Financing Climate Resilient Infrastructure for Boston’s Waterfront

The South Boston Waterfront teems with life both on weekdays and weekends, being home to a myriad of life science and biotech companies, corporate headquarters, consulting firms, and tech startups. It has been one of the fastest growing urban neighborhoods in Massachusetts, with over 10 million square feet of office, retail, residential, and lab space added just between 2010-2013. Juxtaposed with this rapid growth is the reality that the South Boston Waterfront is also one of the most vulnerable neighborhoods to coastal flooding, with multiple storm events flooding the district’s main streets and walkways in recent years.

At the far east end of the Waterfront district, the City of Boston owns, operates, and leases out 190 acres of industrial land, referred to as the Raymond L. Flynn Marine Industrial Park. Given the recent flood events and imminent threats posed by sea level rise, the City conducted a planning study in 2018 to understand what it would take to floodproof the Industrial Park. The City’s preliminary assessment of the infrastructure cost was over $200 million dollars. The City started to consider a broad range of financing options to pay for the improvement. Traditional sources of capital, such as grants and municipal bonds, were considered. However, amidst the strong economic and development climate that has been in place since the 2010s, the City realized that this demand for growth could be leveraged to partially finance the infrastructure project. The basic idea is that the City would allow office, laboratory, and hotel developers to build on the city-owned parcels in the Industrial Park, and in return, these developers would be responsible for partially paying the infrastructure cost.

This case study documents how Boston’s Climate Resiliency Infrastructure Contribution Program came about and analyzes its key design innovations. Given the nascency of the Program, its outcomes are difficult to measure. Nevertheless, there are lessons to be learned from turning a novel financing idea into a concrete policy solution. Boston’s experience suggests that cities can leverage public land and land use regulation power to develop a novel financing mechanism and how to design such a financing mechanism to get stakeholders on board.