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SOMERVILLE, MA-After months of wrangling, this city has finally reached an agreement to develop an IKEA home furnishing store in Assembly Square. As part of the agreement, the Swedish company will develop a mixed-use project on the site and will provide the city with a community benefits package.

According to Sean Fitzgerald, spokesperson for city Mayor Dorothy Kelly Gay, the sticking point was the language of the agreement, specifically with regards to out clauses and commitments. “The mayor wanted to make sure that the final document had the requisite enforceability clause so that the city could be sure that IKEA would do what was pledged,” Fitzgerald tells GlobeSt.com. Fitzgerald acknowledges that for IKEA the concept of committing to a mixed-use proposal in a tightening economy is difficult but he says the mayor “wasn’t going to jeopardize the long term stability and sanctity of the agreement. They were trying to put language in there that says, if the economy is good we’ll do it. The city needed a reasonable assurance that what they agreed to build would be built.”

What IKEA has agreed to build is a 250,000-sf store which includes a footprint of 160,000 sf and a 90,000-sf mezzanine. In addition, the company will develop 225,000 sf of office, retail and restaurant space on its site and provide the city with a $2.5 million community benefits package. This includes $1.9 million in infrastructure improvements to the city; $350,000 to landscape and construct a new park; $100,000 for an MBTA feasibility study; $100,000 for a new walkway; and $75,000 for public arts.

The IKEA store will become the city’s largest taxpayer, generating over $1.6 million in annual tax revenues. The proposed office space will generate an additional $700,000 in annual tax revenues. IKEA also has agreed to site improvements worth an estimated $25.7 million.

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