Day: November 22, 2011

Holyoke Project is a Study in Perseverance

Mike Crowley, left, and Bob Schwarz in front of the Holyoke Transportation Center, a unique project that overcame innumerable hurdles.

Mike Crowley says that from a strict bottom-line perspective, the initiative that became known as the Holyoke Transportation Center never really made complete sense, and always came complete with a large amount of risk.
Indeed, when asked when and if this unique commercial real estate venture will become a financial success, Crowley laughed and then offered an expression that seemed to say, ‘who knows?’ — a reaction that essentially told the story. Well, not really.
That’s because this project was never about economics — or all about economics, said Crowley, a commercial real estate consultant, developer, and eventual partner with members of the Picknelly family and a host of public entities in this initiative that transformed the old central fire station on Maple Street in Holyoke into a transportation and education complex that those involved say should become a model for other communities.
Instead, it was about fulfilling a commitment made by Peter L. Picknelly more than a decade ago to create a groundbreaking public-private partnership that would blueprint and then build a unique facility that would become both a transportation hub and center for adult basic education programs — two passions for Picknelly, who was still conceptualizing the facility when he died in 2004.
And it was essentially the unwavering desire on the part of his son, Peter A. Picknelly, to honor this commitment that enabled the project to overcome a lengthy laundry list of challenges and the temptation on the part of any or all of the various players — the Commonwealth, the Pioneer Valley Transit Authority, the Federal Transportation Administration, Holyoke Community College, and other entities — to say that this project just wasn’t doable.
“Every time we were faced with a 10-foot wall with barbed wire on top, we somehow found a way get over it,” said Crowley, who has a number of successful real estate ventures, including several medical offices, on his portfolio, and has worked with the Picknelly family on several of its projects over the years.
He said the barriers in Holyoke were both bureaucratic — an inevitable scenario when one considers the alphabet soup of federal, state, and local agencies involved (from HCC to the PVTA to the FTA), as well as the leadership changes that took place within some of these agencies— and construction logistics he summed up neatly and succinctly when he joked, “they told us this building had great bones; well … they lied.”

The Holyoke Transportation project was a complicated endeavor that involved a number of federal, state, and local agencies.

Route of the Problems
As Crowley retold the story of how the center eventually came to fruition, he said that by the time Picknelly called him in 2006 and asked him to get involved, the project had been effectively dormant for some time.
There had been a memorandum of understanding inked between the Picknelly family and the PVTA in 2003 that outlined the partnership and the main battle plan for building the center, said Crowley, and many additional partners, from HCC to Head Start, to the city of Holyoke (which provided the real estate), had come on board, and thanks to the ardent support of U.S. Rep. John Olver, the various components of the project, and needed funding sources, were coming together nicely.
“They visualized a multi-modal transportation facility that would link inter-city and intra-city bus services involving carriers like the PVTA and Peter Pan, that would provide superior transportations services for the people ot Holyoke and the surrounding communities,”Crowley explained. “But what they also recognized was an absence of critical adult basic education services in the community, and looking at the demographics, this was a glaring problem — the fact that none of these services were being provided in a cohesive fashion.”
“What Peter (Picknelly), Bob (Schwarz), and Congressman Olver realized was that many of the people who needed adult basic education needed transportation to those services,” he continued. “Further, they understood that many of them also had kids, and in most cases, couldn’t leave those children to receive these education services — so Head Start became another critical element in the equation.”
This apparently solid game plan gained the support of the FTA and the state Executive Office of Transportation), which together had committed grants covering two-thirds of the project’s cost, and HCC had agreed to become anchor tenant and provide the adult basic education services.
But due to a series of circumstances — from the death of the elder Picknelly, who was providing the private equity for the project ($1 million) to turmoil at the PVTA and a subsequent change in leadership at the agency — the ambitious plans had been effectively back-burnered, although certainly not forgotten, said Crowley.
Indeed, by 2006, the PVTA, then being led by Mary MacInnes and determined to upgrade its facilities in Holyoke, one of the larger communities served by the agency, generated some dialogue about getting the initiative back on track.
But the landscape had changed considerably since 2003, said Crowley, noting that by then, the commercial real estate market was booming and construction costs were soaring, which meant that that the agreements between the parties would have to be renegotiated.
“When I looked at the development proposal that Peter had agreed to, and looked at the agreements that Head Start and Holyoke Community College had agreed to as tenants, and looked at the agreement that the PVTA had, it was evident to me that the project was financially unfeasible, and I indicated that (to the younger) Peter,” he explained. “But Peter, who recognized and appreciated that this was one of his father’s principle goals in life — to create this adult basic education center — didn’t want to give it up.”
Fast-forwarding a little, Crowley said the various agreements with the parties involved were revisited, and those leading the initiative went to Olver in the hopes of securing additional funding from the FTA to cover those escalating costs; a revised budget from the architect had moved the pricetag from the $7.5 million in 2003 to roughly $9.3 million (for both the building and an adjoining parking garage that was never built).
However, by this time (late 2006), the country was starting to slide into recession, and the federal government was putting the brakes on a number of projects, including many that were transportation related. So the parties involved with the Holyoke project agreed to essentially move forward knowing that there was a significant funding gap, said Crowley, adding that this was only one many serious problems lying in wait for this initiative.
“There were a number of points in the JDA where I think all the stakeholders, at one point or another, and for various reasons, almost threw in the towel,” he explained. “It was a daunting, daunting process. There was a ton of agencies involved — at the federal level, the state level, the city level … it was incredibly complex.”

Miles to Go …
Meanwhile, close inspections of the old central fire station revealed that those claims of ‘great bones,’ were untrue, or at least greatly exaggerated, and this meant that the recently revised budget was certainly imperiled.
For starters, the building, vacated at the start of the decade but still used for some training programs, had been exposed to the elements for seven years before construction was due to begin. This led the developers to do their own structural and environmental analyses — earlier reports indicated that the building was ‘clean’ — that found a number of large and costly problems.
Chief among them was the asbestos-based coating on the floors on the second, third, and fourth levels, a material applied 70 years earlier. “Everyone thought it was concrete, and we planned to just skim-coat over it,” Crowley explained. “And there was no way to get it up, other than with jackhammers and hand demolition.
“We had two options — encapsulating it, or removing it,” he continued. “But knowing that we were going to have Head Start and their children, and knowing the level of traffic this building was going to get from the general public, we made the decision to remediate it in its entirety, and if we couldn’t remediate it, we were going to scrap the plan.”
A subsequent inspection revealed that the deterioration of the I-beams that were carrying the first floor was so significant that they would have to be replaced, adding another $250,000 to the project’s cost.
“So now, we’re $770,000 behind the 8-ball, and this is before we’ve gone to bid to find out what it’s going to cost us to do the building,” he went on. “So that delayed us probably four months, because we, as the private-equity investors said, ‘we’re not going forward this — this is crazy; there are just too many unknowns.’”
But eventually, the many delays in negotiating agreements, securing the needed funds, inspecting the building, and resolving construction issues, turned out to be a blessing, because the rapidly deteriorating economy served to bring down the constructions costs associated with the project — and in a dramatic fashion.
“In most cases, time is you enemy with projects like this; in this instance, it was our friend,” said Schwarz, adding quickly that even with the attractive bids that would eventually be recived, the project would likely have been scuttled if state legislators had not secured a $750,000 grant from the EOT to handle the asbestos-removal efforts and floor replacement.
Construction wound up coming in two phases — demolition, handled by Kurtz Inc., in Southampton, and then reconstruction, undertaken by Western Builders in Granby, a subsidiary of Daniel O’Connell’s Sons in Holyoke — and there were myriad challenges in both cases.
Indeed, demolition of the floors proved to be a formidable obstacle, said Crowley, noting that due the composition of the concrete under the asbestos coating (sand mixed with large stones), the demolition efforts left a scarred, pitted surface that “looked like the surface of the moon.”
Rectifying the situation would require roughly three inches of new concrete, he continued, but the structural steel wouldn’t support that much weight. So a silicon-based substance, five times more expensive than concrete, had to be used.
Eventually, officials at HCC were able to secure a $550,000 federal grant that effectively enabled the developers to absorb ballooning expenses from the construction challenges and bring the project to completion, said Crowley, who stressed repeatedly, that there many figurative 10-foot walls with barbed wire that appeared to be insurmountable barriers, but solutions were ultimately found.
As they provided BusinessWest with a tour of the center, Crowley, Schwarz, and George Kohout, who directs the System for Adult Basic Education Support (SABES) for Holyoke Community College, at the Picknelly Center, all implied on numerous occasions that the facility was certainly worth all the aggravation, and that the unique model is working as those who blueprinted it intended.
Kohout said there are a number of programs conducted on the third and fourth floors of the facility, involving a number of agencies, from HCC to the New England Farmworkers Council; from the HALO (Holyoke Adult Learning Opportunities) Center to the Community Education Project; from the Holyoke Public Schools to CareerPoint.
Together, these partners offer services that include English as a Second language classes, GED testing, MCAS preparation, career counseling, “fast-track math,” English writing and composition, and computer training.
The central location, coupled with the accompanying transportation and childcare elements, not to mention the modern facilities, have all contributed to high enrollment and attendance levels that are certainly not coincidences, Kohout continued.
“Attendance has gone off the charts,” he explained. “And part of the reason for that is that many of these programs have been offered in places like the basements of churches or in other buildings with used furniture; when people come here and see the modern facilities, the state-of-art technology, bright colors, and the clean walls, it really ramps up what we call their ‘persistence’ in classes.”
In the big-picture perspective, that’s a word that can be applied to every aspect of this project.

Passing the Test
Looking back on all that transpired since that conversation with Peter Picknelly back in 2006, Crowley shook his head and said, “had I known then, what I know now …”
He didn’t finish the sentence, but the implication was certainly clear enough, and if it wasn’t, he then made it so by adding, “was this a labor of love? Maybe, but mostly, it was a just a labor.”
And mostly because all the parties involved didn’t know then what they know now, this unique project was able to come to fruition, bringing transportation, adult basic education, childcare, and even a coffee shop, together in an historical and improbable setting.
And so, the Holyoke project has become a study in perseverance — in more ways than one.

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