The City Council voiced concern that the agreements had changed often but did approve the leases for the Berkshire Innovation Center.

PITTSFIELD, Mass. — The City Council had reservations about the lease and grant agreement for the Berkshire Innovation Center but unanimously approved the documents, keeping the project on track.

 

The building is being constructed through a grant from the Massachusetts Life Sciences Center for a total of $9.7 million.

 

The building will be a cooperative space with various companies in the life sciences and advanced manufacturing industries using the areas for research and development. It will be overseen by the newly formed nonprofit Berkshire Innovation Center Inc. and will be constructed at the William Stanley Business Park.

 

Leases for the building and the land, a tax increment financing package, agreements to transfer properties, and agreements on reimbursement have now all been approved by the City Council, but with some reservations.

 

"It just feels like the thing won't sit still. It seems every time it comes to a council meeting, something has changed," Ward 5 Councilor Jonathan Lothrop said.

 

Councilor at Large Kathleen Amuso voiced similar concerns saying, "I feel like this is a bouncing ball."

 

The most recent change raising concern on the council is an agreement between Berkshire Innovation Center Inc. and the city in which the city agrees to delay asking for reimbursement of the construction funds until after the BIC is reimbursed for the equipment purchases by the state science center. The city is allocating $2 million of the grant to the BIC board to purchase the equipment while the city is also bonding $7.6 million for the construction. 

 

Mass Life Science Center has a schedule for reimbursement that provides only small portions of the total spent in fiscal years 2015 and 2016, nothing in 2017, and then the majority in 2018. The state will provide reimbursement to whichever entities submit the invoices first.

 

"We have to carry the interest cost through fiscal 17 to July 2017, which is the start of fiscal year 18," said Councilor at Large Barry Clairmont.

 

In total, the city will incur $133,000 in interest costs for the project. With the new agreement to hold off on reimbursement and allow the BIC to get paid back first, the city will take on an estimate $7,000 in additional interest.

 

"We think the total impact on the city is $7,000 plus on a $10 million project," said attorney Jesse Cook-Dubin, who represents BIC.

 

Cook-Dubin said the agreement helps BIC bridge that gap. The city gets lower interest rates than the nonprofit will get so the impact of a year without reimbursement is more significant to the BIC, he said. 

 

Clairmont, however, questioned why the BIC is getting to spend the money in the first place. The councilor said he thought the city would be doing the purchasing and then giving the equipment to the BIC. The City Council had previously approved the agreement for the city to provide the $2 million to BIC. 

 

Cook-Dubin said the agreement was changed earlier in the process because BIC officials have more expertise in the equipment and can do a better job at finding and purchasing it than the city's staff could do.

 

"We didn't think it was logical to put that task on a city purchasing agent," Cook-Dubin said. "We know who will be doing the purchasing for the BIC and we trust them. This is an area where a small mistake could become a big problem."

 

Another concern of Clairmont's is that the state still reserves the right to pull the plug on the project. Clairmont successfully received the support of the rest of the council in adding a clause that says if the state terminates the grant and the BIC hasn't spent that $2 million, it is returned to the city. 

 

"I do certainly have a concern about it and I do want to make sure that if the plug does get pulled, we don't get stuck with another $2 million that taxpayers then have to bond," Clairmont said.

 

Ward 6 Councilor John Krol said he's seen other projects or programs be cut midway through so that agreement makes sense. Mayor Daniel Bianchi too supported the amendment.

 

The building isn't expected to be finished with construction until October 2016 so councilors also had concern about the timing of the equipment purchases. Essentially, some councilors wanted to know if the equipment would be purchased and then stored while construction is ongoing. If so, will that equipment be obsolete if there are any delays?

 

BIC Executive Director Rod Jane said the board is very aware of changing technology and in intentionally buying equipment that'll be useful for years to come. He said it is the materials — such as the plastics for a 3D printer — that change more than the equipment itself. The board is being conservative with the materials purchases as well.

 

"We pick ones we think will be around for a long period of time," Jane said. "We don't want to bring in equipment that is likely to go obsolete."

 

The City Council had already approved the tax incentive and on Tuesday cast the votes for the leases. The leases include a 20-year building lease, which starts after the building in constructed, and a 51-year lease on the ground. 

 

"This is the toughest vote I am ever going to take," Clairmont said. "This is risky."