Annual Performance Report — Fiscal Year 2016

Charlie Baker, Governor

Karyn Polito, Lt. Governor

Jay Ash, Chairman and Secretary, Executive Office of Housing and Economic Development

Marty Jones, President & CEO

2

JOBS CREATED 155% of Target for Fiscal Year

PROJECTS IN FISCAL 2016

[TDI] District in Development & ULI TAP—Shirley Ave., Revere

Provided intenstive one day planning w regional

experts to inform a comprehensive, community

led redevelopment strategy in a key neighbor-

hood commercial corridor.

Cultural Facilities

Fund - Truro Center

for the Arts @ Castle

Hill, $600,000

Contribution to a $1.6

million dollar capital campaign to fund acqui-

sition of the historic Edgewood Farm.

Acquisition of the 7 acre site will provide ex-

panded summer housing, broaden program-

ming and community partnerships, and con-

tribute to greenspace preservation in the

community.

Real Estate Loan - Lexvest Chapel LLC, Pepperell, $2.25M

Redevelopment of the property will provide upgrades to

60,000 sq. ft of space for multiple new tenants in office,

light manufacturing & warehouse storage.

Project will create 100 new jobs.

AT A GLANCE

HOUSING UNITS

PRESERVED

&/OR BUILT

501c3 Bond & New Market Tax Credit - Holyoke

Medical Center, $25M

Financing combined a

$10 million New Mar-

kets Tax Credit and

$15 million tax-

exempt bond.

The acute-care community hospital will build a two-

story addition that will house a new emergency de-

partment, a weight clinic, sleep-care center, and spe-

cialty outpatient services, expanding service for over

15,000 patients.

Project will create 25 jobs and 70 construction jobs. 167% of Target for Fiscal Year

Manufacturing Bond -

Advanced Cable Ties,

Inc., Gardner, $8M

Financing will build

42,300 sq. ft of new,

manufacturing & warehouse space & fund equip-

ment upgrades.

Project will create 130 new & construction jobs.

3

STRATEGIC THEMES & FISCAL YEAR 2016 GOALS

SUPPORT ECONOMIC GROWTH

STRIVE FOR ORGANIZATIONAL EXCELLENCE

BUILD REGIONAL COMPETITIVENESS

FULLY MET GOAL PARTIALLY MET GOAL

Provide Access to Markets

Support Job Creation

Increase Access to the Innovation Economy

Champion Transformative Development Initiative

Increase Housing Availability

Build Regional Knowledge & Facilitate Regionally Based Econom-

ic Growth

Develop Devens

Catalyze Urban Economic Growth, Cultivate Small Businesses &

Improve Brownfields Program

Modernize Systems & Technology

Build Collaborative Culture

Strengthen Performance Management

Support Defense Sector, Military Installations & Related

Industries

Support Manufacturing & Other Commercial/Industrial

Sectors

Build MassDevelopment Workforce Capacity

Increase Stakeholder Engagement

STRATEGIC THEMES

Strategic Theme 1: Support Economic Growth Foster and Cultivate Opportunities That Equip Businesses, Nonprofits and Communities with the Tools They Need to Sustain and or Expand, Creating Quality Jobs to Meet the

Needs of the Commonwealth's Economy

Strategic Theme 2: Build Regional Competitiveness Increase Housing Stock and Make Investments In Targeted

Communities, Add to their Housing Options and Commercial Property Stock, Remediate Troubled Sites and Apply Effec-

tive Redevelopment Practices.

Strategic Theme 3: Build Organizational Excellence Create a High-Performing Organization with Efficient, Effec-tive and Integrated Delivery of Services to External and In-

ternal Customers and a Diverse, Highly-Qualified Workforce with the Right Skills in the Right Jobs.

DECISION RULES

Quantitative & qualitative metrics established for each goal.

FULLY MET GOAL—All quantitative targets met

more than 2/3 of qualitative measures met

PARTIALLY MET GOAL— Some quantitative targets me

less than 2/3 of qualitative measures met

4

KEY PERFORMANCE INDICATORS

SUPPORTING ECONOMIC GROWTH:

JOB CREATION

FY14-FY16 Comparison—Total Jobs Created

SUPPORTING ECONOMIC GROWTH:

ACCESS TO CAPITAL

BUILDING REGIONAL COMPETITIVENESS:

INCREASE HOUSING AVAILABILITY

FY14-FY16 Comparison—Total Financing FY14-FY16 Comparison— Total Units

5

SUPPORT ECONOMIC GROWTH: SUPPORT ACCESS TO CAPITAL

Fiscal 2013 Fiscal 2014 Fiscal 2015 Fiscal 2016

Total $ Invested

(Bonds, Loans & Grants)

$2,333,253,346 $2,867,710,604 $2,410,425,751 $3,960,006,084

Total Projects/Closings 317 277 286 296

MassDevelopment Investment Trends FY2007 - FY2016

FY2016 Total Invested (by region)

Performance Analysis

122% of fiscal year target in total financing volume

Increase over prior year and high share of total volume in Greater Boston driven by two

large hospital issuances ($500M, Partners and $500M, CareGroup)

Over $1B in support for projects outside of Greater Boston

97% of fiscal year target in general & restricted fund lending

118% of fiscal year target in community development (Brownfields, CFF, Manufacturing grants)

0

50

100

150

200

250

300

350

FY2008 FY2009 FY2010 FY2011 FY 2012 FY2013 FY2014 FY2015 FY2016

# of Deals

$0

$500,000,000

$1,000,000,000

$1,500,000,000

$2,000,000,000

$2,500,000,000

$3,000,000,000

$3,500,000,000

$4,000,000,000

$4,500,000,000

FY2007 FY2008 FY2009 FY2010 FY2012 FY2013 FY2014 FY2014 FY2016

Total Invested

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

FY2007 FY2008 FY2009 FY2010 FY2012 FY2013 FY2014 FY2015 FY2016

Existing Jobs (At Customers Financed)

6

Performance Analysis

155% of fiscal year target in total job creation

* Significant new employment (projected & calculated construction) in FY16 transactions

137% increase in projected new permanent jobs created over FY14

211% increase in calculated construction jobs created over FY14

* Significant 501 c 3 bond issuances financing new construction in FY16

18% increase in existing jobs indirectly supported by providing businesses and institutions in

the Commonwealth access to financing

SUPPORT ECONOMIC GROWTH: SUPPORT JOB CREATION

FY2015 & FY2016

New Permanent/Construction Jobs (by region)

Jobs Created

FY2007—FY2015

531778%

3044%

2864%

2394%

69510%

Construction Jobs - FY15

Greater Boston

Northeast

Central

Southeast

West

4389, 73%

176, 3%

430, 7%

230, 4%

784, 13%New Permanent Jobs - FY15

Greater Boston

Northeast

Central

Southeast

West

6,814, 83%

502, 6%

492, 6%

142, 2%259, 3%

New Permanent Jobs - FY16

Greater Boston

Northeast

Central

Southeast

West

10,406, 72%

1,541, 11%

1,485, 10%

309, 2%676, 5%

Construction Jobs - FY16

Greater Boston

Northeast

Central

Southeast

West

11,016 10,3848,232

3,580

11,7689,169

15,32412,933

22,626

0

5,000

10,000

15,000

20,000

25,000

FY2007 FY2008 FY2009 FY2010 FY2012 FY2013 FY2014 FY2015 FY2016

Jobs Created (Construction + New Permanent)

Total: 6,009 Total: 8,209 Total: 6,841 Total: 14,417

7

Performance Analysis

37% decrease in total dollars invested (all pro-

grams) to support the manufacturing sector

over previous year

38% decrease in total job creation (projected

new and construction) supported in the manu-

facturing sector over previous year

17% increase in total projects supported in the

manufacturing sector over previous year

Program Awards

9 Grants - $ Invested: $88,633

Program Highlights

Over 100 events, conferences, company tours,

teacher externships and student internships sup-

ported

Over 120 employers participating in activities in-

cluding tours, job fairs, hosting internships/

externships

Significant exposure to opportunities in the sec-

tor reaching

Over 2,500 students

Over 800 parents

Over 100 teachers and guidance counselors

SUPPORT ECONOMIC GROWTH:

STRENGTHEN THE MANUFACTURING SECTOR

0

10

20

30

40

50

2012 2013 2014 2015 2016

Manufacturing Projects/Investments

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

2012 2013 2014 2015 2016

$ Invested

0

200

400

600

800

1000

2012 2013 2014 2015 2016

Jobs Created

Manufacturing 2012—2016 (Total Projects, Total Invested, Total Jobs Created)

Finicky Pet Foods, Inc., New Bedford

Manufacturing Bond & Loan Guarantee

($5.9M) —

Manufacturing bond financing, which

MassDevelopment enhanced with two ex-

port guarantees, will be used to acquire and install solar panels on the

roof of Finicky’s New Bedford manufacturing facility.

Finicky Pet Food, Inc. sources fresh fish, frozen fish, and fish scrap from

local fish cutting-houses for processing. The company provides frozen

and ground fish to suppliers and manufacturers in all parts of the indus-

try’s supply chain.

MassDevelopment estimates the project will create 20 construction jobs

and increase the company’s energy efficiency.

8

SUPPORT ECONOMIC GROWTH: STRENGTHEN THE DEFENSE SECTOR

Performance Highlights

Updated UMass Donohue data (as of FY2013) reports on impact of 6

installations on the economy & on value of contracts to the state:

Massachusetts military installations directly or indirectly supported

More than 57,000 jobs

Total economic contribution of more than $13 billion

Defense contracts in Massachusetts directly or indirectly supported

More than 88,000 workers

Total economic contribution of more than $20 billion

Implemented multiple clean energy/energy efficiency projects at installations in partnership with Dept. of Energy Resources

$2.3M total invested in multiple projects at installations Total Annual Projected kWh Savings from projects

Consultant in place to determine savings after projects are operational

Barnes

AFB

Ft. Devens Hanscom

AFB

Westover

AFB

Natick Joint Base

Cape Cod

In FY2016, the agency collaborated with the Commonwealth and The MITRE Corporation to complete program design and prepare to launch the Massachusetts Innovation Bridge. The Innovation Bridge will help federal agen-cies solve the nation’s most difficult challenges by tapping into the world-leading innovation and high-tech eco-system in Massachusetts, while creating new business opportunities in the Commonwealth.

Through the Innovation Bridge, the Department of Defense and other federal agencies will create new relation-

ships with innovative academic institutions, thought leaders, established companies, and with companies that

previously did not work with the federal government. Together, they will discover innovative ideas, products,

and services to enhance federal agency missions. The new collaborative workspace will also give Massachusetts

companies, higher education institutions, and nonprofits access to new federal business opportunities.

Program Highlight—Doriot Chamber Upgrades (Natick Soldier

Systems Center)

MassDevelopment provided $900,000 in funding to support in-

stallation of new mechanical and electrical systems. This support

will reduce the chambers' annual operating costs by more than

$71,000 and energy use by 85 percent.

The project is designed to increase the opportunity to foster

cross-sector, collaborative research partnerships that will ad-

vance science and technology innovation.

The Doriot Climatic Chambers is a unique testing facility capable of producing extreme environmental condi-

tions for the Army's equipment and human-performance-related research and technology development. The

facility consists of two large, main chambers that simulate tropical and arctic environments by replicating the

temperature, humidity, wind, rainfall and solar radiation conditions found anywhere in the world.

9

SUPPORT ECONOMIC GROWTH: INCREASE ACCESS TO THE INNOVATION ECONOMY

Emerging Technology Fund (FY2014—FY2016)

Total Invested

$10,525,000

Total New Jobs

250

Total Existing Jobs

100

CoWork Program (Gateway City/TDI)

FY16 - 13 Grants, $ Invested: $462,000

Program To Date - 24 Grants, $ Invested: $1,449,800

Program Highlights

19 CoWork funded spaces, totaling over 140,000 square feet

Significant program efforts in FY16 including:

Over 150 participating members

Over 200 events/classes/meetings sponsored by spaces

5 New Business Starts

10

BUILD REGIONAL COMPETITIVENESS:

IMPLEMENT TRANSFORMATIVE DEVELOPMENT INITIATIVE

Performance Analysis

TDI Equity

One investment closed in FY 16 (Stearns Sq., Spring-

field) $2.4M total cost; several tenant prospects identi-

fied

10-15 pipeline projects in districts of various types un-

der consideration/due diligence throughout year

TDI Fellows

3 new fellows placed (Pittsfield, Brockton, New Bed-

ford) joining Lynn, Haverhill & Springfield

2 adjunct fellows identified in Worcester & Peabody

TDI Technical Assistance

17 technical assistance engagements completed in

FY16, including:

Market Studies, Building Test Fits, Comprehen-

sive Downtown Planning, Community Engage-

ment

TDI Fund Leverage

$3.7M in outside support leveraged, including:

National Resource Network partnership

City of Springfield Stearns Sq. Park improve-

ment commitments

TDI Program Highlight

Make-It Springfield

Initially a street activation

pop up experiment be-

tween UMass and MassDe-

velopment, the space has

hosted 30 different resi-

dents, artists, entrepre-

neurs, local nonprofits, ac-

ademic faculty and stu-

dents, serving 150 people

per week.

Thanks to the success of the space’s public workshops and the contin-

ued support of Silverbrick Lofts, the building’s owner, Make-It Spring-

field will be in its current location at 168 Worthington Street for the

foreseeable future, adding to the vitality of downtown Springfield and

its TDI District.

UMass and MassDevelopment are funding the effort with help from

landlord SilverBrick Lofts.

11

BUILD REGIONAL COMPETITIVENESS: INCREASE HOUSING AVAILABILITY

Performance Analysis

167% of fiscal year target in total units built/preserved

63% increase in units preserved over previous year, 154% increase in units built over

previous year

*For the next 2-5 years, the FY 14-16 trend likely to continue (pending allocation of

bond cap) with increasing new construction demand (both affordable & market) and sig-

nificant preservation demand

42% of all units supported (avg., last 5 FYs) are in highest housing cost MassDevelop-

ment region (Greater Boston)

Over 65% of these units are at some level of affordability (FY2016)

12

BUILD REGIONAL COMPETITIVENESS:

BUILD REGIONAL ECONOMIC DEVELOPMENT KNOWLEDGE

Performance Analysis

Significant utilization rate for TAConnect workshops

Decrease in total number of RE Technical Assistance projects initiated & completed over prior FY

Technical Assistance Panels 2016

Leominster - Downtown

Redevelopment

Taunton - Downtown

Redevelopment

Revere - Shirley Ave. Corridor

Provincetown - Affordable/

Workforce Housing

FY2016 Results

Workshops/Webinars/Peer Groups - 11

Including 64 cities/towns, 7 Regional Planning Agen-

cies & 8 state/regional agencies

Topics included: Mill Redevelopment; Financing

Downtown Revitalization; Creative Economy; Place-

making

6 municipalities completed online applications for

assistance using the TAConnect portal

Real Estate Services - Technical Assistance

New Projects Completed Projects

FY2014 11 4

FY2015 12 6

FY2016 7 4

Plan Development Activity To Date

Comprehensive planning effort completed summer, 2015. Results to date

include:

Construction of new town marina operations center & opening of new

retail outlets including fish market/restaurant completed summer, 2016.

Town officials & stakeholders continue to work towards other planned

activities in the years ahead.

SANDWICH, MA—MARINA PLAN

13

BUILD REGIONAL COMPETITIVENESS: CATALYZE URBAN ECONOMIC GROWTH, CULTIVATE SMALL BUSINESSES

& IMPROVE BROWNFIELDS PROGRAM

Performance Analysis

90% increase in total dollars to Gateway Cities over previous fiscal year

42% Increase in total job creation (projected new permanent & construction) over previous fiscal year

33% of total MassDevelopment projects in FY16 in Gateway Cities

Small Business Ecosystem Study—Springfield, Haverhill, New Bedford

(MassDevelopment & NextStreet)

14

BUILD REGIONAL COMPETITIVENESS: BUILD DEVENS

FY16—Development at a Glance

Acres Sold for New Development: 22.5 (Additional options on 12 acres)

Acres/SF New Development Constructed: 22.5 acres/190,000 SF

Sites Marketed: 18 sites (including 9 former Army buildings)

Sold: 3

Total $ Invested:

Public: $4,342,459

Performance Analysis

28% decrease in Devens operations deficit over previous year

8% increase in total assessed value of land over previous year

9% increase in total tax revenue over previous year

10:1 ratio of private investment to public investment in

Devens projects

24% increase in total employment (4,977) at Devens

30% higher average wage ($83,545) at Devens than in MA

($60,094)

2/3 to target of recovering all jobs lost in base closure

Note: Valuation as of 1/1. Does not include properties assessed a Municipal Service Fee. Does not include full value of parcels under TIFs or STAs.

Devens Total Assessed Valuation

2015 to 2016

FY2015 Valuation FY2016 Valuation Change % Change

Residential $31,025,600 $31,588,100 $562,500 1.81%

Commercial $40,519,500 $42,398,100 $1,878,600 4.64%

Industrial $103,244,100 $125,153,500 $21,909,400 21.22%

Total 174,789,200 $199,139,700 $24,350,500 13.9%

$4,981,962 $5,050,415 $5,703,047

$6,264,465

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

FY2013 FY2014 FY2015 FY 2016

Devens Total Tax Revenue (excluding PILOT fees)**

FY 2013, 2014, 2015 and FY 2016

$2,529,921 $2,840,279

$1,468,338

$1,062,666

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

FY2013 FY2014 FY2015 FY 2016

Devens - Operations Deficit*Fiscal Years 2013, 2014, 2015 and 2016

Note: *Only includes Devens Municipal Operations **Does not include property values subject to a TIF. All values above are unaudited.

15

STRIVE FOR ORGANIZATIONAL EXCELLENCE: ALL GOALS

Build MassDevelopment Workforce

Capacity

Goal incomplete.

Due to human resource department staffing transition. Plan in place for FY17 full implementation.

Modernize Systems & Technology Goal complete.

Significant improvements to user experience/reporting for Bi360.

Build Collaborative Culture

Goal complete.

Agency increased involvement in cross-sector policy functions, including co-chairing Federal Reserve Bank of Boston Downtown Redevelopment Working

Group & participation in Small Business Growth Working Group. Plan in place to explore additional opportunities in FY17.

Increase Stakeholder Engagement Goal partially complete.

Increased use of technology to disseminate information, including but not limited to video of board presentations.

Strengthen Performance Manage-

ment Goal complete.

FY16 - Theme 3 Results at a Glance