$12+ Million MassDevelopment Financing Spurs Innovation District Jobs & Development
March 5, 2012
MassDevelopment has provided $8.25 million in New Markets Tax Credit allocation and a $4.1 million loan to 5 CC Investment Fund, LLC, which will use the financing to buy and renovate 5 Channel Center in Boston. The 50,000-square-foot building is part of a 1.5 million-square-foot mixed-use development in Boston's Seaport District, located in the City's designated Innovation District. Connecticut-based real estate firm Commonwealth Ventures is the project sponsor, and Fraunhofer Center for Sustainable Energy Systems (CSE) of Massachusetts is the future occupant for this project, called the Building Technology Showcase.
Once renovated, the building will house advanced, building-integrated clean energy research laboratories for Fraunhofer CSE, which tests and evaluates products and technologies for partners in industry and government. As part of this project, Fraunhofer CSE is incorporating and researching sustainable products and technologies contributed by leading manufacturers and distributors.
As a result of this project, the Center will move its 45 staff members to the Innovation District, and expects to add at least 15 more jobs over the coming year alone – with additional job growth over the coming years.
“Dedicated and focused research combined with a highly-skilled workforce keep the Commonwealth on the cutting edge of sustainable energy,” said MassDevelopment President and CEO Marty Jones. “This financing will help Fraunhofer CSE continue its important work and renovate an historic building for innovative R&D.”
A major goal of Fraunhofer CSE’s Building Technology Showcase is to increase understanding and market adoption of advanced building energy technologies through education initiatives with the construction industry, architects, and facility owners and developers. Fraunhofer CSE will also partner with local schools, community colleges, and universities for seminars, tours, and hands-on experience to support Massachusetts clean energy workforce development and inspire interest in sustainable energy careers.
Fraunhofer CSE is one of eight US nonprofit Fraunhofer applied research centers, and is affiliated with the international Fraunhofer-Gesellschaft, whose worldwide staff of 20,000 conducts research that spans sectors including health, security, communication, energy, and the environment.
The Massachusetts Housing Investment Corporation also provided a $10.75 million New Markets Tax Credit allocation. Eastern Bank provided a $6.7 million bridge loan to finance historic tax credits for the project.
“We are thrilled to partner with Fraunhofer CSE in the creation of this dynamic work and research environment at Channel Center,” said Commonwealth Ventures President Dick Galvin. “The Building Technology Showcase will provide tremendous opportunities for both suppliers and manufacturers to test – in real-time scenarios – products that could provide meaningful benefits in terms of sustainability and energy efficiency for landlords and tenants everywhere.”
“MassDevelopment’s support for this first-of-its-kind building project has been invaluable to us,” said Fraunhofer CSE Managing Director Nolan Browne. “The Agency’s help – along with assistance from our partners at the US Economic Development Agency, Massachusetts Clean Energy Center, City of Boston, Commonwealth Ventures, Massachusetts Housing Investment Corporation, and Eastern Bank – has made it possible for us to develop a building that we envision as a hub of sustainable energy innovation and technology demonstration.”
“This is precisely the type of project for which the New Markets Tax Credit program was created,” said Andrea Daskalakis, MHIC’s Chief Investment Officer. “The Fraunhofer Center will create new jobs and catalyze other economic activity in the neighborhood, providing a cornerstone for the Innovation District to foster entrepreneurial activity around technology and research firms. We are especially pleased to be collaborating with MassDevelopment on a fourth project to benefit from a NMTC-enhanced financing package.”
“Eastern Bank is proud to partner with the local business community on projects that create jobs and spur economic growth,” said Eastern Bank’s Jan Miller, Executive Vice President, Commercial Banking. “We are also pleased to be involved in the renovation of a historic building in this quickly changing area of the city.”
MassDevelopment, the state’s finance and development agency, works with businesses, nonprofits, financial institutions, and communities to stimulate economic growth across the Commonwealth. During FY2011, MassDevelopment financed or managed more than 300 projects generating investment of $3.8 billion in the Massachusetts economy. These projects are projected to create more than 10,000 jobs (2,547 permanent and 8,129 construction), and build or rehabilitate more than 1,000 residential units.