Finance committee advances Springfield Crossing plan to full council after debates over $8 million DIF pledge

The Springfield City Finance Committee reviewed a proposal June 2 to establish a District Improvement Financing district (DIF) for the Springfield Crossing redevelopment on the former Eastfield Mall site that would pledge a portion of new tax revenue to repay bonds issued on behalf of the project.

City staff described the proposal as a plan to use 50% of the incremental tax revenue generated by the development to cover debt service on bonds that would be issued by the Massachusetts Development Finance Agency; the city itself would not be assigned the underlying debt, staff said. City staff also provided estimates for the project’s value and timeline: an assessed value of about $77 million for phase 1 when complete, total development costs across three phases of roughly $147 million, and an estimated seven- to eight-year period before the city would receive 100% of the tax revenue on the completed phase.

The DIF proposal would cover certain extraordinary development costs—demolition, abatement, site preparation, earthwork and paving—totaling an estimated $8 million in public subsidy. Officials said the DIF would capture 50% of the “increment,” the difference between the base assessed value (set as the fiscal 2026 assessed value for the defined geography) and the completed project valuation, to pay debt service on bonds sold by MassDevelopment or a similar financing authority.

Developer Anton Milchianda said the project had required additional unexpected remediation and site work and argued that “it takes money to make money,” describing the DIF as an investment needed to complete the project on a site long left vacant. Milchianda and other developer representatives said most retail spaces are planned to open by Thanksgiving, with one large tenant (Target) expected to open in the first quarter of next year. The developer also said the project would include a building reserved for Springfield small businesses and that tenants have agreed to host job fairs with a preference for Springfield residents.

Council members pressed staff and developers on several points: how the DIF interacts with tax-exempt pilot agreements (revenue from tax-exempt entities would go to general revenue, not the DIF, staff said), whether the DIF would supplant council authority over TIF agreements (staff said the DIF is a separate statutory mechanism and that any TIF would still require council action), and what public benefits—local hiring commitments, prioritization of Springfield businesses, public art and emergency staging access—were secured in writing.

The assessor’s office explained how the DIF increment is calculated: the base value is the fiscal 2026 assessed value for the defined 34-acre DIF geography; the increment is the difference between that base and the completed project appraisal. Staff noted that the assessed base does reflect some market appreciation and partial construction to date. Officials said the developer and the project’s lender view the DIF commitment as part of the project’s capital stack and that if the DIF did not advance, the developer would need to restructure financing and the project could be delayed or curtailed.

Some committee members expressed concern about timing and the late presentation of final DIF documents to committee members. One committee member said they did not feel comfortable making a positive recommendation on the spot because of the timing. Several members said they wanted the full council to review the full packet and the statutory components required to establish the district.

The committee did not take a final vote on the Springfield Crossing DIF. Earlier in the meeting the chair had moved to approve items 1–14 except item 5 (the DIF item), and the committee approved that motion. For item 5, the committee decided to forward the DIF materials to the full City Council for final action so the full council can consider the district, the invested revenue program, and the related authorizations.

The packet presented to the committee stated the public subsidy request was about $8 million, the completed phase 1 assessed value is estimated at $77 million, total three-phase development costs are estimated at $147 million, and the DIF is modeled to return full tax revenue to the city after approximately seven to eight years. City staff told the committee the city’s bond counsel and financial adviser had reviewed the structure and that, as presented, the debt would be repaid from the DIF revenue rather than general fund revenues.

The matter will appear on the full City Council agenda for further review and a vote; committee members and staff indicated a need to complete the statutory actions that create the DIF geographic definitions, the invested revenue district, and the development program before the council takes final action.