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Gov. Charlie Baker, flanked by Lt. Gov. Karyn Polito and Housing and Economic Development Secretary Jay Ash releases his economic development proposal on Jan. 28, 2016.

(SHIRA SCHOENBERG / THE REPUBLICAN)

BOSTON - Gov. Charlie Baker is proposing a $918 million state investment in economic development over the next five years.

The money would be borrowed and spread across numerous programs, many of which provide grants to municipalities. Several programs could help Western Massachusetts, whether by providing money to assemble new sites for industrial development or funding projects that transform downtown areas.

"We recognize that Boston's economy isn't necessarily the state's economy, and many communities outside of Boston don't have the same success in attracting, attaining and growing jobs," said Lt. Gov. Karyn Polito. "There's enormous appetite across our commonwealth for more economic activity."

Baker said a lot of the money is being put into broad grant programs so each community can develop the industry that fits it - such as the aerospace industry in the Pioneer Valley. "Different parts of the state are driven by different elements," Baker said.

Baker rolled out his economic development proposal Thursday, a day after he released his annual budget proposal. It must still be passed by the Legislature to be enacted.

The biggest single portion of Baker's proposed investment would be $500 million for MassWorks, a program started under former governor Deval Patrick that gives grants to cities and towns for public infrastructure that promotes economic development.

In 2015, nearly 50 projects received $85 million in MassWorks grants. In prior years, the program distributed between $38 million and $79 million. Projects funded in 2015 included upgrading utility systems to allow for the redevelopment of the West End Mill District in Chicopee; remediating the abandoned Garbose Metal Factory in Gardner; and redeveloping the Lyman Terrace public housing property in Holyoke.

Baker called MassWorks one of the Patrick administration's "smartest and best and boldest moves."

"Taking a whole series of separate and non-related, disjointed economic development programs and incorporating them into a single operating model that could be used to support a whole variety of economic development, housing development and downtown initiatives was a really smart move," Baker said.

One proposal relevant to Western Massachusetts is $50 million for Transformative Development Initiative grants to support the revitalization of Gateway Cities, struggling cities that could anchor regional economies.

MassDevelopment, a quasi-public agency, previously used $5 million for a pilot program that allowed the agency to buy buildings in distressed areas and redevelop them. Their first project was in Springfield's Stearns Square, where they bought the Skyplex bar building. Other districts that are part of the initiative are in Holyoke and Pittsfield.

"The $50 million will be a significant help to get the program off the ground in many more places," said Anne Haynes, director of the Transformative Development Initiative.

Another $118 million would go toward the Massachusetts Manufacturing Innovation Initiative to provide grants for public-private research institutes to research emerging manufacturing technologies. Two projects, which also get federal and private funding, are already underway, researching photonics and electronics, and Massachusetts officials hope for federal funding to research revolutionary fibers.

Baker is proposing another $25 million for a grant program to help university-led research programs bring emerging technologies to market and $25 million for grants for innovation efforts such as co-working spaces and artist spaces.

Baker previously announced his intention to set aside $75 million to expand vocational and career schools.

Other investments would include $75 million to clean up contaminated brownfields; $25 million for site assembly to support major commercial or industrial development; and $25 million to support "smart growth" housing, generally dense housing developments.

Baker said the site development money is particularly important outside Greater Boston. Companies looking to relocate often want the cheaper land that exists outside of Boston, but only if they can find a site with utilities, transportation and permits. If the state cannot prepare parcels of land in advance for developers,

"You're going to miss some opportunities to provide economic development opportunities outside 495," Baker said.

The brownfields redevelopment money could also be used to clean up sites outside of eastern Massachusetts that could attract developers, said Secretary of Housing and Economic Development Jay Ash. "Assembling, cleaning and permitting of land allows communities to say we're ready to go," Ash said.

The brownfields redevelopment fund is now down to $650,000.

The bill also proposes technical changes to other programs, removing regulations and giving communities flexibility in using state programs like tax incentives, zoning regulations and financial incentives for development.

The bill would loosen the state's liquor licensing regulations to make it easier for farmer-brewers and distillers to sell alcohol at farmers' markets, to allow alcohol retailers to serve drinks at restaurants, and to make it easier for local breweries to sell beer.

Currently, Ash said, a farmer who brews beer can sell his corn and tomatoes at a farm-stand but not his beer. "We don't think that's right," Ash said.

Ash said the administration wants to make it easier for breweries to open in Massachusetts. "Breweries bring the millennials, the millenials create a buzz, the buzz creates activity that turns around an economy," Ash said.

The Retailers Association of Massachusetts criticized one provision of Baker's proposal, which would exempt fulfillment centers - for example, an Amazon distribution center - from laws requiring workers to be paid time and a half on Sunday.

"Not included was an equal reform or exemption for real Massachusetts retail employers on Main Street or in struggling malls. To say RAM is disappointed in the Baker Administration is an understatement," Association President Jon Hurst said in a prepared statement.

The State House News Service reported that the state is in danger of bumping up against its $21.7 billion debt ceiling in fiscal year 2017, due to large numbers of capital projects, particularly in transportation. That means the state would not be able to borrow more money unless the Legislature raises the ceiling.

State finance officials say the cap could be hit at the end of 2017 or in 2018, depending on the status of the MBTA's Green Line extension.

But they say there will be room for the proposed economic development projects. Even if the Legislature authorizes borrowing money for these projects, the governor would still have to allocate money each year in his capital budget. So the amount that is actually spent would be up to Baker, who must weigh the economic development projects against other capital investments. The state's total capital budget can increase by up to $125 million a year.