City Council Approves $8M District Improvement Financing for Springfield Crossing

The Springfield City Council voted June 2 to establish a district improvement financing (DIF) district for the Springfield Crossing project on the former Eastfield Mall site, approving a structure that dedicates a portion of new property tax revenue to pay bonds that will fund public site improvements.

Tim Sheehan, chief development officer for the city’s Department of Planning and Economic Development, said the DIF would be used under Mass. Gen. Laws c. 40Q to cover “demolition and abatement, site prep, earthwork, and paving.” He added, “The total cost of the proposed public subsidy is $8,000,000.”

The DIF creates a defined financing district covering 34 acres of the site. Under the plan presented to the council, the incremental property taxes generated by new development above the site’s current tax base would be split roughly 50–50 between the city and the development entity; the developer and third‑party bondholders would front the construction cost, and repayments to those bondholders would come from the tax increment. Sheehan told the council the city would make the increment available to “service the debt” but city officials and bond counsel told councilors the city would have no direct repayment obligation on the bonds themselves.

Matt Fontaine of the assessor’s office described the valuation work used to estimate the district revenue. “The as completed value is $77,000,000. That was derived using an income approach to value,” he said, adding that valuations and revenues could change if development phasing changes.

Councilors pressed developers and city staff about project scope, timing and public benefits. Onyx Partners LLC, the developer on the project, told the council it expects most retail and commercial components to open for the holiday season, with one anchor (Target) opening in the first quarter of 2026. City officials said two additional development phases — including housing — were not part of the DIF district under consideration.

City staff provided a line‑item breakdown of the planned $8 million subsidy during discussion: demolition and abatement $3.2 million; site preparation and earthwork $2.1 million; and paving $2.6 million. Councilors and city staff repeatedly emphasized that the subsidy would be spent on the improvements identified in the DIF budget and that the improvements would not become city‑owned assets, a structure the city’s bond counsel recommended to avoid long‑term city liability.

Developers and municipal officials listed several public benefits the project will offer, including prioritized leasing space for local businesses, commitments to a “Springfield First” hiring program, public art, event space and a maintained walking trail and conservation/riverfront cleanup area on the site. Developers said they would also allow temporary use of parking areas for incident response and staging in major emergencies.

The council took a roll‑call vote after extended discussion and approved the DIF; Councilor Allen recused from the vote. Council discussion and the project’s financing documents, councilors said, were reviewed by the city’s bond counsel and financial adviser before coming to the full council.

The project team and city officials characterized the DIF as a time‑limited subsidy: staff recommended a 10‑year district term and estimated the improvements could be paid in seven or eight years, depending on actual development and assessed values.

City staff and the developer said the bank financing for the project included the city’s DIF commitment as a condition; developers told the council that without the committed subsidy the project’s financing would be threatened. City officials described the arrangement as a public‑private partnership that aims to accelerate a largely dormant commercial site back into active taxable use.

Council action: The council approved the order establishing the Springfield Crossing DIF (item 10). Councilor Allen recused and was recorded as such; the remaining councilors voted to approve the DIF.