METRO WEST DAILY NEWS — In the decade since the Great Recession, the number of economic development success stories in Marlborough has grown at an enviable pace.
Tax revenue is up, and the city’s vacancy rate, which stood above 30 percent, has been cut in half over the past six years. Unemployment is at a record low, and the city can point to several major developments underway.
Among them are the 109-acre mixed-use Marlborough Hills project, new housing in the southwest portion of the city, and the $160 million Apex Center development, which will bring some 20 businesses to a sprawling complex on Rte. 20.
For Meredith Harris, executive director of the Marlborough Economic Development Corp., a quasi-public nonprofit formed in 2006 to help steer the city’s economic development efforts, there’s much to celebrate.
But the rising tide of redevelopment has yet to be felt in some portions of the city. This year, Harris and others are renewing their focus on the neighborhoods that stretch north from Marlborough’s downtown, including Lincoln Street and French Hill.
The area is the most diverse in the city, and has one of the highest proportions of people of Brazilian and Portuguese ancestry in Massachusetts. Portions have also been designated a “food desert,” meaning they are home to low-income residents who lack easy access to supermarkets.
Developers have eyed French Hill for major projects in the recent past, but found the costs of construction to be too high. Many existing properties are in poor condition. Others are tarnished by pollution. Cleanup work, rehabilitation or demolition would slash the potential profits.
But in Marlborough and other cities working to rebound, a new federal program may change the economics of redevelopment. To help spur investment in distressed communities, the $1.5 trillion tax cut package passed by Congress last year offers tax incentives for projects started in certain low-income areas, dubbed Opportunity Zones.
Massachusetts recently submitted a package of 138 potential areas for inclusion in the program, including portions of Marlborough and Framingham. City officials hope the new perks will make struggling areas more enticing for redevelopment.
“We’re hoping that this will help unlock some private investment to continue on with the effort that we’ve been doing up there,” Harris said.
What are opportunity zones?
Created under the new tax law passed in December 2017, the Opportunity Zone program aims to spur private investment in low-income communities. It allows investors to defer taxes on a portion of their prior capital gains in order to invest the money in a distressed neighborhood.
As an additional incentive, the federal government will not tax the income investors receive from selling a project in a qualified area, as long as the investment was held for at least 10 years.
Governors across the country were allowed to nominate up to 25 percent of eligible census tracts within their states for inclusion in the program. Massachusetts submitted 138 tracts for consideration — the maximum allowed under the new tax law.
“The opportunity zone program helps leverage private investment in Massachusetts cities and towns and can be a catalyst for job creation and economic activity,” Gov. Charlie Baker said in an announcement. “I look forward to working with our congressional delegation and local officials to support these new economic development opportunities across the commonwealth.”
Of the 110 communities in Massachusetts that were eligible to nominate tracts for the program, most — including Framingham and Marlborough — were allowed to select up to two tracts for inclusion. State officials reserved a higher share for cities with more impoverished areas. Ten percent of the designations were also set aside for small, rural communities.
In order to be eligible, tracts must meet the federal definition of a low-income community. Neighborhoods surrounding low-income tracts are also eligible, but only if the median income of residents there is similar to the median income in the neighboring area.
Focus on South Framingham
In Framingham, seven tracts were eligible for the program, encompassing most of downtown and the land south of the Mass. Turnpike.
City officials nominated a pair of contiguous neighborhoods on the southeast side of the city, which has struggled to rebound from the decline of manufacturing and the legacy of environmental contamination in the area.
Near the Natick border, one tract houses a mix of residential and commercial properties, including junkyards, auto repair shops and industrial suppliers. It includes a large concentration of subsidized housing, and nearly all of its 5,645 residents are low- or moderate-income.
Farther south, a second tract includes a significant amount of industrial land, including the state prison and the former General Motors plant, which is now the site of Adesa, the vehicle auction house.
An action plan created by the city last year lays out suggested improvements for the area, including the development of more open space, affordable housing and amenities.
City officials are eyeing a number of potential benefits to the tax incentive program, particularly in transforming the Waverly Street corridor. The area that stretches east to the Natick border is lined by auto dealerships, drive-throughs and other businesses that take up a lot of space, but don’t offer much in the way of amenities for residents, such as banks, pharmacies or grocery stores.
“Redevelopment along that corridor could bring such uses, enhance walkability, and — over time — contribute to defining a commercial corridor linking downtown Framingham to Natick center,” the city’s application reads. “The eastern gateway is approximately one-third of a mile to the West Natick train station, which may present additional transit-oriented development potential.”
The city also hopes to court a business incubator or accelerator, a use that would benefit from low rents in the area and buildings with existing manufacturing infrastructure. Startups would also have easy access to bus and rail transportation, and could benefit from Framingham State University’s Entrepreneurship Innovation Center.
More for Marlborough
Marlborough’s two qualifying census tracts encompass the historic downtown village, parts of the French Hill neighborhood, the Rte. 20 corridor and areas farther east and west zoned for industrial, business and residential use.
Marlborough’s previous efforts to spur growth include offering an expedited permitting process and establishing an overlay district that allows for mixed-use development downtown.
The city is already seeing interest in sites within the two tracts, including proposed developments at the Rowe Funeral Home at 57 Main St., and at 163-175 Main St. — a park that was once the site of a building destroyed by a fire.
Harris said the new owner purchased the pocket park and two parcels next to it, and plans to build a mixed-use building with restaurant space, shops, parking and a mix of condos and apartments on the upper floors.
Harris said she hopes the Opportunity Zone program will create the incentive for similar projects to get underway.
“It’s obviously a great opportunity for future investment, job creation, and certainly will help with revitalization efforts for Marlborough in particular,” she said.
This article by Jim Haddadin originally appeared here.