Day: January 20, 2022

Towering Achievements

Dinesh Patel and Vid Mitta Are Reimagining a Springfield Landmark

In 1996, BusinessWest introduced a new recognition program, one that pays homage to the entrepreneurial spirit that has long defined this region. Since then, the Top Entrepreneur honor has gone to small-business owners, college and hospital presidents, and even Holyoke’s municipal utility. This year’s recipients are Dinesh Patel and Vid Mitta, true serial entrepreneurs who rolled the dice and purchased Tower Square, the iconic but troubled Springfield landmark, in 2018. Their efforts to change the landscape and reimagine the property have been slowed by COVID, and there are many chapters in this story still left to write. But there are signs of progress, and the partners’ patience, persistence, and entrepreneurial mettle are big reasons why.

Demetrios Panteleakis recalls his company being one of many commercial real-estate brokerage firms that were interviewed to represent the new ownership group at Tower Square as leasing agent.

He also recalls being rather surprised when the Macmillan Group won the contract. That’s because … well, he was rather candid in his assessment of what needed to be done with the downtown Springfield landmark.

Probably too candid, in his mind.

“I think I was pretty brutal when it comes to what needed to change and what types of investments needed to be made in the building,” he said, looking back more than three years. “I sent it to them kind of thinking, ‘they’re going to look at this and probably say, ‘forget this guy — there’s no way we’re doing all this.’

“But to my surprise, and to my surprise ever since, it’s been the complete opposite,” he went on. “They wanted to meet with me again, and they wanted me to go into detail on a marketing plan, they wanted me to go into detail on the improvements … the concept of doing away with traditional retail and doing more of a community-based approach for the tenants of the building and focusing on just the constant improvement of the building.”

Panteleakis said that this response to his “brutal assessment,” and the actions taken since, go a long way toward explaining why partners Vid Mitta and Dinesh Patel have been named BusinessWest’s Top Entrepreneurs for 2022, the latest winners of an award first handed out in 1996.

Actually, this is the second time they’ve won the award — sort of. Indeed, they were, and still are, part of the ownership and management team of the Springfield Thunderbirds that took home the Top Entrepreneur award for 2017 for their efforts to not only bring hockey back to the city but make it a force in efforts to reinvigorate the downtown.

The two were already serial entrepreneurs at the time MassMutual was looking to sell the Tower Square complex in 2017, owning everything from hotels to fast-food restaurants; from an information-technology-solutions company to early-education facilities. But this was their first real joint venture and certainly their first class-A office tower, and Panteleakis said they entered this exercise with what he called a “thirst for learning.”

Demetrios Panteleakis stands in the space in Tower Square now occupied by Country Bank, one of many new tenants to arrive since Vid Mitta and Dinesh Patel acquired the downtown Springfield landmark.

“And that’s unusual,” he went on. “Most people who own buildings always think they know more than the broker; it’s rare for them to listen. I was shocked when they started instituting the plan, and they really stuck to it.”

While listening has been a major ingredient in their success at Tower Square — and in business in general — there are many others, the partners told BusinessWest, including patience, especially amid COVID-19, which has certainly slowed the pace of progress. But also watching and learning what has worked elsewhere (we’ll see some examples of that) and applying it to their venture.

Persistence and adherence to the plan are also keys, they said.

“We just keep moving and keep achieving one target at a time,” said Mitta in describing the overall strategy for the property. “Right now, we’re at 70% occupancy, compared to roughly 40% when we took over the building. So we still have another 30% to go, so we’re not there yet, and we work on a day-to-day basis based on the leads that we get. We’ve come this far, and we hope to go all the way to the finish line, to 100%.”

Patel concurred, noting that, while nothing has really been easy with this venture — undertaken mostly during the two years of COVID and made much expensive and complicated because of it (more on that later) — there are encouraging signs. Overall, the project has been a learning experience and has emboldened the partners in many ways.

“I think I was pretty brutal when it comes to what needed to change and what types of investments needed to be made in the building. I sent it to them kind of thinking, ‘they’re going to look at this and probably say, ‘forget this guy — there’s no way we’re doing all this.”

“This project has given us a lot of confidence,” he said. “If there’s a space, and the structure is good, like we have here, we know we can create something in our mind and move forward.”

Tim Sheehan, Springfield’s chief Development officer, lauded the work at Tower Square, saying that, in many respects, the partners’ efforts mirror the original mission of the property and take it a new and higher level at a different point in the city’s history.

“This is a critically important project for Springfield,” he said. “The whole impetus behind the building itself was to enliven the commercial business district of the downtown, and to enliven it by bringing businesses to the heart of the city, workers to the heart of the city, visitors, and supportive retail, and clearly the building has done that.

“When you look back at how this was conceived in the 1960s as part of a large urban-renewal effort, the contemplation of this building really started with a small group of civic and downtown business leaders, and ultimately it was advanced by MassMutual,” Sheehan continued. “So I guess you could say Tower Square continues to attract entrepreneurial investors to the property. And while the vision that those initial investors had was clearly bold, Dinesh and Vid’s vision to reposition the property is as bold, if not bolder.”

Background — Check

A quick look at the partners’ résumés and portfolios of business interests reveals why the phrase ‘serial entrepreneur’ applies to both.

A pharmacist by trade, Patel has become a prolific business owner and developer. His portfolio now includes several 99 Restaurant & Pub locations, including one in Greenfield; a Walgreens in Worcester; a CVS in Bridgewater, Conn.; three McDonald’s franchises, including one in Holyoke; several Hampden Inn & Suites locations across New England; a few adult day-care facilities; and even a self-storage operation.

As for Mitta, he started as a software programmer and has, over the past three decades or so, put together a broad and diverse portfolio of business interests known collectively as Mitta’s Group. Like Patel, he has properties in the hospitality realm, including several hotels within the Marriott, Hyatt, Choice, and Wyndham franchises, but also owns several early-education facilities operating under the name the Learning Experience, as well as Synergic Solutions, which provides information-technology solutions to businesses around the globe.

The new façade on the hotel at Tower Square is symbolic of the changes that have taken place at the property.

And they continue to invest in new ventures, including development of a 14-acre parcel in Windsor, Conn. into a mixed-use complex that will include a hotel, apartments, a gas station, a car wash, and other components. Work on the project, to be called Windsor Crossing, is set to commence next spring.

The top line on each résumé now, though, is Tower Square, and how these two came together to purchase the 50-year-old landmark is an intriguing story, which they summed up as a calculated risk well worth taking.

The two certainly knew each other well — as noted, they both had ownership stakes in the Thunderbirds, and Patel had sold some properties to Mitta — but they had never launched a joint venture together … until Tower Square came on the market in late 2017.

“Most people who own buildings always think they know more than the broker; it’s rare for them to listen.”

“When I came across this particular listing from MassMutual, I approached Dinesh and asked him what his thoughts were,” Mitta said. “He said that if I was interested, he was willing to partner, and that got the ball rolling.”

Patel recalls them having a lengthy discussion concerning the property — which came in two parts, the hotel and the retail/office complex adjoining it — on opening night of the Thunderbirds’ 2017-18 season, which came only a day before the deadline for submitting bids for the Tower Square property.

This is actually the second time Vid Mitta and Dinesh Patel have been on the cover of BusinessWest’s Top Entrepreneur issue. They’re part of the ownership and management group of the Springfield Thunderbirds that took home the honor in 2017.

“Between 4 and 5 o’clock, I was in Northampton on a bike ride, and I thought to myself, ‘I want to pull the trigger on this,’” he went on, adding that a bid was submitted mere minutes before the 5 p.m. deadline.

Bidding on Tower Square was certainly not a slam-dunk proposition at the time; in fact, it was far from it. While the building, which changed the downtown Springfield skyline in dramatic fashion when it opened in the late ’60s, had some core tenants in its retail space — UMass Amherst, Cambridge College, and a CVS, among others — and several more in its office tower, the complex had certainly seen better days.

MassMutual was soon to be vacating several floors in the office tower, many spaces in the retail portion of the building were vacant or underutilized, and the hotel on the property had lost the Marriott flag that had flown over it for decades and was now known as the Tower Square Hotel.

But while others were looking at a glass half-empty — or far worse — the two partners saw potential, and something else as well: an important property in a city that they had invested in and become part of.

“My wife and I were having lunch together and started talking about Tower Square,” Patel recalled. “She described it as an ‘iconic building’ in Springfield and a ‘once-in-a-lifetime opportunity.’ She said, ‘we need to figure out how to get this building.’”

Mitta recalls having similar thoughts, and noted that, while their initial interest was focused on the hotel, which they successfully bid on first, they eventually pursued the rest of the property as well, paying $17.5 million for both halves of the operation.

And they did so understanding that there would be much larger investments to come.

“We knew what we were getting into,” said Mitta, acknowledging that this comment covers considerable ground, meaning acknowledgement that large amounts of work needed to be done not only to get the Marriott flag back on the hotel, but to renovate the parking garage; repair and upgrade aging equipment, including the elevators; and undertake other improvements to bring new tenants, and new vibrancy, to the property.

Building Momentum

Elaborating, the two partners said they entered this joint venture with a plan of sorts, one that would take shape over the coming months and years.

That plan called for focusing less on traditional retail and more on creating something approaching a community, with pieces that would complement one another, said Patel, adding that, even before he and Mitta had finalized their commitment to bid on the property, he was talking with Dexter Johnson, president and CEO of the YMCA of Greater Springfield, about moving parts of that operation, specifically the fitness center and childcare facilities, to Tower Square.

“This project has given us a lot of confidence. If there’s a space, and the structure is good, like we have here, we know we can create something in our mind and move forward.”

Those operations would eventually become part of a larger plan that called for attracting businesses that would bring convenience, as well as needed products and services, to those working in the tower, but also the students attending classes there and those living in and around downtown, said the partners, adding that other components have come to include White Lion Brewing Co., a spa (SkinCatering), and even the wine exchange that recently opened in the space next to the Hot Table restaurant.

“We never thought that this would come back as a retail building,” Mitta said. “But when we purchased the property, we knew that MassMutual had already put UMass and Cambridge College into the retail mall, and that gave us a good start toward bringing more semi-retail businesses into the mall, so it would be a win-win situation for all of us.”

Patel concurred, noting how he and Mitta have seen the ‘education hub’ concept work in Worcester, and they believe it can work in Springfield as well.

In the office tower, said Panteleakis, the goal has been to take advantage of the attractive class-A space, including the floors vacated by MassMutual, as well as other amenities, such as on-site parking, those aforementioned service businesses, and a safer, more vibrant downtown to bring some of the businesses that had left Springfield back to its central business district while also bringing some new names to that area.

And that has happened with the addition of Wellfleet, which now has its name and logo on the building, as well as Farm Credit Financial Partners, the Hampden County District Attorney’s Office, Country Bank, several state offices, and many other new tenants.

“We’ve replaced 150,000 square feet vacated by MassMutual with 140,000 square feet of new tenants,” Panteleakis said, adding that there is one more full floor to fill and several “smaller pockets” that remain vacant.

The partners said that, while there is certainly a plan in place, the simple objective moving forward is to continue adding complementary pieces and creating a destination — something Tower Square was decades ago but hasn’t been for some time.

“If you look at the building today, it efficiently serves the needs of modern office tenants, and that’s been though significant upgrades to that space,” Sheehan said. “The investment of more than $20 million in completely refurbishing the hotel and restoring the Marriott flag will attract new and more visitors to downtown and enhance the city’s attractiveness as a meeting and convention destination. Additionally, they’ve created a sense of excitement — I don’t think you can use any other word — about what the building’s public space could actually be.”

While progress has been made on many different levels at the Tower Square property, the pandemic has certainly slowed its pace, due to everything from the soaring cost of materials to labor shortages, said the partners, adding that it has also made improvements and enhancements more expensive — and far more expensive, in many cases.

That’s especially true with the ongoing work at the hotel, where supply-chain issues have made it difficult to obtain needed materials in a timely fashion. Overall, the project, with a price tag that has risen past $30 million, is well behind the original schedule, which had the hotel reopening last year, but the partners are confident that the facility will be welcoming guests by the end of the second quarter of this year.

“COVID has hurt us because the cost of construction has shot up, and the cost of raw materials has shot up as well,” Mitta said. “Every time we import things from China or some other country, the container fees alone are almost four to five times what they used to be two or three years back. We don’t want to stop, so we had to pay these higher prices and keep going.”

As just one example, Patel noted that steel prices have risen 48% this year, an increase that could not have been foreseen when they bought the property.

“Increases of 10% or so, you anticipate that; you can factor that in,” he noted. “But 48% to 50%, you can’t plan for that. It’s all about supply and demand.”

Despite the skyrocketing cost of the project, the partners remain optimistic about the hotel and its prospects for the future. They said COVID will eventually relent, and when it does, people — if not businesses — will be ready and willing to travel again.

“People are coming back,” Mitta said. “They’re traveling, they’re using hotels, and the travel industry is coming back — especially when it’s not related to business travel.”

COVID has also brought a halt to any plans to develop the parcel across Main Street from Tower Square, known to many as the ‘Steiger’s lot’ because that’s where the department store once stood.

The rooftop area at Tower Square is one of many that have a new look.

Original plans called for building a Hyatt on that property, but the pandemic and its deep impact on travel of all kinds put that initiative on ice, said Patel, adding that their plans will be revisited once the Marriott opens.

Meanwhile, they’re advancing plans for Windsor Crossing and continually looking for new entrepreneurial opportunities. That thirst for new opportunities brought them to Tower Square in the first place, and it has seen them through this challenging but ultimately fulfilling time.

“It’s been exciting,” Mitta said. “Every day is a new adventure.”

Landmark Decision

Flashing back to when the partners acquired the Tower Square property, Mitta noted that they had both a plan as well as a backup plan, one that called for converting the office tower into residential space if the office market didn’t develop as anticipated.

That backup plan wasn’t needed, obviously, although there have been some struggles, and COVID certainly has brought many unanticipated challenges.

Instead, the partners are moving forward, as Mitta noted, achieving one target at a time. The larger goal is not to turn back the clock and make Tower Square exactly what it was decades ago, but turn it back to the extent that the landmark is a destination and center of vibrancy.

There is still work to do, but if Mitta and Patel have proven anything, it’s that they are persistent and determined to make the plan they put on the drawing board more than four years ago a reality.

They’ve also shown that they’re quite worthy of BusinessWest’s Top Entrepreneur honor.

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