. MassDevelopment, the Massachusetts
Clean Energy Center, and perhaps other state development corporations can help address this
need in partnership with local and business leadership in each port community.
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