Reimagining Public Transit in Worcester - Route 0716

Today we take a look at reimaging the WRTA's existing bus routes Route 7 - City Hall to Washington Heights Apartments and Route 16 - City Hall to Lincoln Plaza via Hamilton St. & Lake Ave.



Current Bus Routes 7 and 16 Reimagined and Overlaid (Blue) on the proposed AIRLINE BRT System (Red), Visitor Trolley (Green) and other Proposed Bus Routes (Purple)

The proposed combined routes 7 and 16 function as a "South Loop" connecting a number of bus lines running east, south and west of downtown and connecting Union Station to Webster Square via the Canal District and South Worcester.

The current route 7 bus follows a twisted path southwest out of City Hall and provides front door service to the Family Health Center of Worcester on Queen St. (route 6 also serves the Family Health Center at Chandler St., 2 blocks away). Route 7 then travels south down Park Ave. (the only current bus route that travels any segment of Park Ave.) to Mill St., ending at Washington Heights Apartments.

The proposed 0716 preserves the Mill St. segment and extends this line further out Mill St. to June St., where it then travels the entire length of June St. to Newton Square.
 

Detail of West Side Segment of Proposed Bus Route 0716 (Blue) and Other Proposed Bus Routes (Purple)

 At Park Ave., the line is rerouted through Webster Square and then travels along Cambridge St., through Brosnihan Square and then along Harding and Water Sts. to Union Station. 



Detail of Webster Square to Union Station Segment of Proposed Bus Route 0716 (Blue) and Other Proposed Bus Routes (Purple)

Heading east out of Union Station, the line follows the current path of the route 16 bus up Grafton St. to Billings Square, east along Hamilton St., then north along Lake Ave. The proposed line terminates at the Lake Quinsigamond stop of the AIRLINE BRT system. The current route 16 bus continues on from here to Lincoln Plaza via Plantation St. I am working on a "North Loop" that will incorporate this segment.

Detail of East Side Segment of Proposed Bus Route 0716 (Blue) and Other Proposed Bus Routes (Purple)

Revs in Worcester: Nick Cuba Runs the Numbers

In a post last week I tried to guesstimate the 60 mi. radius populations for Worcester and Boston and invited anyone who might be able to develop a more accurate estimate to send me the data and I would do an update. Well, Nick Cuba, a grad student in geography at Clark University here in Worcester answered the call, and here's what his analysis shows. (For those interested in how Nick arrived at these numbers, see his explanation at **** below).


Above Courtesy of Nick Cuba

Turns out that at a 60 mi. radius, Worcester has a population greater than both Foxboro and Boston, by about 1 million people in each case. The populations are pretty much the same for all three markets at the 45 mi. radius. At the 30 mile radius, the Foxboro and Somerville populations are more than 2.5x greater that that of Worcester. Finally, the 15 mi. radius data shows that the Somerville population is 3x that of either Foxboro or Worcester. I made the map below showing all four circles around the Worcester market so I could see exactly what cities and towns were included in each circle.

The Worcester Market at 15, 30, 45 and 60 Mile Radii

My previous estimates led me to conclude that, assuming the market for the New England Revolution is a 60 mi. radius centered on the stadium, the Worcester market was about 1 million people less than the Boston market. Based on Nick's better estimated and updated data, it appears that the Worcester market is perhaps bigger than the Boston market by about 1 million people, further supporting the argument that a Worcester based stadium has just as large (if not larger) a population base from which to draw.

A key issue however that Nick's data points out is that the 15 and 30 mi. radius populations for Worcester are significantly below that of a Boston (and Foxboro in the case of the 30 mi. radius population) based SSS stadium location. The large 15 and 30 mi. radius numbers for a Boston based stadium are what make this location so attractive and the consensus first choice for the Revs. On the flip side, however, this density means that large parcels of available land at affordable prices are few and far between.

In his e-mail to me, Nick concluded "[t]he plausibility of a Worcester site seems almost totally tied to the question of how much of a "destination" sport (a la NFL) the MLS is." Given the above data, I too believe that success in Worcester would require the market to think of a Worcester SSS as a "destination." While the MLS (and the individual teams themselves) no doubt hold a lot of influence in developing this "destination" brand for the MLS as a whole, we cannot forget the significance that PLACE (city and stadium) contributes to this "destination" equation.

My earlier Parade to the Pitch post is one example of how Worcester in general and the Wyman-Gordon parcel specifically offers a unique PLACE for the development of a successful SSS destination for the Revolution. Future posts will further explore this idea.


**** Nick's discussion behind the numbers: "Attached is a table/chart showing population (census 2010 towns) by radius distance for Worcester, Somerville, and Foxborough sites. I got a little more interested as I started and so analyzed market size at 15, 30, 45, and 60 mile radii. Even though Boston is the hub of hwys e.g. 90, 93, 95, the difference between these results and one based on drive-time along roads may not be substantial. Worcester isn't as well connected as Boston, but it's pretty much a straight shot from Hartford and Springfield, which are the reasons why it's top end figure here is higher than the other sites.

Since there are a few cities which are outliers with respect to population (e,g, Boston, Worcester, Providence) somewhat arbitrary methodological choices may be highly consequential. FWIW I counted a city's population toward a site's market if the city's geographic center was within the radius (actually clipping towns by the circle would have taken longer; that method of extraction also rests on the assumption that population is distributed equally throughout a town, so it's unclear if it would even be any more accurate). I've attached another image (below) which should illustrate what I did."

Above Courtesy of Nick Cuba



Could Worcester's Junction Shops Become a Hot Bed for Video Game Design?

The title of this post is derived from a recent article in the Boston Globe, Is Worcester a hot bed for video-game design?, which mentions that Worcester's Becker College and WPI again ranked in the Top 10 of US schools for studying video game design.

I attended the MA Creative Economy Council meeting held at the Hanover Theatre a few weeks back. Among other items discussed, Becker College president Robert Johnson briefly talked about the tremendous growth of the video game design industry in recent years and highlighted MA and Worcester's emerging leadership role in this area. Becker's Tim Loew, Director of Academic Planning & Operations, then briefly discussed efforts to get the MA Video Game Institute (VGI) - a partnership between industry, academia & government to promote and nurture the development of the video game design industry in MA - open for business on Becker's Worcester campus by this fall.

I think starting the MA VGI at Becker is the right move, right now this incubator needs to be incubated. Given Becker's reputation in the field and the leadership and initiative they have demonstrated in this area lately, Becker makes for a good match. Thinking a few years out, however, if the MA VGI is indeed successful and needs significantly more space for expansion, where and how will it expand? There is where I think that Worcester's Junction Shops present a really exciting opportunity for the MA VGI.

The Junction Shops consists of three parcels totaling approximately 4.6 acres of land with a FY 2011 assessed value (which, in MA, is theoretically the same as the market value) of $1.1MM. The largest parcel, at 2.8 acres, contains 200,000 SF + of historic and mostly vacant multi-story industrial space. The other two parcels, one across Beacon St. and the other across Jackson St. from the main parcel are presently undeveloped.

The Junction Shops Property (Brown) in Worcester, MA

This is a good sized property, but one feature it lacks is frontage on a main road. Given all of the troubles lately with the Platinum Premier club here in Worcester, perhaps they may be interested in selling their property? The Platinum Premier parcels lie between the Junction Shops and Southbridge St. and offer more than 350 ft. of frontage along Southbridge St., a major downtown Worcester artery. The three parcels (owned by two different entities which I assume are ultimately controlled by the same individual/entity) total approximately 2.1 acres of land and have a FY 2011 assessed value of $999,000.

The Junction Shops (Brown) and Platinum Premiere (Yellow) Properties in Worcester, MA

I like the idea of making Southbridge St. the primary address and front door to the world for the Junction Shops. I believe that most Worcesterite's don't feel strongly one way or another about Southbridge St., it's just another street in downtown Worcester. In fact, between the Hanover Theatre, Guertin Graphics & Awards, Union Music and Coney Island, which combined draw 1000's of city and suburban visitors a month to the street, I would argue that most people have a somewhat positive image of the street. The benefits associated with this apparent neutral image are twofold: 1) you don't have to undo a negative image, and 2) you can promote and develop a positive image that suits the area's overall development goals.

Combined, the Junction Shops and Platinum Premier parcels offer 6.7 acres of land and 200,000 SF + of historic multi-story industrial space with a FY 2011 assessed value of $2.1MM. Long term, I support the development of a dense urban district developed following smart growth principals, but near term I am well aware of Worcester's love for their car and convenient parking. So, as a first step in the redevelopment process, I would suggest starting out with surface parking on the outer lots.

The Junction Shops Buildings (Brown) and Proposed Surface Parking (Yellow)

The proposed parking lot parcels total approximately 3.9 acres of land. A full size parking space is 10 ft x 20 ft, or 200 SF, plus lets say another 200 SF per space for circulation (the lots are odd shaped which typically results in a very inefficient parking lot), so a total of 400 SF per parking space or 109 parking spaces per acre. At 3.9 acres, we would be able to park approximately 425 cars. Worcester general parking requirements for office are one space per 300 SF of building, so 425 spaces allows us to develop 127,500 SF of the approximately 200,000 SF available for redevelopment as-of-right. Make the spaces a little smaller, which is standard in surface parking lots in urban area, and you could probably pick up another couple of dozen parking spaces.

The New England Revolution in Worcester: Just How Big is the Worcester Market?

One of the arguments for moving the New England Revolution to a SSS in the Boston metro area is so that the stadium is close to the Boston market area, the largest and most densely populated market in New England. I want to go on record and say that I do believe that the metro Boston area is indeed the preferred choice for siting a SSS stadium for the Revolution, but I am also aware of the real challenges facing the Kraft's in making this a reality. Large tracts of land are scarce and land prices are high, and other factors such as community support (or opposition), politics, etc. are all in play.

My objective, then, is to encourage thoughtful exploration of a Worcester alternative, where large tracts of urban land are available and land prices are relatively inexpensive. Community support (or opposition), politics, etc. will also be a factor in Worcester, however, its too early to know whether these factors will work for or against a Worcester alternative. Some have commented that a move to Worcester would make the Revolution a small market team, and often cite the city only population of 181,000, implying that this is the market for a Worcester based MLS team. What is the market for a MLS team based in Worcester, and how does this market compare to the market for a Boston based MLS team?

I can't find much information on how professional teams determine and/or analyze market areas. It's not all of New England, because I doubt may northern New Englanders get to the games, and it's not just CT, MA and RI, because southeastern CT, while technically a part of New England, functions more as a metro NYC market and the southern New Hampshire is large enough today so that it should not be ignored. The market is also larger than just the city or town that the stadium is located in. The market is also larger than just Worcester County, which I assume is the target market for the local minor league professional teams - the Worcester Sharks and Worcester Tornadoes.

So, for the sake of discussion, I'm going to assume that the market area for a New England Revolution MLS team is anywhere within a 60 mile radius of the stadium. Assuming the stadium is located in an urban area with good highway access, this generally equates to anyone living within a hour and a half drive of the stadium. Why do I think people would be willing to drive up to an hour and a half to a Revolution game? One big reason for this is because that's what fans are already accustom to with the stadium in Foxboro. But setting that aside for a moment, the Revolution play just 18 home games per year, and if this year's schedule is typical, 14, or almost 80% of those home games are on the weekend (13 of these 14 games are scheduled Saturday evening matches), with just four Wednesday evening matches scheduled for the summer months. So not only is there relatively few home games per year in MLS soccer, but a majority of these games are scheduled for a Saturday evening, when most people are not working, kids are not in school, and people generally are more willing to travel outside of their normal, everyday routes. This is not the case with the Red Sox (81 home games per year), the Bruins (41 home games per year) or the Celtics (41 home games per year), who, because they play at least twice as many, if not four times the number of home games, play a good percentage of their games in the evening during the week, and having a stadium located in the heart of the densely populated Boston market is indeed necessary.

So how does the 60 mile radius market for Worcester compare to that of Boston?

Map of Southern New England and 60 mi. Radius Circles Centered on Worcester (Red) and Boston (Blue)

To summarize, we lose the New Bedford market (barely), but pickup the Amherst-centered Five Colleges area, Springfield and Hartford (barely) markets. I tried to find some population data for a 60 mile radius centered on Worcester. The best I could do was an estimate from a City of Worcester website that states that 6 million people live within a 50 mile radius of Worcester. The best I could do for a Boston 60 mile radius was to use the Boston Combined Statistical Area that the Census Bureau uses. The Boston CSA adds the Worcester, RI and southern New Hampshire areas to the Boston market and gives us a total Boston market of about 7.4 million people. (These numbers are a few years old. Given my assumptions, I'm guessing I'm probably shorting Worcester somewhat in this comparison. If anyone reading this has access to a database that will provides population by radius data, please send me the numbers and I will update.)

Now keep in mind we are trying to fill a stadium of lets say 22,000 people. So a stadium in the Boston area would need to capture 0.30% of their total population to sellout. Now the Worcester population is lower, so we are going to have to capture a larger percentage here, or 0.37%.  Put another way, in order to sellout in the Boston market, we would need to get 3 out of every 1,000 people in the market to the game. Move the stadium to Worcester, you would need to get just one more of those 1,000 people, or 4 out of every 1,000 to the game to fill a stadium.

Ride the Train to the Revolution Home Opener at Wyman-Gordon Field in Worcester

(Note: The train service to New England Revolution games discussed in this post is fictional. If you really do plan to attend the Revolution home opener in Foxboro this Saturday, March 26, 2011, and have come to this page looking for MBTA service from Boston or Providence, you are out of luck. Unlike Patriots games, the MBTA does not provide service to Gillette Stadium for Revolution games. Check out the Revolution website for driving directions to Gillette Stadium.)

This blog's most popular topic by a large margin are the posts discussing the development of a soccer specific stadium for the New England Revolution on undeveloped land owned and presently listed for sale by Wyman-Gordon in downtown Worcester.


The Pitch at Wyman-Gordon Field is Proposed for a large Undeveloped Parcel Owned by Wyman-Gordon and Located Just South of Downtown Worcester, MA (DCU Center is at top center of image)

 If an urban soccer stadium in Worcester is going to be successful, I believe that passenger train service to the games from Boston is a must, and service from Providence and Springfield, while not a must, would likely boost attendance and significantly reduce auto congestion and parking challenges downtown during events.

Proposed Passenger Service from Boston, Providence and Springfield to Worcester for Revolution Games at Wyman-Gordon Field

Let's take a look at each of these three lines in more detail starting with the Boston segment.

Boston

Proposed Passenger Service from Boston to Worcester for Revolution Games at Wyman-Gordon Field

The Boston line is actually two trains - one that departs from South Station and one that departs from North Station. Originally I was thinking that each train could depart at about the same time and couple up at CSX's Allston Yard for the trip to Worcester. Alternatively, we could have two trains of three cars each that depart at different times. (These special trains would be in addition to regular service to Worcester out of South Station, presently 12 round trips during the week and 5 round trips on the weekends, which is expected to increase to at least 20 weekday round trips by September 2012 when CSX relocates it's Allston Yard operations to Worcester). Let's use this Saturday's 4:30 pm game as an example. Let's assume we can get the trip down to one hour (more on this below). So we could have an early train, say a 1:30 pm train that departs North Station (direct connection to the Orange and Green lines) and arrives at Worcester's Union Station at 2:30 pm. This would get Boston area visitors to the game in time for the gates to open or allow sufficient time to meet up with friends or family for a meal and drinks Downtown, perhaps in the Canal District or on Shrewsbury St. We could then offer a late train, say a 2:30 pm train that departs South Station (direct connection to the Red Line) and arrives at Worcester's Union Station at 3:30 pm, just in time to join the Parade to the Pitch.


Boston Detail (South Station Line is Dark Green, North Station Line is Light Blue) of Proposed Passenger Service from Boston to Worcester for Revolution Games at Wyman-Gordon Field

Each line out of Boston will also have one urban stop, the North Station line will stop at Cambridge/MIT (connecting with the Red Line just two blocks east at the existing Kendall Square/MIT Station) and the South Station line will stop at Back Bay which provides for a direct connection to the Orange Line. The trains would depart Worcester following the game in a similar staggered fashion. One option could be the North Station train departing 30 minutes following the conclusion of the game and the South Station train departs 1 hour and 30 minutes following the conclusion of the game.

The next stop on the Boston line is proposed for Wellesley Hills/Route 128.
  

Wellesley Hills/Route 128 Detail of Proposed Passenger Service from Boston to Worcester for Revolution Games at Wyman-Gordon Field

The Wellesley Hills Station provides an option for metro Boston residents who don't necessarily have easy access to public transit, but can easily get to Route 128 by car. This stop is ideally located at the intersection of Routes 9 and 16, less than 2 miles southwest of the Route 16 exit off of Route 128. The challenge with this location is limited parking (just 51 spaces). One solution that offers potential here is to direct passengers to park at the existing 925 space lot at Riverside (end of D Branch of Green Line and just off Route 128 on Grove St.) and the T can then shuttle passengers by bus the approximately three miles to the Wellesley Hills Station.

The final stop on the Boston line to Worcester is in Framingham. This stop is a convenient option for MetroWest residents who would prefer not to drive to downtown Worcester.


Framingham Detail of Proposed Passenger Service from Boston to Worcester for Revolution Games at Wyman-Gordon Field

I spoke earlier about a one hour ride between Boston and Worcester, is this really possible? The Wikipedia page on the Boston & Albany Railroad lists the mileposts for the mainline. Worcester's Union Station is 44 miles from South Station. We have three stops (Back Bay, Wellesley Hills and Framingham) of let's say 5 minutes each, which leaves us 45 minutes of actual travel time to meet the one hour goal. Therefore, the train would need to average about 59 MPH to get to Worcester in one hour. This certainly seems feasible to me once the MBTA controls dispatching along the line.

Providence

Proposed Passenger Service from Providence to Worcester for Revolution Games at Wyman-Gordon Field

Service would start at the existing MBTA Station at TF Green Airport. Not only is the direct connection to TF Green itself convenient, but the station is convenient for Providence metro south residents who would arrive by car: it offers a 650 space parking garage and is just 1 mile off of Interstate 95. The train would then travel along the MBTA mainline with a stop at the existing station in downtown Providence and then at a TBD stop in Pawtucket, before it leaves the MBTA mainline and heads towards Worcester on the Providence & Worcester mainline. The final stop on the Providence line would be at a TBD location in Woonsocket.

Because the Providence line would travel mostly along the Providence & Worcester mainline, it is likely that the P&W would be the operator of this line. The P&W owns a number of working passenger coaches, running a number of special passenger excursions out of Worcester, including, I believe, a train or two out of Worcester to the Roger Williams Park Zoo in Providence. Because the line is not regularly used for passenger service, I'm not sure the train could safely sustain speeds of 60 MPH like the Boston line. But let's say it can achieve average average speeds of 40 MPH. The line is about 46 miles in length, so at 40 MPH we are looking at about 69 minutes, plus 15 minutes for three station stops, resulting in a total trip time of about 1 hour and 25 minutes. Assuming a 4:30 pm start, the train might leave TF Green at 2 pm, arriving at Worcester's Union Station at 3:25 pm.

Springfield

Proposed Passenger Service from Springfield to Worcester for Revolution Games at Wyman-Gordon Field

Springfield service would start at the existing Amtrak station in downtown Springfield. The only proposed stop on the Springfield line would be at a TBD location in downtown Palmer. The Palmer location is convienent for auto users as it is less than 2 miles off of Exit 8 of the Mass Pike and is a convienent connection to the Five Colleges area centered around Amherst. (The Five Colleges together with the PVTA operate an impressive free shuttle service connecting the colleges, I'm sure if there were enough interest, the PVTA would run a Revolution shuttle between Amherst and Palmer, connecting with the Springfield train).

Regarding what entitiy might operate this service, my first thought would be the MBTA. This could certainly be feasible if the T did extend service to Springfield, but this idea looks like it is many years away from becoming real. What looks more likely however, is to utilize the equipment that would be part of the planned New Haven to Springfield commuter rail line. This service, which is projected to commence in 2020, would normally terminate at Springfield, but perhaps we could have one train continue on to Worcester for Revolution games. This direct one seat connection to the Springfield, Hartford and even New Haven markets would make traveling by commuter rail from these areas to Worcester a viable alternative to traveling by car.

According to the Wikipedia page on the Boston & Albany Railroad, the distance between Springfield and Worcester by train is about 54 miles. We only have one stop on this line, so we have 55 minutes to complete the trip. This results in a minimum average speed of 59 MPH in order to complete the trip in one hour. Amtrak Lake Shore Limited trains presently make the run between Springfield and Worcester in about 1 hour and 10 minutes (no intermediate stops), so achieving a one hour goal certainly seems feasible.

Worcester

Once at Worcester's Union Station, visitors could complete their trip to the pitch by a variety of means. One option would be to walk the 1/2 mile throught the Canal District, perhaps even participating in the pregame Parade to the Pitch. The second option would be to jump on a historic Worcester built Osgood Bradley trolley which travels to the pitch through the Canal District via Kelley Square. The third option is to take the AIRLINE BRT towards ORH and get off at the first stop, Junction District, which allows you to enter the pitch from Madison St.

Those Arriving by Train at Union Station Would Connect Directly to Either the Proposed AIRLINE Bus Rapid Transit System or the Visitor Trolley for Service to Wyman-Gordon Field

Detail of Wyman-Gordon Field, Transit Connections and Proximity to Interstate 290



Reimagining Public Transit in Worcester - Route 1114

Today we take a look at reimagining the WRTA's existing bus routes Route 11 - City Hall to The Fair Plaza via Vernon Hill and Greenwood St. and Route 14 - City Hall to Showcase Cinemas/Holden via Burncoat St.


Current Bus Routes 11 and 14 Reimagined and Overlaid (Blue) on the proposed AIRLINE BRT System (Red), Visitor Trolley (Green) and other Proposed Bus Routes (Purple)

 The proposed routes are quite similar to the existing routes, with a few exceptions. At the Summit, the reimagined route does not serve the Showcase Cinemas as it does presently. I am working on an outer ring bus loop that will connect to this line (and others) and provide service to the Showcase Cinemas.

Downtown Detail of Proposed Bus Route 1114 (Blue)

Downtown, the line travels along a proposed return to the historic ROW through Lincoln Square for Summer St. and Lincoln St. Presently, Route 14 does not serve Lincoln Square, instead running east of the square and under Belmont St./Route 9, connecting Lincoln St. to Summer St. via Goldsberry St. The current line does not continue along Summer St. to Union Station, however. At MLK Jr. Blvd./Central St., the route turns west towards Main St. and then heads towards City Hall. In the proposed revised routing, the line provides for a direct bus connection from Lincoln Square to Union Station via Summer St.

Worcester's Junction Shops: $11MM Reasons Not to Demo the Building (or, Historic Tax Credit Financing 101)

In just one week from today, the demo delay currently in effect will expire and the owner of the historic Junction Shops on Beacon St. (circa 1851) will be allowed to apply for a demo permit. This is a big building, and I'm sure there are a number of environmental issues that would have to be addressed as part of any demo, so it is my hope that the significant cost of demo alone will be enough for the owner to continue along his current "do nothing" approach to the property. But I'm not willing to put all my eggs in this basket, so here's another reason that the buildings should not be demolished: demolishing this historic structure (or even just part of it, see story on Preservation Worcester's efforts to save the old Worcester State Hospital Clock Tower, which is all that remains of this once expansive collection of historic buildings) will eliminate the possibility of $11MM in historic tax credit equity that could be applied towards the redevelopment of these structures.

Demolition of the Former Crompton & Knowles Factory Complex at 95 Grand St. is Presently Underway, is the Historic Junction Shops Next on the Demo List? (Image from T&G)

Both the federal government and the Commonwealth of Massachusetts award tax credits to property developers who agree to preserve and/or restore designated historic buildings such as the Junction Shops. The National Park Service (NPS) administers the program in partnership with the IRS at the federal level and the Massachusetts Historical Commission (MHC) in partnership with the MA Department of Revenue administer the program in MA. In both cases the tax credit is equal to as much as 20% of the total costs spent on the historic building (anything spent on the building counts - windows, roofs, electrical and heating systems, etc., all count, but things outside of the historic building, such as a new addition or the cost for the parking lot do not count) and the design is subject to MHC and NPS review and approval both before and following completion of construction.

The federal credit is "automatic." In other words, if you satisfy the design requirements, you automatically earn a federal tax credit equal to 20% of your total actual costs spent on the historic building. For the MA credit, in addition to satisfying the design requirements, you must request an allocation of credits in order to earn the credits. For example, let's say you have a project with $10MM in qualifying costs which at 20% means you could potentially get a credit equal to $2,000,000. However, if MHC has only allocated your project $500,000 in credits, that's the maximum amount your project can use. MHC awards $50MM in credits annually, and applications are accepted three times a year.

Once your project has earned the credits, your almost there, the final step is to convert those credits into cash you can use to pay for the project's expenses. In bigger projects where the credits can climb into the millions of dollars, the typical arrangement is for the property developer to partner with a tax credit investor who agrees to "buy" the credits in exchange for cash. Typical buyers include large insurance companies such as UNUM and AEGON, and national banks such as Bank of America and others. Now these investors buy these credits at a discount, say $0.85 for every dollar worth of credits, so a project that generates $2,000,000 in credits will yield $1,700,000 that can ultimately be put towards the cost of the project. Yes, I know it's complicated. But when we are considering a net cash infusion of as much as $1.7MM into a $10MM plus project, it's well worth the hassles.

Following the above process, here's the math for the Junction Shops:

• The building is approximately 200,000 SF in size. Let's say hard costs (i.e., just construction costs) to rehabilitate the building are $150 per square foot plus an additional 20% of that number, $30 per square foot, for soft costs (i.e., lawyers, permits, taxes, insurance and interest during construction, etc) resulting in a total cost of $180 per square foot or $36MM.
• Of that $36MM, let's say 90% of that number, or $32.4MM, is for costs related to the historic building and not additions, parking lots, etc.
• Both the MA (for the purposes of this exercise let's assume we get a full 20% allocation from MHC) and federal credit are then calculated at 20% of this number or $6.48MM each or a total of $12.96MM in state and federal tax credits.
• Finally, we need to convert these credits into equity that we can use to pay project costs. Let's assume our investor, Acme Corporation, fresh off a banner year selling rocket powered jet packs to cartoon coyotes all across the west is facing a large tax liability. They agree to buy our credits for $0.85 per $1.00 of credit, which means they pay less in taxes and we realize about $11MM in equity that we can use to help cover project costs.

Assuming we paid $1MM for the property, that $11MM in equity will pay for 30% of the total development costs for this project, not a bad start in my book! That is, of course, assuming the building is still around to be redeveloped.