editor’s note: this article was updated with new information at 4:20 PM on 7/20/19.
A new project called “The Eruptor” is planned for North Amherst, on part of the Mitchell property on Montague Road. Taking advantage of the new federal Opportunity Zone program, known as the Tax Cuts and Jobs Act and a component of the 2017 Trump tax reform, the proposed “The Eruptor” seeks to build a multi-function research, incubation, and light manufacturing facility. The Eruptor website describes itself as bridging “cutting-edge technologies and advanced digital fabrication within a lush, rural setting less than 1.5 miles away from the flagship campus of the University of Massachusetts.”
The Eruptor’s slogan is “Creating a place where volcanic ideas are erupted and fabricated,” and it presents itself as an environmentally sensitive, modern facility that integrates a range of high-tech programs, which could increase Amherst’s tax-base.
The project’s website says the proposed endeavor will combine project incubation, light manufacturing, 3-D printing, convening creative people, and product innovation. The project will provide its clients (both on- and off-site) with data mining services, that are deemed critical for micro-targeting required by high-tech development.
The property involved is part of the Mitchell farm, which is zoned Professional Research Park (PRP), and, therefore, intended by the Amherst Zoning Bylaw to be developed. The Mitchell family has taken advantage of chapter 61A which allows for a one-year tax advantage for land kept in farming. But now the property is under contract with The Eruptor, according to project Senior Advisor Barry Roberts. While the Mitchell farm is on Montague Road, the proposed project would be approached from Sunderland Road. There are other PRP sites in Amherst but they are smaller or have prohibitive wetlands. While there are wetlands on the Mitchell parcel, the property is nonetheless seen by the developers as suitable for this kind of development, according to Roberts.
Leading the project is Rudy Vogel, the founder of nuForj, the parent organization of The Eruptor. Vogel was raised in Springfield and has had a career in international business development. He said he decided to return to his hometown and apply his skills to local economic development needs and has been working on the Amherst project for the last four years. He describes himself as someone who knows from experience how to effectively maneuver through uncharted waters; a globalist and thought provoker. His past work includes a project with the State Department on the Free Trade Agreement with Bahrain, a vodka exporting business in Poland and helping a Jamaica Flour Mill find markets in the U.S.
Joining Vogel are three local men: Barry Roberts, Stan Rosenberg and John Armstrong. Roberts is a prominent local developer and ‘townie,’ known for his community contributions and long-time commitment to Amherst (he was a major supporter of Amherst Cinema, for example). His role with this project has been to facilitate project development and navigate the Amherst zoning code. In an interview he said that 1/3 of the space needed is already “committed.” “Industry wants to be associated with the best and brightest at UMass,” he said, “And that’s what we want. We want the professors and kids to have a chance to work with these major companies. That’s how they’ll learn.”
Rosenberg is our former State Senator and Senate President who has been recruited to facilitating the political process of getting the project approved by Town government. He said he has met with each member of the Town Council, individually, and with the Town Manager, Planning Department and Economic Development Director, as well as with State Representative Mindy Domb and Senator Jo Comerford’s staff.
“When asked by this reporter whether it is appropriate for a private development project to meet in Town Hall with political leaders, he said, while they would never meet in a government building with investors, it’s appropriate to brief town staff and elected leaders where they work. According to some councilors who met with Rosenberg, he made no specific “ask” other than expressing hope that the council and the town will support the project down the road.
In off-the-record conversations this reporter had with a cross-section of the Town Councilors, there is significant potential support for the project. Councilors note the PRP zoning which is appropriate for the project and hope it could attract new businesses that could spin off, creating additional benefits. Two councilors noted the positive impact on our local economy of business development, compared with housing development which, while creating valuable housing, does little to create jobs and spur on-going economic development. Three Councilors with whom this reporter spoke, while leaning in favor, are holding off their opinions until they have had a chance to hear from constituents, after the project has become public. Several Councilors did not return this reporter’s calls.”
Armstrong, a long-time philanthropist in Amherst, in an advisor to nuForj but not a decision maker. Roberts, Rosenberg and Armstrong are not being paid but will benefit financially down the road if and when the project is successful.
The Eruptor seeks to take advantage of Opportunity Zones, a component of Trump’s 2017 signature tax law, designed to help the most blighted urban neighborhoods, post-industrial wastelands, and impoverished rural areas. The program gives investors a deferral of capital gains taxes until 2026 and reduces the portion of those gains that is taxable by 10% for investors who stay invested for 5 years and 15% for those who stay in for 7 years. And for investments held for at least 10 years, investors pay no taxes on capital gains produced through their investment in Opportunity Funds (the investment vehicle that makes investments in Opportunity Zones).
The government only issued its 169-page proposed regulations in April 2019, 2 years after the 2017 tax law was passed, reflecting tension between Trump officials looking out for investors and those in Treasury concerned about maximizing benefits to struggling Americans, tension described in a March 17, 2019 New York Times article. The regulations continue to be controversial, in part because some economists feel there are inadequate mechanisms in place to gather data necessary to evaluate the program.
The process by which the specific Opportunity Zones were selected is also controversial, and described in an Urban Institute analysis. A portion of the sites were selected by state governors, based on a set of federal criteria. The Urban Institute research questions how those state decisions were made. An earlier criticism of the Opportunity Zones that apparently has been addressed in the new regulations was that the economic development would attract condos and apartments rather than job-creating businesses. While housing is needed, particularly for low-income families, housing doesn’t create long-term jobs and doesn’t fuel on-going economic development.
North Amherst probably qualified as an economically troubled part of the country because it has 9 apartment complexes (with a 10th, the Beacon Project in the new Mill District, opening in a few weeks) and the residents of these apartments are students or low-income families, a combined demographic that is statistically low-income. The primary economic activity in North Amherst is listed as farming, another traditionally low-income group. Furthermore, single-family homes in North Amherst are significantly more modest than those in the southern, central and eastern parts of town. The Mill District and the Beacon project are the other North Amherst projects taking advantage of being in the Opportunity Zone.
Questions that may be asked in the months to come, as the project advances, include: Given the considerable wetlands on the property, will there be enough space for this development? Will this project compromise farming in the area? Will the Town be willing to pay for extending utilities to the site before there is any tax return to the town? Will the Town be tempted to award tax waivers, with hopes of future income? Will the project cover any of the upfront costs to the Town? Who will pay for the utilities for the site? How will the project affect traffic patterns and traffic? Will the project be committed to connecting in a positive way with the neighborhood?