Editor: Mr. Culver, would you tell our readers something about your professional experience?
Culver: Since March of 2004 I have been President and Chief Executive Officer of the Massachusetts Development Finance Agency. Prior to that I worked in both the public and private sectors in executive positions, including Vice President for Finance and Administration at Yale, CFO at Cabot Corporation and Senior VP and Treasurer at Northeastern University.
Editor: Please give us an overview of the Massachusetts Development Finance Agency.
Culver: The MDFA is the result of a merger between the Massachusetts Industrial Finance Authority and the Massachusetts Land Bank. One agency was concerned with tax-exempt debt and the other with the disposition of surplus state properties. The present agency acts as the state's banker and land developer. The merger resulted from one of our major military bases, Fort Devens, being shut down in the early 1990s, which meant a substantial loss of jobs and the obsolescence of an entire facility exceeding 5,000 acres. From the mid-1990s to 1998, when the Legislature formally created the MDFA, the two agencies worked together to develop financing mechanisms and land disposition expertise to deal with the Devens site. They then began to expand into the financing of a variety of projects, including brownfields, higher education, emerging technologies and general industrial development. A particular focus of the MDFA today is on helping some of the state's older cities, such as Lawrence, Springfield, New Bedford and Fall River, address their planning needs for the 21st century.
Editor: And MassDevelopment's mission?
Culver: We are a key component of the Commonwealth of Massachusetts' economic development engine. We provide tax-exempt financing as well as planning capability for both municipalities and the private sector.
The MDFA is a public service agency - and exempt from taxation and accorded the legal right to issue tax-exempt bonds. We pay our way by virtue of the fees generated by our issuance of bonds. In just this past year alone we issued $277 million of bonds for Harvard University. Our certification of the project - that it is in the public interest of the Commonwealth of Massachusetts - enables Harvard's underwriter to issue the debt on a tax-exempt basis, and Harvard goes on to construct new educational facilities or student housing at a much lower cost than would be the case if it had to resort to the issuance of taxable bonds.
Editor: I gather that, among other things, MassDevelopment acts as a bridge between the private sector and government. How does this work?
Culver: Very often private business will approach us in our planning capacity for help in setting up in a particular city or town. They may have zoning issues. They may be eligible for tax-exempt debt. They may simply have a need to communicate their concerns. We are there to help.
Editor: This sounds like a natural outgrowth of the work that you did at Fort Devens.
Culver: Devens was the catalyst. We became the owner of the land in Devens and in control of a fund of $200 million to be used over a 30-year period to develop the infrastructure necessary to replace the jobs lost with the departure of the military. What we have been able to do at Devens far exceeds what the Legislature had envisioned. In a ten-year period, using about $145 million of the $200 million, we attracted more than 80 businesses, accounting for a capital investment of half a billion dollars and an annual payroll of about $220 million. In just the past year, Bristol-Myers Squibb decided to locate a $660 million plant in Devens that will employ about 550 people, and Evergreen Solar is building a facility that will add an additional 350 jobs in Devens.
Editor: Notwithstanding your success with Bristol-Myers Squibb and Evergreen Solar, the competition for new business is intense. What do you say to prospective investors about Massachusetts as an investment destination and place to do business?
Culver: We are in a new age so far as competition for new business is concerned. That means global competition. Massachusetts is about higher education, healthcare, high tech, biotech and financial services, among other things, and these industries and industry sectors constitute the underpinnings of the global economy. When we talk to major participants in this arena, such as Bristol-Myers Squibb, we are talking about access to expertise, personnel, a fully-developed infrastructure, and so on, that people think about when they describe the global economy. The major themes are in place and in operation right here. In the competitive discussion, Massachusetts performs very well against the likes of, say, Ireland, Singapore or the Research Triangle.
As a practical matter, enterprises that compete in the global economy are anxious to have access to an educated and reliable workforce capable of immediate employment, and they are also concerned about the availability of a training infrastructure. In the case of Bristol-Myers Squibb, the workforce was readily accessible, and the plethora of nearby educational institutions was able to provide training capability. We were able to help with zoning and permitting, and our engineers worked with theirs on the company's water needs.
In terms of the big picture, Massachusetts is in possession of resources that all but sell themselves to the prospective investor. The MDFA is then able to weigh in with a variety of low-cost financing options, zoning and planning support and an array of services across various construction and engineering concerns.
Editor: Would you tell us about some of the major projects that MassDevelopment has undertaken recently?
Culver: In Northampton, we have taken on the responsibility for developing the site of the Northampton State Hospital, which was established in the 1800s and shut down in the 1960s. For several years we have been working on a sustainable, new-urbanist community, which entails a variety of residential options for the 126-acre site, including luxury housing, town houses, cottages and rental apartments, laid out in a New England village setting. The concept calls for greater density in terms of housing, but more open shared living space. The site will be multi-use, and in addition to residences it will accommodate manufacturing and commercial development and retail activities. The site is also intended to accommodate mixed-income and subsidized housing.
In Springfield, there was some concern recently about the possibility of default on $50 million of bonds. A control board was put into place, and the MDFA was brought in to assist in the city's planning and development efforts. We suggested the city retain the Urban Development Institute, one of the world's premier urban development organizations, and a great deal of progress has been made, particularly with respect to downtown development. That has enabled the MDFA to focus on the outskirts of the town and to help clean up and then develop areas that, with some effort, can become very attractive sites for the right enterprise. All of the projects connected with Springfield appear to be moving in the right direction.
Editor: How do you deal with the blighted areas?
Culver: We go in with a team of people, including people from the city's public safety, planning, transportation and housing groups. Our contribution includes, usually, planning, zoning and taxation expertise.
Another significant project in a blighted area is in Fall River, where we are attempting to promote a research and technology park on a 17-acre brownfield site. At the moment, this site hosts a 60,000-square-foot technology building used by UMass-Dartmouth for its Advanced Technology and Manufacturing Center. That has prompted a number of other businesses to come to the site, including Avant Immunotherapeutics and Meditech, which are major high-tech players, and we anticipate an additional 500 to 600 new jobs in the near future.
In Boston, we entered into a public-private partnership to rehabilitate 100 Cambridge Street, a state office building that we have converted to public and private office uses, with a substantial retail feature.
Editor: Would you like to give us your thoughts about the development of the Massachusetts economy over, say, the next five years ?
Culver: As I have indicated, the Massachusetts economy is focused on financial services, higher education, healthcare, high tech and biotech, and they will continue to be the drivers of our success, as they continue to drive the global economy. What do these industries need? Well, the type of person they employ needs affordable housing, so we have paid considerable attention to housing in recent years. That person also needs transportation, so the state has been active in supporting the extension of our transportation infrastructure beyond our cities and towns to encourage the construction of affordable housing construction without compromising access to the workplace.
Massachusetts is able to distinguish itself, I think, as a place where the scale of life is manageable, particularly in contrast to that offered by the major urban centers around the world. Government is both accessible and responsive here - no doubt a reflection of what I like to call smart business. We have our own way of doing things, and we tend to think in terms of a different scale from New York, London and Tokyo. What works here works very well.