In Touch With Reality
July 15, 2012 : Banker & Tradesman, by Matt Brown
Marty Jones has spent her career in real estate development, and is quite familiar with the opportunities and pitfalls that face businesses and private developers. So it makes sense that she would be chosen to head MassDevelopment, an agency that provides tax exempt bonds, real estate loans, brownfield redevelopment expertise and a host of other services.
Q: What do developers or businesses do wrong, and what do they do right, as far as financing is concerned?
A: One of the things about real estate development that is great fun is the fact that you get to build things that people are actually going to touch and see, and I think what happens in many businesses is that people fall in love too much with the idea and get a little lost about the practicalities. Any real estate deal, like any business, comes down to dollars and cents, and what’s really going to make sense financially. I think all of us have seen pictures of very exciting, grandiose projects that don’t actually get done because they may not be as grounded in financial reality as they need to be.
Q: What does financial reality look like today in Massachusetts?
A: It’s interesting. You can’t look at the whole commonwealth as one particular economic unit. It’s a collection of regional economies. Boston is different than Springfield, is different than up on the North Shore. So, certainly in the Greater Boston area, development is starting to come back. Rents are starting to be strong enough to justify new construction. I think what’s happening in other parts of the commonwealth is a little different. It’s still very hard to develop rental housing for any income group without sizeable contributions from the public.
Q: Does that say anything in particular about those areas, or about the economy in general?
A: Boston has always been a more pricey area in terms of housing prices, salaries, cost of living, than other parts of the commonwealth. As a competitive advantage for businesses, we’ve been encouraging businesses to look to other parts of the commonwealth that may be a little further out, where there are more opportunities for more affordable housing for employees, a different kind of business cost environment.
Q: What has been the response to that?
A: Well, you look at what’s happened at Devens, which is an interesting example, because we’re just outside of [Interstate] 495. We’ve continued to see good growth there over the past couple of years. There are new businesses opening up. There are other things happening. I think part of that is location, which is accessible to good transportation, but I think the other part of it is having accessibility to the workforce. Being in that area, you have access to a workforce from a lot of different areas, which is a big plus.
Q: Has the economy made businesses or developers more willing to look west of 95, 495, into Worcester or Springfield? Do you see them making that jump?
A: I think now that the costs are so high in Boston, that starts to drive development further out. That’s happened in other boom-and-bust cycles, so I think that’s starting to happen again.
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