Gov. William F. Weld yesterday kicked off the Massachusetts Information Technology Center project. which represents the first step in a $250 million economic revitalization program for the city of Chelsea.
At a ceremony at Chelsea's city hall, Weld said he remains committed to spurring job growth in the state, and that "this new information technology center is another key building block in Chelsea's rebirth."
The construction of the center is expected to be the largest single building project begun in the state this year. It will create 650 construction and 875 permanent jobs in the Boston suburb, according to a release from the Massachusetts Industrial Finance Agency.
The first phase of the project is scheduled to begin next month when the new Chelsea Industrial Development Finance Agency sells $84 million of municipal bonds for construction of the Information Technology Center's first building. The center will be located in the city's Murray Industrial Park.
The new building, expected to contain at least 420,000 square feet of space, will be home to the Massachusetts Department of Revenue's tax collection processing office as well as other state sub-agencies, according to Daniel O'Connell, executive director of the Massachusetts Industrial Finance Agency. The agency has been advising the Chelsea development group and will develop and own the property for the 30-year life of the bonds.
O'Connell said the debt service on the sale will be indirectly provided by Massachusetts.
"The commonwealth will be providing debt service and a healthy reserve fund through lease payments from the Department of Revenue." O'Connell said. "They would like to move into the building before the end of 1995.
O'Connell said the reserve fund will grow as large as $7 million during the expected 15-month construction period. The fund will be reduced each year once construction is completed and revenues start to be generated from the lease payments.
Merrill Lynch & Co. will serve as, senior manager for the $84 million bond sale in August.
"We have been doing a lot of work with Chelsea and Merrill Lynch on this bond sale," O'Connell said. "But, primarily, we have been acting as an educator of the Chelsea IDFA as they enter the marketplace."
The construction of the city's information center is only one chapter of the Chelsea story. As part of the overall economic revitalization, the city is in the planning stages of building an $11 million district courthouse with the state's Government Land Bank and Division of Capital Planning and Operations.
Also, the city is expected to work with MIFA on the construction of a $13 million, 110,000-square foot, medical-waste reprocessing facility for BioMed of New England.
This would create about 150 permanent jobs, according to the press release from MIFA.
O'Connell also said the city will sell about $90 million of bonds to finance school construction within the next six months. The bonds would be 90% secured by state matching education funds.
The flurry of activity comes less than two years after Weld put Chelsea into state receivership.
Because of rapidly shrinking revenues, widespread poverty, and years of financial mismanagement, the city found itself unable to pay its bills and was placed under state control in September 1991.
In less than a year, James F. Carlin, the city's first receiver, slashed over $10 million from the city's $40 million budget.
Carlin resigned from the post last summer and Lewis H. Spence took over.
After Weld appointed the receiver. several former city, police, and school officials have been convicted of mismanagement of city funds.
Spence has said that once the economic development plan is in place, the next largest challenge will be to get a representative government back in place at city hall.
He said Chelsea officials and the University of Massachusetts are working on a study to find the best way to govern the city, which has a population of 28,000.
Chelsea currently has no outstanding long-term debt and is not rated by the major ratings agencies. The city's last debt matured in 1989.