On December 5, 2023, Cambridge Waterfront Development, Inc. provided the Dorchester County Council with an update on the Cambridge Harbor project. The presentation included a section on a possible funding source for the endeavor: tax increment financing. This was not a proposal yet, but CWDI Executive Director Matt Leonard and his team are working on one now.
“It’s essentially a tool that a city or county can use to fund public infrastructure improvements and expansion to incentivize private development,” Leonard said of TIF. “It’s one of the things that cities often do. If they need to increase the opportunities for private investment, they will extend their infrastructure or improve their infrastructure, increase the capacity.”
Whatever the TIF funds must belong to the public, it is not for private development. The Cambridge Harbor project is being constructed in two phases. Phase 1 goes from the boat ramp west to Cambridge Creek and includes an expansion of the Yacht Maintenance Company. Also planned for Phase 1 is a boutique hotel, which CWDI is still negotiating for. According to Leonard, this phase will bring in $55 million of investment and create around 100 new jobs, so a TIF is not necessary for it.
“Phase 2, everything east of the boat ramp over towards the visitor center is the larger portion of the project,” he said. “That’s mixed-use retail and residential, and that’s going to require somewhere around 22 to 23 million dollars of public infrastructure roadway expansion and improvement. That’s what we need the tax increment financing for.”
CWDI’s proposal to the county and city will go like this: the city of Cambridge establishes a tax increment financial (TIF) district. The Cambridge Harbor project would be the boundaries of that district. It then creates an area where, when tax generating properties are developed, the property and hotel taxes from there go to help finance debt service, which is the TIF bonds.
“Of course, CWDI is very mindful to maintain the public spaces, as well,” said Leonard. “We’re going to have public parks and gateways and walkways and bikeways all along on the water. We’re very careful to make sure that does not go to a private developer.”
CWDI has calculated that the proposed TIF bonds would bring in $22.5 million, which is most of what is needed to build the public infrastructure for Cambridge Harbor (minus one million dollars, which Leonard is confident they can get from other sources). The belief is that, once the infrastructure is in place, private investments will come in for the various types of mixed-use properties.
Of the new taxes generated, Cambridge would receive about $40 million over the 30 years of the TIF. The city’s portion of the debt service would be around $30 million, giving the city a net of $10 million. Dorchester County would net about the same amount, as they would gross $41 million and pay $31 million toward the TIF. According to Leonard, other fiscal impact benefits would bring the city an additional $4 million and the county $6 million.
Leonard would like the council to approve the TIF district at Cambridge Harbor this year. Phase 2 of the project, which would require the TIF, wouldn’t begin until 2026, at which time the bond would be issued.
But some people are concerned about this proposal, including Cambridge Mayor Steve Rideout, who remembers another project that ended up costing the city dearly.
“Back when we built the fire department and the police building,” said Rideout, referring to the Edward Watkins Complex, “it was on the basis of where we’re going to have a lot of development happening out in the city with all of these townhouses and condos and what-not that were going to be built. And so the city went in and signed off on a bond to build the police department and fire department.”
“And then the townhouse buildings didn’t come because the  recession came,” he continued. “We were all in on building the building, the bond was there, and we were paying out over half a million dollars a year in taxes on that building and for the marina where we were getting little or no income from new townhouses because the new townhouses weren’t being built.”
As CWDI’s proposal hasn’t been presented yet, it could be a while before we learn the council’s position on the TIF idea.