Westwood agrees to share risk in development plan

Westwood Town Meeting in May cleared the way for $55 million in state funding for a development project located at the Westwood commuter rail station and Interstate 95 by agreeing to share in the risk for a small portion of that amount.

The state will fund infrastructure improvements related to the Westwood Station project, the scope of which is now much smaller than what was envisioned prior to the sharp economic downturn in late 2008. The $55 million includes $6 million from the state infrastructure improvement program known as “I-Cubed.”

The state expects to recoup the $6 million through sales and payroll taxes generated by the project. If tax revenue is insufficient to pay back the $6 million, however, I-Cubed regulations require the town eventually to be responsible for the remaining debt.

Town Administrator Michael Jaillett described the risk as minimal, and there are a number of mechanisms in place to protect the town. Several state agencies must approve the project’s revenue projections, and the developer must maintain a reserve fund equal to twice the annual debt service. Westwood also will have lien power over the property.

Even in a worst-case scenario, Jaillet said, the reserve fund and other mechanisms would protect the town from owing any money for about 10 years.

In its pared-down form, Westwood Station is expected to consist of 450,000 square feet of retail and restaurant space, down from the original proposal of 4.5 million square feet, which would have encompassed residential and office space as well.

But even in its more modest incarnation, the development is projected to generate a net increase in property taxes for the town of $1.3 million per year, Jaillett said.

The state funding is contingent on the project getting under way by this fall.

“The town has done everything it can to put the project where it can go forward,” Jaillett said. “Now it’s up to the developer to put forth a plan.”