A Gateway to unintended consequences

Gateway City criteria and benefits unfairly cut out deserving communities in need

what’s in a name? According to the Commo­n­wealth of Massachusetts, everything.

In 2007, MassINC and the Brookings Institu­tion issued a report that used the phrase “Gate­way City” to describe “the state’s once-humming mill and manufacturing towns.” The report, which highlighted the economic problems and potential of these communities, created a buzz. The Com­monwealth responded by jumping on the Gate­way City bandwagon and launching a series of initiatives to help these communities reenter the economic mainstream. Unfortunately, Gateway City was defined in a way that unfairly excludes my community of Gardner, as well as others.

The original MassINC/Brookings report identified 11 Gateway Cities. They were Brockton, Fall River, Fitchburg, Haverhill, Holyoke, Lawrence, Lowell, New Bedford, Springfield, Pittsfield, and Worcester. They were selected because they had a strong manufacturing heritage, high poverty rates, low educational attainment levels, and populations greater than 35,000.

When the state launched its Gateway City program, it refined the criteria a bit and expanded the list to 24 communities. State law defines a Gate­way City as a municipality where the median household income and per capita income are less than the state average, where the percentage of the population with a bachelor’s degree or higher is below the state average, and where the population exceeds 35,000.

Gardner is the quintessential example of a Gate­way City. It has a strong manufacturing heritage. (You don’t come by the moniker of “Chair City of the World” by being a bedroom community. Sadly, the major manufacturers are gone from our area now.) Its median household income is $47,630 (74 percent of the state average); its per capita income is $24,938 (also 74 percent of the state average); and the percentage of the population with a bachelor’s degree or higher is 20.3 percent (54 percent of the state average). The only category where Gardner doesn’t qualify is population. At 20,000, its population falls beneath the state-designated cut-off.

Let me have the same chances as Gateway Cities in order to promote my city.When the designation of Gateway City first came out, I sought the title for Gard­ner, but was assured that there was no money attached to this designation and that whatever doors were opened for Gateway Cities would also be open for cities such as Gardner. But that hasn’t happened. Gateway Cities have received numerous advantages, in both monetary aid and economic development support.

Since fashioning its own definition of a Gate­way City, the state has created an entirely new bureaucracy to oversee these anointed communities. These Gateway Cities now have their own coordinator at the State House (with a $105,000 salary), whose main purpose is to “coordinate and implement the Patrick Administration’s Gateway Cities agenda to best address the needs and fully maximize the potential of these 24 distinct municipalities.”

A sampling of the new-found benefits for the anointed Gateway Cities includes:

  • Expansion and enhancement of a state tax credit for manufacturing and research and development companies creating or retaining jobs in Gateway Cities.
  • A Gateway City Parks program that has invested $9.5 million in Gateway Cities, and has most recently allocated $7 million for six urban centers as part of 17 ongoing Gateway Cities parks programs across the state.
  • Gov. Patrick’s Kindergarten Readiness Literary Pilot Program, which is being launched only in Gateway Cities and helps to make sure every student is a proficient reader by the third grade.
  • Gateway Plus Action Grants that provide $1.35 million in funding to cities for planning activities that expand housing opportunities and support the revitalization of neighborhoods to enhance economic vitality and the quality of life for all residents.

In October 2009, 12 Gateway Cities were invited by Mass­Development to a biotech developer conference attended by more than 100 biotech industry representatives. MassDevelopment also cosponsored additional regional events giving over 100 developers, real estate professionals, and investors a presentation of opportunities in Gate­way Cities. MassDevelopment partnered with the NAIOP, the commercial real estate development association, to hold similar events in Gateway Cities earlier that year.

Alas, the goodies don’t end with the aforementioned sampling. Multiple legislative initiatives have arisen in recent years in attempts to provide codified benefits such as tax credits and policies to specifically aid Gateway Cities. Gov. Patrick’s 2010 Economic Development Reorganiza­tion Bill included specific language affording Gateway Municipalities such perks as “the market rate Housing and Development Incentive Program,” which is proposed to “promote increased residential growth, expand diversity of housing supply, and create neighborhood stabilization and economic development.” The creation of the Massa­chusetts Growth Capital Corporation is another initiative that targets Gateway Cities. Its mission statement explicitly states that the organization strives to “promote economic development in underserved gateway municipalities” and was funded with $35 million in new capital.

Through programs such as these, Gov. Patrick’s administration has invested $246.9 million in capital funds to help modernize affordable housing units in the designated cities and pushed funding towards other areas. This trend of legislative initiatives for Gateway Cities has continued into this year. Multiple bills are currently under consideration that would establish residential tax abatement zones, steer 5 percent of public retirement system assets to Gateway City projects, and create a tax credit for each job created in a Gateway City.

The attempt to allow Gateway Cities the ability to turn Affordable Housing Tax Credits into Market Rate Tax Credits is most upsetting to me. Of the 24 Gateway Cities, only 13 have achieved the 40B threshold of having at least 10 percent of their housing stock affordable. In fact, only 37 communities statewide have achieved this level. Gardner sits in eighth place statewide by having 14.5 percent of its housing stock deemed affordable. Too much affordable housing will choke a community. Arbitrarily allowing Gateway Cities that have not achieved the 40B threshold of 10 percent affordability to turn Affordable Housing Tax Credits into Market Rate Tax Credits is wrong. (Not wanting to present a problem without a solution, the state should seriously consider changing this system. Perhaps once a community achieves 12 percent affordability, they should be allowed access to Market Rate Tax Credits for a project as long as they do not then drop below the 10 percent threshold.)

The facilitation of private sector development and privileged access to specialty aid will most certainly give Gateway Cities a leg up, and achieve the intended goal of revitalizing these once-great industrial havens. Yet excluding cities like Gardner merely because of a population requirement will create unnecessary and counterintuitive stratification in the shared progress of the Common­wealth’s municipalities.

Meet the Author
Let me sit at the table with the Bio/Pharma industry executives and explain why Gardner, with a Gold Com­munity BioReady rating, is the right place for them to locate a business. Let me give developers market rate housing tax credits rather than saddling Gardner with more affordable housing. Gardner is ripe for major development due to the low cost of living, affordable property values, and excellent highway access. Let me have the same chances as Gateway Cities have in order to succeed and promote my City and the Commonwealth will be all the better for it. The Gateway City club is too narrowly drawn.

Mark Hawke is the mayor of Gardner.