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Commercial Real Estate

Lots of Potential

 

Evan Plotkin, left, with parking attendants Joe Martin, middle, and Damien Denesha

Evan Plotkin, left, with parking attendants Joe Martin, middle, and Damien Denesha at the new service just outside 1350 Main St.

Valet parking isn’t exactly a novel concept; banquet halls, restaurants, and hospitals have been offering that service for years, if not decades. But it is when it comes to downtown Springfield’s office towers. One Financial Plaza recently introduced the concept, and in a few weeks, it is living up the promise first foreseen a decade ago.

Evan Plotkin says he first conceived of the idea of instituting valet parking at 1350 Main St. in downtown Springfield — the office tower he co-owns — almost 10 years ago.

Then, as now, he thought the service would bring a needed, higher level of convenience to people visiting professionals and other tenants in the tower, take some off the rough edge off Springfield when it comes to the issues of parking and enforcement of same — matters that can keep some from even venturing into the city to do business — and be another selling point when it comes to attracting new tenants and prompting existing tenants to re-up.

So why did it take a decade for the concept to become reality and, according to early projections, fulfill all that promise?

“I couldn’t really afford it back then,” said Plotkin, who laughed as he said that but was nonetheless quite serious with his tone. But there were other reasons as well, ranging from the economy — that was the height of the recession — to some logistics (getting all the needed approvals from the city), to a vibrancy level that needed to still come up a notch for this to really work. Or two notches. Or three.

All of those issues, including the notches of vibrancy, are now being referred to with the past tense, or certainly will be when MGM Springfield opens its doors in a month. So Plotkin and the other owners of 1350 Main have made that dream from a decade ago a reality, and they’re off to a fast start, by Plotkin’s estimates, with this valet parking venture, which also serves visitors of neighboring City Hall, the county courthouse a block or so away, and other nearby facilities, at the start of this month.

That was the Fourth of July week, as you’ll recall, so the numbers have to be kept in perspective, said Plotkin, adding that those first few days, the attendants were parking 25 to 30 cars a day. By early the next week, the numbers had doubled, and on July 12, a Thursday, they parked 73 cars.

“And I think those numbers will just continue to grow as more people become aware of the service,” said Plotkin, adding that roughly half of the customers thus far have been visitors to City Hall, more than a third have ventured to 1350 Main, and the rest have had other destinations in mind.

The service, managed by Valet Park of America, is roughly as expensive as traditional parking, said Plotkin, noting that the cost is $2 for 20 minutes or less (enough time for a quick visit to tenants at 1350 Main or offices in City Hall), $4 for visits ranging from 20 minutes to two hours (enough time to go the gym on the building’s ninth floor), and $2 for each additional hour after that. Several tenants at 1350 Main already provide vouchers to visitors to cover the cost of the service, just as they would with normal parking.

The service, operated on what’s known as City Hall Place, has a few spaces right outside City Hall, roughly two dozen more in the Civic Center Parking Garage, and more in the lots under I-91, said Plotkin, adding that, with the way the concept is catching on, more may be needed.

This isn’t exactly a novel idea — valet parking has been used by banquet facilities, restaurants, and hospitals for years now. But it is for an office tower, at least in this market, said Plotkin, adding that, as he surveyed a changing landscape downtown and pending changes, especially MGM, he decided it was time to execute that plan he first conceived all those years ago.

“We looked at what was happening downtown, and the construction for MGM and the [I-91] viaduct creates a lot of conversation about parking, and it’s always pretty negative,” he explained. “I really wanted to get ahead of all that with our building.”

Elaborating, he said 1350 Main St. doesn’t have any structured parking (an attached garage or lot) and has historically been challenged by having to rely on nearly facilities. And with MGM set to open, that challenge, and the perception of parking issues, would only grow.

“Visitors there will utilize that garage, but they’ll also be looking for other places to park,” he noted. “And what happens is that regular people who just want to do business downtown will have this fear that it’s going to be challenging to find a space. People will say, ‘it’s a hassle; I don’t want to feed a meter all day.’”

Thus far, the service is doing just what he thought it would. It’s providing that layer of convenience for visitors, his tenants seem to like the service and consider it added value, and, in Plotkin’s mind, it’s helping to put a friendlier face on downtown Springfield.

Or at least a strong counter to the parking patrol that polices the central business district. Those individuals are just doing their jobs, he said, but they put visitors to the downtown area and his building on edge — and sometimes dent their wallet.

Valet service is “putting a positive face on parking in Springfield,” said Plotkin, who has been a tireless promoter and supporter of Springfield and especially and its downtown, and was recognized by BusinessWest as one of its Difference Makers for 2018 for those efforts. “There’s a negative connotation with those meter maids. People don’t like to get $50 tickets; they see those people coming, and they run out of the middle of a meeting or a lunch to put quarters in the meter.”

He said the arrival of MGM Springfield will certainly drive the numbers at the valet service higher and bring the business venture closer to and eventually past the break-even point he knew he couldn’t reach a decade ago.

Damien Denesha, recently named manager of this site by his employer, Valley Park of America, agreed.

“Once MGM opens, there will be a lot more people downtown, and parking will become more difficult,” he told BusinessWest. “Demand for this service will certainly grow.”

It took a decade for the concept Plotkin first put on paper to become reality. But thus far, the service seems to have, well, lots of potential, in every sense of that phrase.

George O’Brien can be reached at [email protected]

Commercial Real Estate

Making a Move

Two architect’s renderings of the planned new home of Way Finders at the site of the Peter Pan bus station.

Two architect’s renderings of the planned new home of Way Finders at the site of the Peter Pan bus station.

The nonprofit group Way Finders, formerly known as HAPHousing, has released renderings of the new 35,000-square-foot home it intends to build on the site of the soon-to-be abandoned Peter Pan Bus station. The move to the North End will bring benefits for the agency and its many types of clients, but it will also generate momentum — and economic development — at two locations, a trickle-down effect not always seen with relocations of this type.

From the start, Peter Gagliardi said, the goal was to find something on the major bus routes and, preferably, near the bus station.

Turns out, he accomplished all that and then some.

Indeed, the new home for Way Finders, formerly HAPHousing, will be the bus station — or the old bus station, to be more precise, the long-time home to Peter Pan Bus Lines. Which just happens to be across Main Street from the new bus station, the renovated, 90-year-old Union Station.

“I had really hoped that we would have a place near the bus station, but I never expected that we would buy the bus station — you can’t get any closer than that,” said Gagliardi, long-time CEO of the agency, which rebranded to Way Finders last fall in a reflection of its broadened mission.

But this ambitious, $15 million project (that’s the latest estimate) will achieve much more than added convenience for and clients served by Way Finders, many of whom don’t own cars or have reliable transportation, said Gagliardi.

It will also become an important additional component of broad revitalization efforts in downtown Springfield and especially the area just north of the Arch — and a likely catalyst for still more, he noted. It will also bring roughly 200 workers to that area, providing opportunities for service businesses already in that quadrant and those looking to expand into it. And it will give a growing, evolving agency the room and the facilities to better serve clients and continually expand its portfolio of services.

Indeed, a nonprofit that was once focused mostly on securing housing for those who could not afford it has morphed into a truly multi-faceted agency focused on everything from financial education to helping individuals buy a home to assisting them with finding employment so they can rent a home or apartment.

“Because there’s not enough housing to go around, we’re helping people avoid homelessness by becoming employed,” said Gagliardi, obviously proud of the results generated by this relatively new initiative. “We’ve placed about 560 people over the past four and half years, and at the end of 12 months, 80% to 90% of those people are still employed. We don’t have [housing] vouchers for everyone, so we tell people employment might be their best bet.”

But while this relocation will bring many benefits to Way Finders and its many clients, there will be a trickle-down effect as well, and one not always seen when a large employer leaves one home for another.

Peter Gagliardi says the new Way Finders headquarters will be a solid addition to Springfield’s North End.

Peter Gagliardi says the new Way Finders headquarters will be a solid addition to Springfield’s North End.

Indeed, this relocation, announced late last year, is not a case of musical chairs — the commercial real-estate variety, anyway — a phrase that brokers and those involved in economic development like to use when a tenant within a property abandons it for something similar a few miles or even a few blocks away.

Such moves often don’t have a significant net impact on the real-estate market or the economy of the area in question, experts say, because the only thing that’s really changing is the tenant’s street address.

In the case of Way Finders, so much more is changing. It’s soon-to-be-former home in Springfield — the agency also has an office in Holyoke — at 322 Main St. in the South End has been acquired by Balise Motor Sales. And while no plans have been announced, it seems likely that property will be put to new and different use as Balise expands its already considerable footprint in that part of the city.

Meanwhile, Way Finders’ move to the North End, coming as Peter Pan moves its employees into Union Station, provides another shot of adrenaline for a section of the city that had been mostly dormant for years.

To borrow a phrase used often in business and politics, this move would appear to constitute a win-win-win for the South End, the North End — and specifically Union Station — and the nonprofit agency and its clients. Maybe that’s a win-win-win-win.

In any case, for this issue and its focus on commercial real estate, BusinessWest takes a look at this relocation and its many implications.

Space Exploration

As he talked about how Way Finders arrived at that press conference where its purchase of the Peter Pan property for $2.75 million was announced, Gagliardi said the seeds for that acquisition were planted quite some time ago.

To make a long story somewhat short, the nonprofit has grown significantly over the past several years as its mission has been expanded, he explained, adding that the workforce, or at least those members of it working in Springfield, outgrew the property at 322 Main St. a few years ago.

“We were comfortable at 120 people, but not at 160,” said Gagliardi as he got specific with the numbers of employees working at that site a few years ago. “It really compromised the quality of the space the staff was working in, and it also cramped the quarters we were using to work with clients; our foot traffic just kept increasing, especially with the issue of homelessness and people trying to keep a roof over our heads.

“It was getting to be untenable,” he went on, adding that parking was another issue, especially after MGM acquired the former Orr Cadillac property (Way Finders was leasing 40 parking spaces there) and converted it into the new Springfield Rescue Mission and Balise acquired an adjacent property, eliminating another 25 spaces. “The handwriting was on the wall. It was a 15,000-square-foot parcel with a 13,000-square-foot building; there wasn’t even room to put in a dumpster.”

By that time, “Balise had us surrounded,” said Gagliardi, adding that the car company had acquired several parcels around 322 Main St., and the logical step for Way Finders was to offer that building as the next addition to the portfolio, lease back office space and parking spaces, and commence a search for a new headquarters.

Which it did, while also moving about 40 employees to a large suite of offices on Maple Street, just a few blocks away.

As for that search, a request for proposals yielded several options for buying and especially leasing space, said Gagliardi, acknowledging the obvious — that a stable, growing nonprofit with roughly 200 employees would be a very attractive tenant for a number of landlords in the city.

The bus station became one of those options, he went on, adding that, after careful consideration, it became the best option, for reasons ranging from location — that first consideration in commercial real estate — to the footprint’s size and flexibility, especially with regard to parking (there will be room for 180 spaces).

Being near the new bus station, or transportation center (there is rail service at Union Station as well) was a big factor, he told BusinessWest.

“We needed a place well served by public transportation because a lot of our clients don’t have cars or don’t have reliable vehicles,” he explained. “And we have a lot of staff that live in the city and could use buses if they were convenient.”

Initially, the thought was to renovate the existing facilities at the bus station, said Gagliardi, adding that a detailed review determined that new construction would allow better utilization of the footprint and better service to clients.

“We looked at it closely, but the cost of bringing facilities up to code was substantial,” he said. “It would cost even more to do it as new, but a new building will be far more energy-efficient than we can make the old one; it will be a much more efficient use of space. The end result was that it just made more sense to do this.”

Way Finders, which recently took title to the property, is in the process of putting together financing for the project, said Gagliardi, adding that it will include New Markets Tax Credits, a tax-exempt bond through MassDevelopment, and significant fundraising, perhaps a total of $3 million to $4 million. The goal is to move in by September 2019.

As for that trickle-down effect mentioned earlier, often there isn’t much of that phenomenon with moves such as this, only that musical-chairs outcome seen in this city and many others when new properties are constructed.

“Often, with relocations like this, you’re worried about the place left behind,” said Kevin Kennedy, Springfield’s chief Development officer, adding that this thought process went through his mind even on projects like the new federal courthouse on State Street, an initiative he led as an aide to U.S. Rep. Richard Neal. The new facility changed the landscape on State Street and greatly upgraded the facilities for the court — but it also left a huge vacancy at 1550 Main St.

That property rebounded nicely and is now home to a diverse group of new tenants, but such bouncebacks don’t always occur.

With Peter Pan relocating to Union Station, the bus station would be left behind, said Kennedy, adding that Way Finders’ relocation was both a quick and extremely positive reuse of a highly visible piece of property.

“To get a brand new building there with a significant number of employees was a good result,” he said in a voice that certainly conveyed understatement, adding that the second parcel to be left behind, 322 Main St., will likely have an equally positive outcome.

“With a family like Balise that has accumulated a significant amount of property in that area, I expect a that we’re going to see a significant development there that will be good for the city and good for the tax base,” he told BusinessWest.

Room for Improvement

All that certainly constitutes a win-win-win, with maybe a few more wins as well.

It started with a desire to be near the bus station and ended with a purchase of the bus station. That wasn’t the expected route, to borrow a phrase from the transportation business, but this relocation will help several parties get to their desired destinations.

“We could have gone outside the city; we could have done something in an industrial park,” said Gagliardi. “But that wouldn’t have been good for our clients or good for the city. The idea that someone that can hop on a bus in Chicopee, take it to Union Station, and walk across the street is a good thing.

“We’d like to be part of the good stuff that’s happening this city,” he went on, adding that this relocation, not to mention the agency’s many initiatives to improve quality of life for area residents, will certainly make that a reality.

George O’Brien can be reached at [email protected]

Commercial Real Estate Sections

Making a Move

Two architect’s renderings of the planned new home of Way Finders at the site of the Peter Pan bus station.

Two architect’s renderings of the planned new home of Way Finders at the site of the Peter Pan bus station.

The nonprofit group Way Finders, formerly known as HAPHousing, has released renderings of the new 35,000-square-foot home it intends to build on the site of the soon-to-be abandoned Peter Pan Bus station. The move to the North End will bring benefits for the agency and its many types of clients, but it will also generate momentum — and economic development — at two locations, a trickle-down effect not always seen with relocations of this type.

From the start, Peter Gagliardi said, the goal was to find something on the major bus routes and, preferably, near the bus station.

Turns out, he accomplished all that and then some.

Indeed, the new home for Way Finders, formerly HAPHousing, will be the bus station — or the old bus station, to be more precise, the long-time home to Peter Pan Bus Lines. Which just happens to be across Main Street from the new bus station, the renovated, 90-year-old Union Station.

“I had really hoped that we would have a place near the bus station, but I never expected that we would buy the bus station — you can’t get any closer than that,” said Gagliardi, long-time CEO of the agency, which rebranded to Way Finders last fall in a reflection of its broadened mission.

But this ambitious, $15 million project (that’s the latest estimate) will achieve much more than added convenience for and clients served by Way Finders, many of whom don’t own cars or have reliable transportation, said Gagliardi.

It will also become an important additional component of broad revitalization efforts in downtown Springfield and especially the area just north of the Arch — and a likely catalyst for still more, he noted. It will also bring roughly 200 workers to that area, providing opportunities for service businesses already in that quadrant and those looking to expand into it. And it will give a growing, evolving agency the room and the facilities to better serve clients and continually expand its portfolio of services.

Indeed, a nonprofit that was once focused mostly on securing housing for those who could not afford it has morphed into a truly multi-faceted agency focused on everything from financial education to helping individuals buy a home to assisting them with finding employment so they can rent a home or apartment.

“Because there’s not enough housing to go around, we’re helping people avoid homelessness by becoming employed,” said Gagliardi, obviously proud of the results generated by this relatively new initiative. “We’ve placed about 560 people over the past four and half years, and at the end of 12 months, 80% to 90% of those people are still employed. We don’t have [housing] vouchers for everyone, so we tell people employment might be their best bet.”

But while this relocation will bring many benefits to Way Finders and its many clients, there will be a trickle-down effect as well, and one not always seen when a large employer leaves one home for another.

Peter Gagliardi says the new Way Finders headquarters will be a solid addition to Springfield’s North End.

Peter Gagliardi says the new Way Finders headquarters will be a solid addition to Springfield’s North End.

Indeed, this relocation, announced late last year, is not a case of musical chairs — the commercial real-estate variety, anyway — a phrase that brokers and those involved in economic development like to use when a tenant within a property abandons it for something similar a few miles or even a few blocks away.

Such moves often don’t have a significant net impact on the real-estate market or the economy of the area in question, experts say, because the only thing that’s really changing is the tenant’s street address.

In the case of Way Finders, so much more is changing. It’s soon-to-be-former home in Springfield — the agency also has an office in Holyoke — at 322 Main St. in the South End has been acquired by Balise Motor Sales. And while no plans have been announced, it seems likely that property will be put to new and different use as Balise expands its already considerable footprint in that part of the city.

Meanwhile, Way Finders’ move to the North End, coming as Peter Pan moves its employees into Union Station, provides another shot of adrenaline for a section of the city that had been mostly dormant for years.

To borrow a phrase used often in business and politics, this move would appear to constitute a win-win-win for the South End, the North End — and specifically Union Station — and the nonprofit agency and its clients. Maybe that’s a win-win-win-win.

In any case, for this issue and its focus on commercial real estate, BusinessWest takes a look at this relocation and its many implications.

Space Exploration

As he talked about how Way Finders arrived at that press conference where its purchase of the Peter Pan property for $2.75 million was announced, Gagliardi said the seeds for that acquisition were planted quite some time ago.

To make a long story somewhat short, the nonprofit has grown significantly over the past several years as its mission has been expanded, he explained, adding that the workforce, or at least those members of it working in Springfield, outgrew the property at 322 Main St. a few years ago.

“We were comfortable at 120 people, but not at 160,” said Gagliardi as he got specific with the numbers of employees working at that site a few years ago. “It really compromised the quality of the space the staff was working in, and it also cramped the quarters we were using to work with clients; our foot traffic just kept increasing, especially with the issue of homelessness and people trying to keep a roof over our heads.

“It was getting to be untenable,” he went on, adding that parking was another issue, especially after MGM acquired the former Orr Cadillac property (Way Finders was leasing 40 parking spaces there) and converted it into the new Springfield Rescue Mission and Balise acquired an adjacent property, eliminating another 25 spaces. “The handwriting was on the wall. It was a 15,000-square-foot parcel with a 13,000-square-foot building; there wasn’t even room to put in a dumpster.”

By that time, “Balise had us surrounded,” said Gagliardi, adding that the car company had acquired several parcels around 322 Main St., and the logical step for Way Finders was to offer that building as the next addition to the portfolio, lease back office space and parking spaces, and commence a search for a new headquarters.

Which it did, while also moving about 40 employees to a large suite of offices on Maple Street, just a few blocks away.

As for that search, a request for proposals yielded several options for buying and especially leasing space, said Gagliardi, acknowledging the obvious — that a stable, growing nonprofit with roughly 200 employees would be a very attractive tenant for a number of landlords in the city.

The bus station became one of those options, he went on, adding that, after careful consideration, it became the best option, for reasons ranging from location — that first consideration in commercial real estate — to the footprint’s size and flexibility, especially with regard to parking (there will be room for 180 spaces).

Being near the new bus station, or transportation center (there is rail service at Union Station as well) was a big factor, he told BusinessWest.

“We needed a place well served by public transportation because a lot of our clients don’t have cars or don’t have reliable vehicles,” he explained. “And we have a lot of staff that live in the city and could use buses if they were convenient.”

Initially, the thought was to renovate the existing facilities at the bus station, said Gagliardi, adding that a detailed review determined that new construction would allow better utilization of the footprint and better service to clients.

“We looked at it closely, but the cost of bringing facilities up to code was substantial,” he said. “It would cost even more to do it as new, but a new building will be far more energy-efficient than we can make the old one; it will be a much more efficient use of space. The end result was that it just made more sense to do this.”

Way Finders, which recently took title to the property, is in the process of putting together financing for the project, said Gagliardi, adding that it will include New Markets Tax Credits, a tax-exempt bond through MassDevelopment, and significant fundraising, perhaps a total of $3 million to $4 million. The goal is to move in by September 2019.

As for that trickle-down effect mentioned earlier, often there isn’t much of that phenomenon with moves such as this, only that musical-chairs outcome seen in this city and many others when new properties are constructed.

“Often, with relocations like this, you’re worried about the place left behind,” said Kevin Kennedy, Springfield’s chief Development officer, adding that this thought process went through his mind even on projects like the new federal courthouse on State Street, an initiative he led as an aide to U.S. Rep. Richard Neal. The new facility changed the landscape on State Street and greatly upgraded the facilities for the court — but it also left a huge vacancy at 1550 Main St.

That property rebounded nicely and is now home to a diverse group of new tenants, but such bouncebacks don’t always occur.

With Peter Pan relocating to Union Station, the bus station would be left behind, said Kennedy, adding that Way Finders’ relocation was both a quick and extremely positive reuse of a highly visible piece of property.

“To get a brand new building there with a significant number of employees was a good result,” he said in a voice that certainly conveyed understatement, adding that the second parcel to be left behind, 322 Main St., will likely have an equally positive outcome.

“With a family like Balise that has accumulated a significant amount of property in that area, I expect a that we’re going to see a significant development there that will be good for the city and good for the tax base,” he told BusinessWest.

Room for Improvement

All that certainly constitutes a win-win-win, with maybe a few more wins as well.

It started with a desire to be near the bus station and ended with a purchase of the bus station. That wasn’t the expected route, to borrow a phrase from the transportation business, but this relocation will help several parties get to their desired destinations.

“We could have gone outside the city; we could have done something in an industrial park,” said Gagliardi. “But that wouldn’t have been good for our clients or good for the city. The idea that someone that can hop on a bus in Chicopee, take it to Union Station, and walk across the street is a good thing.

“We’d like to be part of the good stuff that’s happening this city,” he went on, adding that this relocation, not to mention the agency’s many initiatives to improve quality of life for area residents, will certainly make that a reality.

George O’Brien can be reached at [email protected]

Commercial Real Estate Sections

Vehicle for Growth?

The Willys-Overland building on Chestnut Street

The Willys-Overland building on Chestnut Street has a proud past, and developers now believe it has an intriguing future as market-rate housing.

Chuck Irving says the property at 151 Chestnut St. in Springfield — known to the well-informed as the Willys-Overland Building because the long-defunct car maker had a showroom on its first floor and a 1,000-car garage above — caught his attention some time ago, after it was damaged and then abandoned after the natural-gas explosion in late 2012.

And he thought it had some potential.

But what really opened his eyes was the rebirth of an almost identical property in Detroit also built by Willys-Overland.

Irving recalled googling ‘Willys-Overland Lofts,’ the name of the housing complex the site was converted into (just as BusinessWest did, and you can) and seeing headlines about relatively small but well-appointed units selling for north of $500,000. And going fast.

“We started reading the articles about the same building in Detroit,” recalled Irving, a principal with Boston-based Davenport Properties. “We went online, looked at the pictures … and it was an incredibly attractive property. And so we started looking at this building, thinking, ‘if it’s structurally sound, this is a great opportunity, because it comes with parking.’”

Indeed, seeing what happened in Detroit and coupling that with what readily appears to be a growing need for market-rate housing as the countdown to MGM Springfield’s opening hits eight, maybe nine months, the Springfield property’s potential soared in Irving’s eyes.

Enough to make the 70,000-square-foot, four-story structure Davenport Property’s latest investment in the City of Homes and the region as a whole. Others include the Springfield Plaza, the Hadley Mall, and the Walmart in Westfield.

“Our company is involved with MGM,” said Irving, noting that the company considers itself MGM’s development partner in Springfield. “And we’ve been watching the employees of the company come into the area, especially the young ones, and looking at their perception of the inventory of available apartments. Through their eyes, it became really clear that there was a need for more market-rate housing in Springfield.”

Whether the Chestnut Street property in Springfield can follow the lead of its twin in Detroit is a huge question mark, one that will hopefully be answered by extensive cost-benefit analysis work in the weeks and months to come, or what Irving called “calibrating Springfield’s market rents with construction costs.”

But he believes the property is certainly a sound investment and that the building will play a key role in the revitalization of the city and especially the area that has come to be known colloquially as the ‘blast zone.’

Kevin Kennedy, Springfield’s chief Development officer, agreed. He said the Willys project, if it develops as Davenport believes it could, might become a catalyst for the blast zone, an area bordered, roughly, by Lyman Street to the north, Dwight Street to the west, Pearl and Hillman streets to the south, and Spring Street to the east.

“There are other investors looking into that area, which we’re calling the ‘next frontier’ in Springfield,” he told BusinessWest, adding that the conditions are favorable for more housing initiatives and related businesses in that zone.

These conditions include everything from MGM and other job-creating ventures in and around downtown to the revitalization of Union Station, just a block or so to the north of the Willys building, to an interest among Millennials and also some retiring Baby Boomers in what Kennedy called “urban living.”

“When you calculate all the jobs that are going to be happening in the downtown and the Springfield area in general, and also take into account the fact that urban living is making a comeback, as well as the growing entertainment options in that area … all these things make this project viable and add up to something good for Springfield,” he said.

A new life as housing would only be the latest chapter in the intriguing history of what has come to be known as the Willys-Overland Block Local Historic District, which was placed on the National Register of Historic Places in 1983.

Built in 1916 as an automobile sales, service, and garaging area, the property became part of what would later be described as an auto-industry legacy in Springfield. Indeed, the Duryea brothers created the first marketable auto in Springfield — there’s a statue depicting their creation near Stearns Square — and Rolls-Royce located a plant in the city to capitalize on its highly skilled workforce.

But Willys-Overland, like the others, did not enjoy a long history in the city. Indeed, it closed its property here in 1921 due to slumping sales, and it has seen a number of uses since.

It was a primarily a parking garage for some of the downtown hotels before they were converted into condominiums, said Irving, and after that, it served as home to a host of businesses, ranging from Square One to a construction company.

These operations were forced out by the gas explosion in late November 2012, he went on, adding that the building was completely gutted and has been vacant, with most of the windows covered with plywood, ever since.

willys-overland-building-union-sept-24-1916

Above, a news story announces the opening of the Willys-Overland building in 1916. At right, the Willys-Overland property in Detroit, which has been transformed into lofts selling for more than $500,000.

Below, a news story announces the opening of the Willys-Overland building in 1916. At right, the Willys-Overland property in Detroit, which has been transformed into lofts selling for more than $500,000.

The previous owner applied for a demolition permit in January 2015, but the city sought and won a delay of that move due to the property’s historic significance.

It was this delay that essentially gave the property a reprieve — time for more progress to take shape in Springfield, time for a recognized need for more market-rate housing to emerge, and, yes, time for the Willys-Overland Lofts project to catch fire — and catch Davenport’s attention.

As noted, the Springfield Willys-Overland property is an intriguing addition to an already large and diverse portfolio of properties in Western Mass.

Perhaps the most visible is the Springfield Plaza, which has undergone an extensive facelift and added new tenants ranging from a trampoline complex to a new home for Springfield’s Registry of Motor Vehicles office, which, said Irving, has brought a significant surge in traffic to the plaza.

The portfolio also includes a retail complex across the street from the Eastfield Mall and what’s known as Davenport Square in Springfield, at the corner of Union and Main streets across from MGM Springfield. The development will include MGM’s daycare facility as well as some retail.

As for the Willys-Overland building, the next steps in the process of writing the next chapter in its history are finalizing designs, crunching the numbers, as noted earlier, and requesting support for historic tax credits, said Irving, adding that redevelopment is dependent on such tax credits and other forms of assistance.

While the reuse plans are still in their infancy, Irving anticipates perhaps 60 units of relatively small size, with a portion of the building to be used for parking.

“It’s got great bones, and it’s absolutely perfect for apartments with the column spacing,” he noted. “What we’re trying to go after is small — really small units for young professionals who don’t want the price of having a big space.

“Our take on it is that it’s a great investment,” he went on. “We’re not certain that the market rents will support the construction costs, and we’re still verifying that. But in the long run, we think Springfield is on the upswing, so whether it’s this year or next year, we’re convinced that this will be a great residential investment.”

As for the blast zone, or Springfield’s ‘next frontier,’ as Kennedy called it, progress has come slow to that area, with the gas explosion now more than five years in the rear-view mirror.

This can be attributed to several factors, he went on, including the slow pace of insurance settlements on many of the properties in the zone (including the Willys-Overland building) and a desire among investors to see how and in what ways Springfield continued its revitalization.

But Kennedy believes the Willys-Overland project could trigger other developments in that area and other housing initiatives as well. And Irving agreed.

“The Springfield market, in our mind, is about to blossom,” he told BusinessWest. “And so, this is a good place to be on the ground level.

“This is a small project at 60 units,” he went on. “If this tests out and verifies that market rates can support new construction, then this will be a catalyst for that entire area.”

George O’Brien can be reached at [email protected]

Commercial Real Estate Sections

Progress in Site

An aerial shot of 70 Turnpike Industrial Park Road in Westfield.

An aerial shot of 70 Turnpike Industrial Park Road in Westfield.

Michael Grossman says his New York-based firm, HMC Real Estate Partners, looks at several hundred properties in the Northeast corridor over the course of a year — at least a few per week, by his estimate.

When asked what prompts he and partners Barry Lefkowitz and Brendan Kolnick to move beyond looking — or well beyond, as the case may be — and make an addition to their growing portfolio of properties, he said there are a number of factors that go into that equation.

These include everything from that time-honored first consideration in real estate — location, location, location — to the condition of the property, the condition of the local market, demand for the type of real estate in question, and a host of other variables.

And every one of those boxes could be checked when it came to a property now marketed as 70 Turnpike Industrial Road, known to most as the National Envelope site, because that was the tenant there for a number of years before it vacated the property in 2015.

“We saw great potential for value creation,” said Grossman. “The project represents an excellent opportunity to turn a non-performing property into a productive asset for the community as well as our investors.”

Elaborating on this potential, Grossman noted that the property is located roughly a mile from Mass Pike exit 3 (you can almost see the highway from the property), and also has rail accessibility. What’s more, it has size (238,575 square feet) and flexibility in that it is suited for both production and warehousing, and is in good condition, especially following more than $1 million in work to the roof, replacement mechanical systems, and more.

Add in a strong market for manufacturing and distribution space, fostered by dwindling inventory, and a city eager to replace the jobs lost when National Envelope left the city, and it’s easy to see why HMC pursued the property and thus greatly increased its presence in the region.

Indeed, this is the company’s second major acquisition in Western Mass. in 2017; the other was the fully leased, 187,840-square-foot warehouse building in the Agawam Regional Industrial Park, home to OMG and Vaupel.

Michael Grossman

Michael Grossman says acquisition of the Turnpike Industrial Park property represents an opportunity to turn a non-performing property into a real asset for the city and the region.

The company also owns a large industrial property in New Jersey, and the portfolio now boasts nearly 1 million square feet of industrial and distribution facilities.

Grossman joined fellow industry veterans Lefkowitz and Kolnick in creating HMC in 2016, with Grossman and Lefkowitz both having left Mack-Cali Realty Corp., a public, multi-billion-dollar real-estate investment trust, to start their own company.

HMC focuses primarily on acquiring multi-tenant industrial and office-flex properties, Grossman explained, adding that the company had developed a strong working relationship with many of the top real-estate-services firms, including Cushman & Wakefield, which put the Westfield property on HMC’s radar and is now its agent.

The company’s principals saw a property that needed some work — there was a considerable amount of deferred maintenance — but also great potential in what would be a new role, that of home to multiple tenants.

And Grossman, as he offered BusinessWest a tour and pointed out its open spaces, high ceilings (up to 36 feet in some portions of the facility), and 12,000 square feet of office space, envisioned up to four tenants.

“We’re looking at assembly, manufacturing, and straight distribution,” he explained. “The building lends itself to manufacturing because of the extensive power.”

The logo created to accompany marketing materials for the property does an effective job of highlighting some of its many assets, especially that strategic location part.

Indeed, curving their way around a large ‘70’ (the street address) are four lanes of highway and some railroad track. The roadway is the Turnpike, obviously, the west-bound lanes of which are less than 100 yards from the back of the property. The railroad track signifies the potential to create a spur that would connect the property to a rail line running through the north side of the city. National Envelope never used rail service, but the potential is certainly there for future tenants to do so, Grossman said.

Potential is a word you hear early and often in reference to this property, and Grossman and his partners are confident that it won’t be long before this potential is realized.

— George O’Brien