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Home My Public Portal AboutExhibit 1 - Preliminary Approval Letter granted by the Governor Deval Pa...THE COMMONWEALTH OF MASSACHUSETTS EXECUTIVE OFFICE FOR ADMINISTRATION AND FINANCE DEVALL. PATRICK GOVERNOR GLEN SHOR SECRETARY athenahealth c/o Scott Susko McDermott Will & Emery 28 State St. Boston, MA 02109-1775 Dear Mr. Susko: STATE HOUSE • ROOM 373 BOSTON, MA 02133 TEL: (617) 727-2040 FAX: (617) 727-2779 www.mass.gov/anf The purpose of this letter is to inform you that the Preliminary Economic Development Proposal (the ''Proposal), attached as Appendix A, for the Watertown Arsenal (the "Project") submitted by athenahealth (the "Developer") for funding to support public infrastructure improvements (the "Public Infrastructure Project") under Sections 5 to 12 of Chapter 293 of the Acts of 2006, as amended by Chapter 129 of the Acts of2008, Sections 60-63 of Chapter 238 of the Acts of2012, and Chapter 287 of the Acts of2014 ("the Act"), is hereby contingently preliminarily approved for $25 million, subject to the conditions described below. This amount will be reserved for Final Approval until December 31, 2015. The process and requirements for approval of an Economic Development Proposal are set forth in regulations adopted under the Act. This letter addresses the requirements for preliminary approval set forth in 801 CMR 51.08. Unless otherwise defined, terms in this letter shall have the meanings assigned to them in the Act and in 801 CMR 51.02. 1. Requirements of 801 CMR 51.08(1) Preliminary Approval requires that the Secretary of Administration and Finance (the "Secretary'') determine that the Proposal is eligible for approval and that it is reasonably likely that the Proposal will satisfY the criteria identified in 801 CMR 51.03. Based solely and in reliance upon the Proposal and the Independent Consultant Analysis, attached as Appendix B, I find that the Proposal is eligible for contingent approval, subject to the conditions identified below. The Project shall not become eligible for final approval until the following conditions have been satisfied: (A) Based on the Preliminary Economic Development Proposal and the Independent Consultant Analysis, the Commissioner shall issue a Preliminary Certificate of the Commissioner regarding the estimated New State Tax Revenues that will result from the Preliminary Economic Development Proposal in accordance with 801 CMR 51.07(5); (B) Based on the Preliminmy Economic Development Proposal, the Independent Consultant Analysis and the Preliminary Certificate of the Commissioner, the Agency shall issue a Preliminary Certificate of the Agency as to the estimated Project Costs for the Public Infrastructure Improvements and the portion of such Project Costs that can be supported by the estimated New State Tax Revenues identified in the Preliminary Certificate of the Commissioner, using a 1.5 times annual coverage ratio, in accordance with 801 CMR 51.07(6). Prior to the issuance of the Preliminary Certificate of the Agency, the Secretary may waive the requirement that the Agency certifY as to the estimated Project Costs, provided that final approval by the Secretary shall require certification by the Agency of the estimated Project Costs; (C) The requirement that the Independent Consultant review and the Secretary approve of the feasibility and scope of public infrastructure improvements. The Secretary, at his or her discretion, may waive this requirement for the purposes of Preliminary Approval. 2. Requirements of 801 CMR 51.08(2) The Preliminary Approval Letter must also state the conditions that must be satisfied and confirmed prior to final approval of the Economic Development Proposal by the Secretary. Prior to issuing final approval by the Secretary of the Economic Development Proposal, under 801 CMR 51.13, the following conditions must be satisfied: (A) The Independent Consultant Analysis shall be updated to include an analysis of the feasibility and scope of public infrastructure improvements; (B) The Developer and the Municipality shall have jointly filed an application to the Secretary and the Agency for approval of the Economic Development Proposal and the application shall satisfY the requirements of801 CMR51.11 and51.12; (C) The Secretary shall have received copies of or, where applicable, shall have issued, each of the certificates and reports required nnder 801 CMR 51.13; (D) The Developer shall provide sufficient documentation that the Developer has funding or financial commitments satisfactory to the Secretary sufficient to fund the Costs of the Economic Development Project, exclusive of any Costs of the Public Infrastructure Improvements to be financed by Bonds to be issued by the Agency. These commitments shall include the commitment of the Developer's construction lender or lenders, on terms and conditions acceptable to the Secretary, to advance loan proceeds on the Dev~loper's behalf to pay for the costs of completing Public Infrastructure Improvements that are not being funded from proceeds of the Bonds, whether or not the construction lender's loan with the developer is in default, or such other security or assurance as the Secretary has determined to be acceptable. (D) The Developer shall provide sufficient documentation of the Developer's plan to (1) secure the obligations of its selected contractor or contractors to complete each of the Project Components and the Public Infrastructure Improvements with payment, performance and lien bonds which, in the case of the Public Infrastructure Improvements being funded in whole or in part from the proceeds of the Bonds, provide for the Developer and the Agency to be co-obligees under such bonds, and (2) secure its own obligation to complete the portion of the Public Infrastructure Improvements not funded by Bonds under the Act, or to provide other security satisfactory to the Secretary. The Secretary's approval of the Economic Development Proposal will be made conditional upon such security having been obtained prior to the issuance of the related Bonds; (E) The Developer shall provide evidence that the Municipality has established a Municipal Liquidity Reserve for the benefit of the Commonwealth for each Assessment Parcel within the Economic Development Project and has funded or has provided for the funding of such Reserve in an amount equal to twice the total maximum annual Debt Service due on the Bonds allocable to said Assessment Parcel; (F) The Developer shall provide documentation that it has established Commitments, as defined in 801 CMR 51.02, sufficient to generate the New State Tax Revenue required to meet Debt Service associated with the eligible Project Costs; (G) The Developer shall provide confirmation that no litigation or administrative proceeding is pending or, to the knowledge of the Developer, threatened which is likely to (1) prevent, delay or interfere in any material respect with the development of the Economic Development Project and the construction and completion of the Public Infrastructure Improvements as contemplated by the Economic Development Proposal, or (2) materially adversely affect the power and authority of the Developer to perform its obligations with respect to the Economic Development Project and the Public Infrastructure Improvements or (3) materially adversely affect the financial position of the Developer; (H) Developer shall provide confirmation that all environmental and other permitting required to carry out the Public Infrastructure Project has been obtained; and (I) The Developer shall provide confirmation that the Project has not received or will not receive additional forms of public assistance as identified in 801 CMR 51.03( 4), other than those either identified and expressly permitted in this letter or approved in writing by the Secretary in response to a written request for waiver if the Developer intends to receive such public assistance. (J) Satisfaction of any additional conditions of final approval included in the Preliminary Certificate of the Commissioner or the Preliminary Certificate of the Agency. 3. Requirements of 801 CMR 51.08(3) This Preliminary Approval Letter incorporates by reference the related Independent Consultant Analysis. 4. Requirements of 801 CMR 51.08(4) Under 801 CMR 51.08(4), I hereby declare that $25 million in Project Costs is contingently eligible for final approval. This contingent Preliminary Approval Letter of the Secretary is being provided to imd may be relied upon by the Developer and the Municipality solely for the purpose of determining whether the Preliminary Economic Development Proposal meets the conditions for preliminary approval by the Secretary. This contingent Preliminary Approval Letter of the Secretary may not be relied upon by any other party without the express prior written consent of the Secretary. This contingent Preliminary Approval of the Secretary may be updated one or more times prior to the approval of the Economic Development Proposal in accordance with the provisions of the Act and of 801 CMR 51.00 et seq. Signed on this '2 day ofJanuary, 2015. Secretary of Administration and Finance