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DevelopSpringfield Targets ‘Impactful’ Projects
Above, the Gunn Block on State Street; below, 83 Maple, also known as the Ansel Phelps House, after the city’s fourth mayor, who lived there.
“Typically, you undertake your feasibility analysis and make sure the market’s there,” he said, adding that most developers will take a cautious, conservative approach to such work, especially in difficult financial times such as those experienced over the past several years. “Then, you go through your financial analysis, you line up your financing, get tenants or an end user in place, and then you start work.”
But when it comes to projects currently being undertaken by DevelopSpringfield — the private, nonprofit agency tasked with spurring development in the City of Homes, which Minkarah took over roughly 16 months ago — most, if not all, of those steps have been skipped.
This is especially true for initiatives involving two historic properties just outside the central business district — the Gunn Block on State Street, said to be one of the oldest commercial properties in the city, and a once-stately former residence known simply as 83 Maple — and there is a reason for this.
Actually, there are several.
For starters, these are properties deserving of the descriptive adjective ‘blighted.’ Both have been condemned, and, in the case of the Gunn Block, the large red ‘X’ above the door — placed there to warn firefighters that in the event of fire they are not to enter the building — is clearly visible. And bringing new life to blighted properties is one of the main tenets of DevelopSpringfield’s mission.
Jay Minkarah says the current projects in the DevelopSpringfield portfolio don’t make sense financially, but they do from the standpoint of the agency’s mission.
These properties are, in many ways, symbolic, said Minkarah, adding that they have been vacant and underutilized for many years and thus have become signs of a city that is stagnant and in decline.
So, considering all of the above, Minkarah decided — and rather quickly after assuming directorship of the agency in December 2012 — to essentially bypass those due-diligence exercises listed above and acquire the properties. They are both undergoing extensive renovations with the goal of having them retenanted in the next few years.
“We skipped a few steps and went right to implementation,” he told BusinessWest. “And that’s important for a variety of reasons. I think it’s important to demonstrate that progress is possible, that we really can make great things happen, that we can actually change things on the ground.
“The projects that we have chosen have been designed to have maximum impact,” he went on, adding that another initiative — acquisition of the former River Inn further east on State Street, subsequent demolition of that property, and preparation of the site for resale — also fits this description. “And we believe that successfully developing these will create some real momentum in the city.”
Minkarah used that word ‘we’ repeatedly as he talked about these projects, and he used it to reference not only his agency, but the many constituencies it works with, from Springfield city officials to other development-focused organizations.
For this issue and its focus on commercial real estate, BusinessWest talked at length with Minkarah about the current roster of projects in the DevelopSpringfield portfolio, why they were chosen, and what they mean for the city moving forward.
A Developing Story
Minkarah told BusinessWest that he not only works downtown but lives there as well, and frequently walks the area.
He has a number of preferred routes, including a trek up State Street into Mason Square; another that covers a wide swath of Main Street, essentially from the South End past the Arch; a walk that covers the full length of Union Street; and still another that takes him along Maple Street and often to the Springfield Cemetery.
It was while taking some of these walks — and also many drives throughout the city —that Minkarah identified some potential priority initiatives for DevelopSpringfield, including those that are currently in progress.
“I made it a point to drive around the city and walk around the city and try to understand the dynamic of what was happening,” he explained. “I was looking at it strategically and saying, ‘if we were to intervene, where would it make the most sense to do so? Where could we, while staying within our means, have a maximum impact?’ And these buildings popped out right away.
“We have properties in this city that are very distressed,” he went on, “but because of their location, while they may have value to some people, an intervention on those buildings wouldn’t be strategic.”
He chose that word ‘intervene’ carefully, and summoned it to show how the agency has chosen to inject itself into situations where solutions are both necessary and elusive.
That was certainly the case at the River Inn, acquired at auction roughly a year ago, which had become not only an eyesore, but a frequent crime scene.
“This was a real source of problems for the city and the neighborhood,” said Minkarah, adding that the 1.5-acre property, enlarged through the acquisition of some adjacent parcels, is currently being readied for redevelopment and is officially on the market.
“We’ve had a few nibbles,” he went on, adding that retail is the likely eventual use, and if a deal comes together, it could help spur additional development in an area he believes should capture the attention of national chains, but historically hasn’t.
“State Street is a corridor with tremendous potential,” he said, “and part of what we’re trying to do is get that message out. A lot of things have happened that are really significant, but it can be a challenge to get national chains to recognize the value of that corridor and what a tremendous investment and development opportunity it is.”
“Part of the reason why we’re making these very strategic investments is to enhance the development potential of that corridor,” he went on. “Taking down a building like the River Inn, which was a blight in that area, is one step toward doing that.”
The River Inn site is just a few hundred yards east of the Gunn Block, another property that seemingly begged for intervention.
This landmark predates the Civil War, said Minkarah, adding that its historical significance — it’s on the National Register of Historic Places — coupled with its location and blighted condition made it a prime candidate for the agency’s attention.
“To me, having a condemned building of obvious historical significance, located on State Street at a major intersection, directly across from STCC and the Tech Park … that’s just not OK,” he said. “That’s a condition that has to change. Like the River Inn, the Gunn Block is a property that had deteriorated and was acting as a blight on the area, inhibiting future investment and development.”
Building Momentum
Acquired for $90,000, the property is part of a row of buildings between Commerce High School that are vacant or underutilized — the long-closed Cavanaugh Furniture building is part of the mix — and that Minkarah believes have great potential.
“When I look down that block, I realize that we have this whole row of historically significant buildings that, if they were revitalized, if they were rehabbed, could become a small but interesting and vibrant district that serves the college, serves the neighborhood, and serves the people who work in the area,” he told BusinessWest.
Many of the properties in that row present challenges, and the Gunn Block is clearly the most challenged, said Minkarah, adding that asbestos was found on the walls of the second and third floors, and the process of abating it is slowing the extensive process of stabilizing and then rehabbing the property.
The agency was able to secure a $200,000 brownfields grant from the Environmental Protection Agency through the Pioneer Valley Planning Commission, he noted, adding that it will pursue historical tax credits and grants to help finance what will likely be a $1.5 million project to ready the property for tenants.
A restaurant/pub is the most likely next use for the first floor, while residential development is eyed for the upper floors, said Minkarah, adding that a re-use plan will be created for not only the rest of that aforementioned area, but also a planned grocery store across Walnut Street and the surrounding blocks.
Meanwhile, work continues at 83 Maple, which was built in 1841 by Solymon Merrick, inventor of the monkey wrench (one of Springfield’s many firsts) and later bought by Ansel Phelps Jr., Springfield’s fourth mayor.
It has been vacant for several years and was also condemned by the city, said Minkarah, adding that there were two previous, and unsuccessful, attempts to redevelop the 4,500-square-foot brick structure.
This poor track record, coupled with the building’s location and its deteriorated state, made it another target for intervention by DevelopSpringfield, he noted, adding that, while the development community has essentially given up on the property, he sees vast potential.
“The house has a lot of attributes that I really like — it has floor plans that lend it to office use, and, on the whole, it’s structurally sound,” adding quickly that water that poured through two skylights damaged by the 2011 tornado caused significant, but not irreparable, damage.
Crews are currently restoring the large porches on the property and repointing the brick, said Minkarah, adding that the exterior work should be completed this summer, and the focus will then shift to the interior and readying the property for professionals, such as lawyers or accountants.
The price tag will likely reach $750,000, he went on, adding that he’ll try to mitigate that cost with historic tax credits and grants.
Impact Statement
As he talked about his agency’s current projects, Minkarah made early and frequent use of the phrase ‘if all goes well.’
It was summoned to qualify everything from the timelines for rehabilitation of the properties to the ongoing search for funding, to the intended future uses of these landmarks.
There are question marks in each realm, and therefore some uncertainty about whether all will go well. But Minkarah is sure that nothing would ever happen at these properties were it up to the private development community, because the bottom line is that these projects don’t make financial sense.
But they do make sense when it comes to this agency’s mission and its desire to undertake initiatives that will be, in a word, impactful for the neighborhoods that surround them.
“If these were properties that were attractive to private developers, they would be developed. But they’re not, and those are the conditions we have to change,” he said. “We haven’t accomplished anything yet, but with these projects, I believe there is a greater sense of hope, a greater sense of what the possibilities really are, a new appreciation of how far we can really take this community.”
George O’Brien can be reached at [email protected]
The Experiments Continue in John Aubin’s Evolving Open Square
As John Aubin talked about Open Square, the massive former mill complex along the canals in downtown Holyoke that has been his passion for the past dozen years or more, he continually referred to it as an “urban laboratory” — for architecture, planning, sustainability, and economic development.
By that, he meant this was a place to experiment and drive innovation in response to an ongoing movement that has more people apparently willing and able to work, live, and locate businesses in urban settings, although many cities are struggling to take full advantage of that phenomenon.
To succeed in this environment and move the needle in Holyoke when it comes to attracting businesses there, Aubin said he doesn’t focus on filling square footage in an old mill. Rather, he’s committed to creating workspaces in which business owners can thrive.
“My business is really about creating an environment for people to live in, work in, socialize in, and play in,” he explained. “The real-estate development is almost secondary; as an architect, designer, and planner, that’s what I’m really doing — creating that environment.”
Aubin believes this philosophy is working and creating great progress in his laboratory. Over the past decade, he told BusinessWest, he’s been adding five new businesses a year, and all of these ventures are new to downtown Holyoke.
The tenant list now includes more than 50 companies employing more than 200 people in sectors ranging from healthcare to technology; from insurance to marketing; from finance to hospitality.
John Aubin, owner of Open Square
VertitechIT, a networking and IT engineering company that provides a wide range of services to clients, many of the them in the healthcare sector, is planning to move into 3,500 square feet of custom-designed space on the mostly undeveloped third floor of what’s known as Mill 4. And it could expand into more than 9,000 square feet across the hall if the firm successfully consolidates currently outsourced services on that site, as planned, said the company’s president, Michael Feld.
“We’ll need that space for a 24/7/365 support center with probably 25 to 30 people in it,” Feld said, adding that, even if those plans do not come to fruition, the company will likely continue its pattern of doubling in size each year and will certainly need additional space.
VertitechIT’s new offices, which should be ready for occupancy next month, are an example of Aubin’s efforts to create an attractive, efficient, custom (that’s a word you’ll read again) work environment that makes Open Square — and Holyoke — an attractive destination for businesses across many sectors.
“We wanted a space that is quite presentable to clients, but the real value is to the engineers,” Feld explained. “For example, everybody loves whiteboards, so all the walls are curved, with large expanses of painted whiteboard so you can write on it. And our conference-room table is glass that you can write on as well.
“There are a lot of large screens in various places, and the desks are designed so that people can collaborate on projects,” he went on. “The whole site is a visual interpretation of the way we work.”
Looking forward, Aubin said he plans to continue his pattern of steady growth. What direction it will take is still to be determined as Holyoke continues its comeback from the extreme hard times of the ’70s and ’80s, fueled by the loss of thousands of manufacturing jobs and demographic shifts that saw the nation’s first planned industrial city become one of the poorer communities in the Commonwealth.
Recent developments such as the Massachusetts Green High Performance Computing Center, the emergence of a creative economy, and a more positive outlook about the community could attract many different kinds of businesses to the city — and Open Square, said Aubin. Meanwhile, plans to bring rail service to Holyoke could open other kinds of doors, he said, adding that there is preliminary talk about the prospects for developing a hotel at one of the mills on the Open Square complex (more on that later).
For this issue and its focus on commercial real estate, BusinessWest toured Open Square, gaining a perspective on both the many new developments there in recent years and possible future development on this historic site.
History Lessons
As he elaborated on that notion of Open Square as a laboratory, Aubin referenced that trend toward urban living and working. He said Holyoke is squarely in the middle of this phenomenon, and perhaps better positioned than others to take full advantage of it.
“We all know that, over the past 10 years, the world has become more urban. Demand is growing for urban space,” he explained. “Holyoke, and many small cities in this country, have enormous potential — they represent a tremendous, untapped market. And what I do is take a design-based approach to taking advantage of that, to leveraging what is really a very strong market.
“There are a number of cities that are well-poised to take advantage of this market,” he went on, “but no one seems to be able to figure out how to do that — we’re seeing cities struggle with it. I actually consider Open Square to be a prime example of how to leverage that market.”
Setting the tone in this new and emerging urban landscape has been Aubin’s unofficial job description since he started filling in the canvas that is the historic mill complex his father purchased in the mid-’60s but then struggled to fill as Holyoke went into its long and pronounced tailspin.
The Great Recession that officially began in late 2007 and continued into late 2009 slowed his progress somewhat, but Aubin has been able to successfully fill nearly 100,000 square feet of space with everything from a successful events facility called Mill 1 (that’s where it’s located) to arts groups such as the Massachusetts Academy of Ballet, to energy and environmental companies such as Sovereign Consulting.
As he’s filled in floors on Mill 1 and Mill 4, he’s done so with the approach that, while he’s willing to experiment in his laboratory, there are limits on what he’ll try.
“As a private business, I don’t have the luxury of experimenting on things that are not going to work or where the costs are too high — I’ve been to able to identify markets and capture them, and ideas that don’t work were discarded quickly,” he said, adding that this reasoning explains why there is only one residential unit in the complex — one that Aubin lived in himself for a time and then Holyoke Mayor Alex Morse called home for a while before buying a house in the city — and also why there is a comparatively small number of artisans, specifically those who do what they do for a living, not a hobby.
“Housing is a good idea, a core idea, but you can’t do it in a vacuum,” he said, adding that conditions are not right for market-rate housing in Holyoke at the moment, primarily because two low-income projects in progress or on the drawing board — Lyman Terrace and the former Holyoke Catholic High School — will weaken demand for a higher-end product. “Market-rate housing is a long-term investment, and we hope to revisit it soon, but for now, it’s been tabled.”
So Aubin continues to focus his experiments on what he believes — or knows — will work, and this brings him back to that notion of creating attractive but also affordable environments in which to do business, but also in which to stage weddings and other types of events. And Open Square, with its great critical mass, provides seemingly endless opportunities for doing so.
“Because we have this great foundation, this wonderful building to work with, we’re able to do beautiful, custom-designed space at a very affordable rate that’s difficult to match,” he said while making a clear distinction between affordable and ‘cheap,’ something Open Square is not.
These ingredients allowed Aubin to successfully fill Mill 4’s second floor with what he called “studio space,” generally one large, open room with build-out costs much lower than what was created two floors up.
There, Aubin has created larger, custom spaces, up to 3,000 square feet, for an eclectic mix of clients, ranging from Common Capital to Cover Technologies, an environmental company, to Emergent Billing, which focuses on the healthcare industry.
Plans to create still-larger custom spaces on the third floor, which started with buildout for Sovereign Consulting, were sidetracked by the recession, said Aubin, but with the economy improving, those plans are now moving forward, starting with VertitechIT.
This artist’s rendering shows the unique features in the space created for VertitechIT, including curved walls and a centrally located conference room.
Technically Speaking
In many ways, that company’s arrival provides an effective example of how Open Square is deepening its tenant list by creating custom work spaces that put Holyoke — and the mill complex — on radar screens they would not have been on years ago.
Launched in 2001, the company was located in Northampton for many years, where the fit wasn’t perfect, for several reasons, said Feld.
“It’s hard for companies like us to exist there — they want retail, and we’re not that type of organization; we don’t match what the town is looking for and is prepared to work with,” he said, adding that this mismatch was compounded by the fact that the company quickly outgrew its quarters.
“We were just hanging on by packing people into every corner. We loved Northampton, but we simply ran out of space and couldn’t put it off any longer,” he said, adding quickly that Holyoke wasn’t on his short, or even long, list of possibilities for relocation.
“My understanding of Holyoke was limited and quite negative,” he told BusinessWest. “But our operations person really runs our show, and she lives in Holyoke, and she was really pressuring me to come down here. When I finally met John [Aubin] and looked at the space, I was very surprised and very much interested.”
Then came meetings with the mayor, school department leaders, and business executives, and Feld came away with the opinion that Holyoke should be his new business address.
As he talked about the space he will occupy, Feld made early and frequent use of the word ‘custom,’ and even put the adjective ‘quite’ before it. The space will include:
• Three private offices for secure communications within the main work area;
• Flowing, open areas featuring three main work ‘pods,’ or islands creatively configured to enhance collaboration;
• Uniquely curved inner walls, a signature of Aubin’s accessible modern design, that are mounted with whiteboards, providing ample work surfaces within the pods; and
• A curved conference room whose central position emphasizes VertitechIT’s collective brainpower and focus on creating solutions for clients.
“We gave John our ideas, not expecting to see much in return,” said Feld. “But he understood exactly what we were trying to do and, more importantly, understood the reasons for it. It wasn’t just like he could simply translate his customers’ desires into designs — he actually understood the reasons for it and agrees with it, and it follows the way he thinks in general. It’s a match made in heaven.”
Looking forward, Aubin said the obvious goal is to create more of these matches as controlled experimentation continues in his urban laboratory. What shape it will take remains to be seen, he noted, adding that, in many ways, Open Square will evolve as Holyoke does.
Elaborating, he said the planned return of rail service could drive economic development in many ways, because it will make the city more accessible — to workers, business owners, and even tourists.
“We’re looking at what the future is for this region, how soon it will get here, and how quickly we can move on it,” he explained. “The train will certainly open up opportunities — it will make commuting easier and open up markets as far south as New York City.
“We’re already looking to market our events space further south because of the train,” he went on, “and we’re looking at the possibility of a hotel. Like with the event space, there are other options within this market, but I think we can create a unique option for a hotel. It’s something we’re going to take a close look at.”
Finish Work
Aubin’s business card reads ‘Architect/Principal.’
The juxtaposition of those words speaks volumes about how he views his broad-ranging responsibilities with the company. In short, he’s an architect first, and he believes his focus on design and creating attractive, efficient working environments is helping Holyoke and Open Square reach that vast potential he mentioned, taking full advantage of the shift to urban living and working.
At the moment, he has designs on continued growth and leveraging the tremendous asset his family has owned for close to a half-century now.
And he’s confident that the pieces are in place for that to happen.
George O’Brien can be reached at [email protected]
Chinese Rail Manufacturer Eyes Former Westinghouse Site in Springfield
Changchun Railway Vehicles Co., the world’s largest manufacturer of rail cars, is strongly considering establishing its first North American operation in Springfield, on the 40-acre former Westinghouse site on Page Boulevard.
The Chinese company has been talking to city officials about building a 125,000-square-foot rail-car assembly plant and 33,750-square-foot office building at the site. Ameristar most recently purchased the property for $16 million in 2012, one of three casino companies that initially proposed gaming developments in the City of Homes, but later pulled out of the competition.
“We are very excited to be in discussion with the city of Springfield as we identify and address the necessary steps to advance our goal of building a rail-car manufacturing facility in Springfield,” Changchun President Lu Xiwei said in a prepared statement. “The interest and support displayed by Springfield officials at this early stage encourages our partnership and demonstrates a mutual interest in this effort.”
Changchun executives met Tuesday with Mayor Domenic Sarno and with U.S. Rep. Richard Neal, among other officials.
Interest in the site was spurred by the Massachusetts Bay Transportation Authority’s $1.3 billion program, announced last year, to replace and increase the capacity of its Red Line and Orange Line trains. According to the authority, the project will bring reliable, long-term relief to commuters who travel the Massachusetts Turnpike and rely on the Red and Orange lines to get to work and school.
Last October, the MBTA issued a request for proposals for the procurement to replace the 44-year old Red Line cars and 32-year old Orange Line cars. The project will deliver at least 226 vehicles — 152 Orange Line cars, replacing the entire fleet of 120, and 74 Red Line cars, with an option to increase the fleet to 132.
According to the MBTA, the new cars will provide improved reliability, accessibility, and energy efficiency. New features will include increased capacity and additional seating, wider electrically operated doors, four accessible areas per car, LED lighting, modern HVAC systems, and advanced passenger information and announcement systems.
The MBTA expects to award a contract for the cars by next winter, with the condition that the final assembly of the cars will take place in Massachusetts. Following extensive (and required) pilot train testing, Orange Line car delivery is scheduled to begin by winter 2018-19, and Red Line car delivery by the fall of 2019.
“Prompted by their participation in the request for proposals for the Orange/Red Line car procurement, [Changchun] representatives announced initial proceedings, including their selection of Springfield for its rich manufacturing heritage,” Changchun said in a press release, citing “ongoing conversations of support with state, city, local, and community officials.”
If the company, one of as many as nine vying for the work, gets the MBTA contract, it could employ 150 to 300 workers for at least 10 years. Using Springfield as a base, Changchun could conceivably expand further into the North American market.
The 60-year-old manufacturer has built more than 30,000 railway vehicles, exporting them to countries including North Korea, Iran, Iraq, Pakistan, and Sri Lanka.
In recent years, it has moved into higher-profile markets such as Hong Kong, Thailand, New Zealand, Australia, Saudi Arabia, and Brazil. Since 1995, Changchun has obtained more than $3 billion in export orders.
— Joseph Bednar
Business Growth Center Lives Up to Name Change
Director Marla Michel says the name change from the Scibelli Enterprise Center to the Business Growth Center represents a sharpening of the facility’s mission.
“Being a business owner can be very lonely and scary, and sometimes, even with your peers, you don’t want to let your hair down, to let your guard down,” she said. “You always have to project confidence as a business owner, because nobody wants to buy a product from a non-confident business owner.”
But that’s no excuse not to seek help when it’s needed, Michel added. As director of the Business Growth Center at the Springfield Technology Park, she’s been busy expanding the center’s programs, including its mentoring outreach to business owners.
“The way we do mentoring is, I build a team of professionals — three or four people who have experiences and skills and connections in areas relevant for that business owner — and we meet on a regular basis, anywhere from six to eight to 10 weeks, depending on where the company’s at; younger companies tend to need to meet more often.
“And we dialogue,” she continued, “about things that, for lack of a better word, are keeping the owner up at night. If we need to bring in other competencies and skills not on the team, we do. We allow it to be flowing because we have resources we can pull in at different times. And this development team serves as an informal advisory board for entrepreneurs and business owners.”
But for a mentoring program to work, she said, the business owner has to be honest and willing to accept advice.
“These mentoring teams allow a business owner to be himself or herself, and receive advice from people who know what they’re talking about, whether it’s an insurance expert, lawyer, accountant, or operations expert. Getting advice at the right time is very helpful, and time is money,” Michel said. “But, again, a company owner has to be willing. It’s easier to implement when you’re the kind of person who recognizes you don’t know it all.”
The fact that the Business Growth Center positively teems with knowledge, from the array of economic-development organizations, small businesses, and other agencies that populate the center, is one of its key strengths, she noted, and one that the center is actively marketing, not just to lease space at the center, but through a series of new programs and outreaches aimed at helping small businesses throughout the region grow and thrive.
To reflect that emphasis, what was originally called the Scibelli Enterprise Center — named for former Springfield Technical Community College President Andrew Scibelli, who shepherded the development of the Technology Park — changed its name to the Business Growth Center in October, although Scibelli’s name will continue to grace Building 101 in the complex, where the center is located.
“We felt that, for the program to reach its full capacity, we needed to change the name and embellish some of our programming,” Michel said. “The name ‘Business Growth Center’ speaks to businesses more than the Scibelli Enterprise Center. Now, the Business Growth Center is still a destination for space, but also a destination for programs, a destination for business owners to come when they’re thinking about growing.”
And that’s exactly what they should be thinking about, Michel said. “There was a growth study done by the UMass Donahue Institute that reinforces the reality that our region is dominated by very, very, very small companies, and they don’t know how to access capital.”
Why is that important? Consider the probability that MGM Resorts International will soon break ground on an $800 million casino in Springfield’s South End.
“If you have an operator like MGM that publicly says that, if it’s awarded a casino, it wants to commit $50 million to local businesses, you have to ask the question, do we have businesses that can bid on $50 million of business?” Michel asked. “Stated another way, can we keep that $50 million here? So we need to make sure that the companies that will bid for work for the casino have that capacity.”
In many ways, the facility is doing just that. In this issue, BusinessWest examines the changing face of the Business Growth Center, and the many ways in which it’s living up to its new name.
Growth Patterns
Dan Tuohey says locating at the center and accessing its resources has been a factor in the growth of psi 91.
“We had been thinking a lot about where we wanted to go, and that accelerated the conversation about our community mission,” she said. “The Technology Park, although it was created to support the community in the interests of the college, didn’t have the programming — just the space.”
So the conversation turned to boosting the programming offered by the center. “This is a real opportunity for the Technology Park to expand its mission of economic development beyond creating space for good jobs, which is a very good component of economic development, to adding programming to support the growth of businesses implicitly.”
The new offerings include the Stronger Businesses program, an eight-week initiative aimed at leaders of both for-profit and nonprofit enterprises. Each week’s three-hour session focuses on a specific area — from growing a self-sustaining customer base to focusing on the right products and markets — with the goal of helping participants assess their operations, gain new tools for solving problems and pursuing opportunities, and better align their operations, marketing, human resources, and executive management. A new series of sessions begins Jan. 7.
“This is a great example of the state’s embrace of the new Business Growth Center,” Michel said. “We received a grant from the Mass Growth Capital Corp. to help fund this program to help companies build capacity through self-assessment and learning about strategic marketing and operational improvements.”
Then there’s Capacity Building for Growth, a two-day workshop (next dates: Jan. 21 and 28) that helps small businesses develop core skills for scaling up their companies, as well as learning how to secure contracts from larger corporations — all with the goal of increasing small-business activity in Greater Springfield while helping company owners move to the proverbial next level.
“We did a lot of research,” Michel said regarding all the new initiatives. “We didn’t just say we’re going to do this. We talked to Babson College, talked to the Federal Reserve, talked to many of our community partners, and we looked at our community and our organizations that were already here in our building. We have great service providers doing a lot of good work.”
The new mentoring program is one way to leverage those assets for the benefit of the community.
“To have the kind of economic impact we’re hoping to, we had to reach more than just companies located here at the center,” she said. “For those not based here, we give them access to the best assets of the building, from the huge conference-room space to the community itself.”
The mentoring program has helped a range of companies at various stages of growth, she added, from those who haven’t yet seen revenue to growing firms that mentors have encouraged to tap new markets.
“Others need a legal sounding board,” she noted. “It’s not legal advice, but it helps you prepare for when you talk to professionals, so you ask better questions, so you have thoughts about things you didn’t have thoughts about beforehand. In some cases, it helps you make decisions, but it’s always your decision.”
Space Program
Of course, while the Business Growth Center works to expand its programming, its tenant space continues to be a key asset. Current tenants range from small-business training and counseling entities (including the Mass. Small Business Development Center Network, the U.S. Small Business Administration, New England Business Associates, SCORE, and the National Assoc. of Minority Contractors) to well-established businesses (such as Square One and the Achievement Network) to incubator tenants, or small businesses at various stages of getting off the ground.
Dan Tuohey joined the incubator in 2010 to launch his company, psi 91, which develops and distributes products for sports apparel maker Under Armor. That manufacturer’s foray into inflatable balls for various sports has given psi 91 myriad opportunities to grow, and being in the Business Growth Center has helped the startup — now boasting eight employees — do just that.
“It’s been a great benefit,” Tuohey said. “Before we were a revenue-generating business, we were meeting in conference rooms here, planning our launch. Marla was really helpful to us at that stage. We were taking our meetings from Dunkin’ Donuts and Panera Bread to an actual office environment.”
In addition, he said, “Marla put together a great advisory staff for us to meet with quarterly, area business executives to bounce ideas off — and shoulders to cry on when needed.”
Since its inception, psi 91 has gradually needed additional space, so it expanded into an adjoining suite to double its square footage. “That went very smoothly for us. We can use the conference room, too. It’s just a great place for a company our size as we have our initial growth.”
With space still available, Michel and her team are actively recruiting businesses and organizations to locate at Building 101, promoting both the physical space and amenities (including a state-of-the-art fiber-optic network), but also the community of economic-development resources that has given the center its reputation. More details are available at www.businessgrowthcenter.org.
“The park makes the region’s fiber footprint possible, and our collection of tenants enhances regional workforce and economic development,” said Ricky Swaye, chairman of the STCC Assistance Corp. board, which owns the Technology Park. “The Business Growth Center is a natural extension of our mission.”
Bottom Line
The overarching goal, Michel reiterated, is to help businesses — both inside and outside the Business Growth Center — succeed and expand, thereby raising the economic health of the entire Pioneer Valley.
“It’s really those businesses under 10 people that don’t quite have the capacity,” she said. “What I always like to say is, we need more medium-sized businesses here in the Valley. When we believe businesses contribute to our economic prosperity, they do it by employing people and paying taxes, but also through their philanthropic activity. If we have all tiny companies, they don’t have the capacity to give back to the community.
“We want to grow the next MassMutual, the next Smith & Wesson — well, maybe not on that scale, but we need to support our businesses so they can grow,” she continued. “We need to support them in learning how to be the acquirers as opposed to being acquired.”
After all, she explained, the main goal isn’t more large companies that are headquartered elsewhere, but businesses with deep roots in the Valley that grow, become significant employers, and maintain their local operations.
“We have family businesses that have been here for generations and generations, and all of a sudden the people who own the company aren’t here, and they don’t care as much,” Michel concluded. “I think we really need to support our small businesses and help them grow. It’s a cultural thing — we need to teach them that growth doesn’t have to mean greed. Growth is good.”
Joseph Bednar can be reached at [email protected]
Developer Edwards Says Springfield Is Poised for Rebirth
Glenn Edwards wants to attract UMass to the Harrison Place block by touting a ‘campus’ of services students might need.
“I love Springfield,” the real-estate developer told BusinessWest from his New York office. “My friends call it Glennfield because I talk about it so much — how beautiful my buildings are and how great the city is, with its museums and symphony and everything else.”
The buildings he refers to comprise the Main Street block between Harrison Avenue and Falcon Drive, including Harrison Place, the Johnson’s Bookstore Building, the Northwestern Mutual Building, and several other properties, which he acquired between 2005 and 2007.
That was just before the Great Recession struck, but Edwards more than weathered that storm, reporting more lease activity in the block over the past year than he’s experienced in a long time — at a time when Springfield’s downtown is on the rise, buoyed not just by a probable $800 million casino development, but plenty of other commercial activity, and possibly plans for a UMass satellite campus.
“For me, it’s a freak of nature that it’s not successful on its own because of its location,” Edwards said of Springfield’s accessibility to Boston, New York, Hartford, and Albany. “Yes, it’s had hardships downtown, but so did Harlem, Tribeca, Brooklyn, the Back Bay, the Fens — so many places can identify.”
But Springfield has plenty going for it, Edwards said, and it’s difficult not to put the casino — which MGM Resorts International has proposed to build in the South End of the city — at the top of that list, especially now that voters in West Springfield and, shockingly, Palmer have rejected casino projects in their communities. That leaves Springfield with the only proposal standing in Western Mass. mere months before the state’s Gaming Commission makes its decisions on where to issue licenses for the gaming palaces.
“How can someone turn down a billion-dollar venture?” Edwards said of the stunning defeat of Mohegan Sun’s casino proposal for Palmer. “But I was telling everyone from day one that Springfield was the logical selection. The city is in such need of this investment.”
He compared the city’s central business district to an ocean where a whale — MGM — might splash down, raising all boats. With MGM buying up properties and business tenants facing lease expirations, Edwards hopes other landlords in Springfield get the benefit of their relocations, rather than, say, Longmeadow or Northampton.
“If we take 200,000 square feet of retail and office out of the market, it immediately changes the demand equation for space in the city, and that is favorable, no matter what MGM does,” he explained. “If MGM never builds a casino but takes 200,000 to 300,000 square feet out of the market, the market would benefit. There’s an oversupply of space right now because the population hasn’t been growing in Springfield for 30 years.”
His vision is for other property owners to absorb the displaced tenants and use the influx of capital to further improve their properties, creating more demand to do business downtown. He has already been busy making improvements to his Main Street buildings, but his sense of optimism certainly needs no polishing up.
“The only thing that could get me really shook up is if MGM is not selected by the Gaming Commission — and that’s certainly not guaranteed; there are no guarantees in life,” he said. “Other than that, my outlook is very, very positive.”
Schools of Thought
Edwards says he has long been optimistic about Springfield, well before MGM was a factor. “Over the last year, we’ve had more activity — renewals of major tenants, new prospects looking, and new leases signed — than in any other year. And this is before the demand changes with MGM taking 14 acres and all the tenants to be displaced.”
He says companies are starting to look to Springfield for its reasonable real-estate costs, compared to other cities, and noticing the improvements being made by city officials in the business improvement district, which include everything from better lighting to an increased police presence. “The streets are much safer because of what the BID and Mayor Sarno have done, and all those things are laying the groundwork for a UMass or an MGM to look at Springfield seriously and say, ‘we want to be a part of this.’”
UMass? Quite possibly. Edwards was referring to the state university system’s recent investigation into whether Springfield might one day house a satellite campus.
“We applied for the UMass location,” he told BusinessWest. “When we did, what we said was, ‘we have a bank, we have a Fedex, a sports bar, a convenience store, a coffee shop, we’ll have a sandwich shop soon.”
That eatery will replace a B’Shara’s restaurant that recently closed in the Market Place alley behind the row of Main Street buildings. “We’ve actually turned down a few prospects; we want someone who has a good vision for it. We’re not going to take the first person; we’ll wait. We turned down startups that didn’t have the capital or the knowhow.”
In the upper floors of his buildings, he added, are tenants ranging from insurance and financial-services firms to a chiropractor and a dental office. “We are like a little city by itself. We’re trying to get UMass to embrace the downtown campus, so we’re promoting the Market Place where the street is closed off. It’s immaculate and safe, and cameras and plantings from the BID have changed the whole feel of that.”
Edwards said UMass responded positively to his properties and mix of tenants, but the most important goal is simply for the university to locate somewhere downtown.
“It’s not in our control. We hope and pray they follow through and move downtown; that’s the primary goal, that we end up with UMass taking up to 50,000 square feet downtown, whether they do that in my building or in two or three buildings. That would be an ideal situation for the city, to have all those students and faculty and visitors walking around the city from building to building. We’ll take any piece of that, or no piece, but it’s just so important to keep building on this Knowledge Corridor as one component to whatever else is going on downtown, from Union Station to the Paramount to MGM and sports and concerts. We hope it comes to fruition.”
Edwards has experienced some setbacks, like when the Dennis Group, a major tenant in Harrison Place, moved out in 2009 and relocated to the nearby Fuller Block. “That was the only major loss we had, and we didn’t lose them to going out of business or relocating out of Springfield. We just couldn’t supply them with enough space.”
And he said he wanted Cambridge College, which moved into Tower Square earlier this year, to locate in one of his buildings. But he also believes that success for any downtown landlord is a positive for all property owners, because it helps build overall momentum.
“I want everyone to do well downtown. If they do well, we’re going to do well,” he told BusinessWest. “We thought we had a great location for Cambridge College. But from a psychological standpoint, I’m just thrilled that they have a campus downtown. They didn’t select me, but life goes on. I hope that UMass comes downtown, that Union Station is filled; these are all very favorable things.
“Really, what it comes down to is, people want to go to a place where something is going on; they want their customers to come to a place where something is going on,” he continued. “And Springfield has something going on right now. If I was the only one getting tenants, and no one else was getting any tenants, eventually all my tenants would leave. I can’t do this alone. Kudos to the mayor, the City Council, all the people who are working very hard to make this happen.”
Looking Up
Meanwhile, Edwards said he’s poured hundreds of thousands of dollars into his buildings, often in ways that aren’t immediately noticeable, from elevator improvements to security cameras to high-tech wiring. “Now we’ll be spending on cosmetic things, to attract new tenants and enhance the experience of existing tenants. And I’m just one landlord. We’re all going to do this.”
It has often been a challenge to draw tenants to a downtown characterized by a shrinking population and too many commercial vacancies, but the tide might be turning; out of 260,000 square feet in Edwards’ Springfield properties, only 75,000 remain untenanted, and he’s currently negotiating over 30,000 of it.
He laughed when he mentioned his business partner, who’s 89 years old. “It’s hard to get him excited, but he’s so excited about Springfield. He calls me every day, asking, ‘what’s happening today?’ There is an excitement around this city you wouldn’t believe.”
Joseph Bednar can be reached at [email protected]
Former Tambrands Complex Becomes Home to an Eclectic Mix of Businesses
On the banks of the Chicopee River, the Palmer Technology Center hasn’t exactly lived up to its name, but it has become home to a wide array of businesses — and jobs.
It was the epicenter of economic development since as far back as she can remember. It kept the downtown of Three Rivers, one of four villages in Palmer, buzzing, especially at lunchtime. But when the plant closed for good in 1997, a few years of vacancy and stillness prevailed on Main Street, and the mill became another symbol of what once was in this blue-collar region.
Today, however, the sprawling, 325,000-square-foot complex is a different kind of economic driver, and small-business owners like Murray have become the face of the landmark — even if their faces are not seen by many people.
Several years ago, Murray’s company, Transportation Advisors, which offers nationwide consulting for trucking-industry compliance through Federal Department of Transportation regulations — specifically drug and alcohol testing — needed accessible, affordable space in which to grow.
She found all that and more at what is now called the Palmer Technology Center, a name that is somewhat of a misnomer — there are not many technology-related businesses in the complex — but that speaks to how the reinvention of the old mill has been a slow, steady battle that hasn’t exactly gone according to script.
Indeed, the original plan for the mill, said John Morrison, a former employee at Tambrands who later started his own construction and landscaping business and then acquired the mill, was to attract the technology-related businesses that were emerging in huge numbers with the dot-com boom. But while these intentions were good, the timing and location were not.
The Technology Park at Springfield Technical Community College was opening at the same time (1999), and it and other properties in urban centers such as Boston and Worcester were proving to be much more attractive locations than the former manufacturing town off exit 8 of the Turnpike.
Palmer native Lisa Murray has made her growing transportation business part of the revival of the PTC.
“It’s a great old building, and I’m a Palmer girl, so I like to keep it local,” said Murray, who became one of the first tenants on the fifth floor of the main manufacturing building and still lives in town. “There’s not a lot of industry left in the area, so if you have a business and you can hire people and house your company locally, it’s good.”
At present, there are 22 businesses in the mill that together employ more than 200 people, said Morrison, noting that, while this number represents a fraction of the workforce at Tambrands at the height of that operation, it is significant to a community that needs jobs, as well as a spark to support other service- and hospitality-related businesses in the community.
And the mill has become just that, said Lenny Weake, who wears two hats, one as the executive director for the Quaboag Hills Chamber of Commerce and the other as the owner of Alternative Options, Affordable Caskets and Urns in the PTC. He said the center has become a hub of economic development that is successful, even if it isn’t visible to many in the community.
“Because there isn’t a lot of retail here, the average person doesn’t even know all that’s going on, because you can’t see the parking lot from the road,” he explained, adding that the vibrancy at the mill has translated into new opportunities for Palmer and especially its rebounding downtown.
With less than 8,000 square feet of office space and 30,000 square feet of light warehouse space left to be leased, Morrison said, the mill complex is close to 90% occupied. That means the PTC has become a success story on a number of levels, especially when it comes to the property being referred to in the present and future tenses, instead of the past.
“We’re finally getting people to stop calling it the ‘old Tambrands building,’” he said with a laugh, noting that while ‘Palmer Technology Center’ doesn’t exactly roll off the tongue, it is gaining traction.
For this issue and its focus on commercial real estate, BusinessWest goes inside the PTC to chronicle the progress made there, and also to learn how this eclectic mix of business ventures has come together to create a unique success story.
Time and Space
Known originally as the Otis Mills, which processed cotton, the complex on the bank of the Chicopee River was home to Tambrands for 50 years, producing cotton products of a very different sort: tampons.
Procter & Gamble (P&G), Tambrand’s main competitor, purchased the corporation in 1992, ceasing the manufacturing operations, but converting the plant to its technical research and development center, which was eventually shut down in 1996.
“During Tambrand’s heyday, a woman could buy a box of tampons anywhere in the world, and it would say ‘manufactured in Three Rivers, Mass.,’” said Morrison. At that time, Tambrands had $662 million in global sales and just under 50% of the U.S. market.
Morrison’s knowledge of the building and the company’s history is understandable — they’ve both played a big part in his life, and his family’s. Not only did both of his parents work all their lives at Tambrands, but Morrison himself worked in the shipping department 25 years ago, before launching his landscaping company. He secured contracts with Tambrands for mowing, snow plowing, and scrap-metal collection, eventually evolving into a commercial and residential construction company.
It was that entrepreneurial spirit that caught the attention of P&G’s in-house broker; soon, Morrison was acting as the on-site broker for the corporation, showing potential buyers the mill complex.
And while he took a number of parties on tours, the building failed to generate much interest, despite roughly $20 million in renovations that were undertaken in the late ’80s. Frustrated by their inability to move the property at anything approaching their requested price of $3 million, P&G officials eventually reached out to Morrison and asked if he would be interested.
“I was just a landscaper, and I never say no to business, so I told him, ‘I’ll see what I can do,’” Morrison recalled, adding that he and some partners — Sid Covitch (now deceased), Len Jolles, and members of Covitch family — scraped together the capital to buy the complex for $685,000.
The original plan, as noted earlier, was to ride the tech wave sweeping through the nation and especially the Bay State. The thinking was that Palmer would be an ideal location because it was halfway between Springfield and Worcester. In reality, it turned out to be a little too far from both.
Meanwhile, the Technology Park at STCC had become a very visible, and formidable, competitor for the attention of tech companies.
“We had several come and look at the building because there was a lot of lab space, but they all had their eyes on either Worcester, Boston, or Springfield, and the STCC park was our main competition,” said Morrison. “We were trying to get the overflow from that, but people were very committed to Springfield at the time.”
So Morrison started keying in on more local businesses from a host of industry sectors. The common denominator was a need for accessible, affordable space, and, in many cases, large amounts of it. In meeting such needs, Morrison has been creative in putting specific facilities at the Tambrands plant to new uses.
For instance, the old kitchen of the Tambrands cafeteria is now occupied by Rogue Chocolatier, a small, award-winning cocoa-bean-to-bar manufacturer. Meanwhile, Alternative Options, Affordable Caskets and Urns is in the old computer-lab area, which has ramps that enable heavy caskets to be delivered and then shipped out.
Morrison’s two largest tenants are Mustang Motorcycle Products, which produces after-market motorcycle seats for all brands of motorcycles (it’s the second-largest venture of its kind in the world), and Wing Memorial Hospital’s Wing VNA and Hospice, specifically its billing department and file-storage facilities.
Filling the mill was a slow, sometimes frustrating process, said Morrison, who noted that confidence in his business plan eventually paid off.
When technology companies opted for Boston and Springfield, John Morrison said he targeted local businesses that would best fit the unique spaces in the old Tambrands mill.
Other tenants include Tony Valley Entertainment, DJ services and guitar lessons; Halpern Titanium, precision manufacturers of titanium cutlery and other metal products; Palmer Monson Family Network, a nonprofit counseling network; the Learning Factory, a children’s day-care center; Stan-Allen Co., a steel-rule die maker for cutting plywood for board games; National Library Relocations, full-service movers; and Sunshine Village, adult day care for the mentally challenged.
That nonprofit’s clientele has recently doubled due to the closing of the nearby Monson State Hospital, and now occupies almost 13,000 square feet.
“You would think, with so many different types of businesses, it would be more difficult to manage the property,” said Morrison. “But it all works together.”
Milling About
One of the newest tenants at the PTC, Weake said he landed there for one reason.
“I looked all over the place, and in all honesty, it’s the price,” said Weake. “John had the best price for the space that I could find anywhere.”
Currently, Weake’s casket and urn business is on the second floor, and while he’d rather have the frontage of a first-floor Main Street location, his showroom and reasonable rent offers the low overhead he needs to grow a business that was spawned by what he perceived as a recognized need within the community.
“I had a death in the family, and I was stunned to see the prices for all the funeral costs,” said Weake. “So I got into this business because I found that you don’t have to purchase directly from the funeral home; there is a Federal Trade Commission law that states that consumers have the right to shop for caskets and urns competitively.”
And while Weake is impressed with the success story unfolding within the old mill, he said the influence of those businesses extends beyond those walls and out onto Main Street and beyond.
“It’s very important from the chamber’s standpoint,” he said of the mill’s revival . “Palmer has a neat little downtown with New England charm. People are out and about, and if you think about it, in its heyday, 500 people were down here.”
Another unique business, EP Floors — which applies industrial seamless flooring for food-processing plants across the country, like National Fish & Seafood and King Cove Alaska — and its sister company, EPF Polymer Floors Electro Static Dissipating (ESD), which installs anti-static floor coatings for manufacturers of electronic items on concrete flooring, sought space in the mill for similar reasons.
“A dozen years ago, when it was pretty much empty, the office space drew us in because it was very affordable,” said Sean Mitchell, EP Floors and ESD operations manager. “And then there was the convenience of putting our shop here. We now have four offices and 5,000 square feet of shop space downstairs.”
Price and location were also paramount for Jim Hoag, president of Floormart Inc., a full-service flooring and installation business that was the first full-time business in the former mill. Now occupying 3,800 square feet, more than double the original footprint, Hoag cites the location, his family roots in the area, and the low overhead that the business and his headquarters afford him as reasons for his success.
“Word of mouth is a big thing in Palmer; people want to buy locally and not gravitate towards the big-box stores,” said Hoag. “I have a great local following and repeat customers.”
Morrison sticks to the ‘buy local’ theme by hiring as many of his tenants, like Hoag, as possible to provide their products and services to the PTC.
“To run the building, they use in-house people, and I do all the flooring here,” Hoag told BusinessWest. “He’s not going out and getting other contractors, and essentially that pays for my rent here; one hand washes the other.”
Room with a View
Like many of the repurposed mills in Western Mass., the PTC has not made people forget about the past. Indeed, this will still be the ‘old Tambrands plant’ to many, despite Morrison’s claims of putting that phrase to pasture.
And the businesses inside will likely never be able to match the employment activity at the former mill, which provided good jobs at good wages for generations of Palmer-area families, like Morrison’s.
But the technology center has brought a large dose of vibrancy back to an area that had lost thousands of manufacturing jobs and badly needed a spark. Murray summed up the development succinctly.
“Isn’t it wonderful that a building that was designed for one particular use back in the day to support the manufacturing of Tambrands has been recycled, and has all these great uses, and it’s really helping to revive the area?” she said. “Having grown up here and seeing all the empty buildings and manufacturing that has left, it’s nice that there’s something to replace it all with.”
Elizabeth Taras can be reached at [email protected]
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Northampton Commercial Real Estate Market Remains Resilient
Patrick Goggins, owner of Goggins Real Estate, says the resiliency of the Northampton commercial real estate market is no accident — it results from the city’s welcoming atmosphere.
“It’s so far and away from other markets, there really is no comparison,” said the president of Williamson Commercial Properties LLC in Springfield.
Steve Jasinski agrees. “The Northampton area seems to have been isolated from the downturn in the economy, it didn’t suffer the same pitfalls that occurred in other areas,” said the broker at Delap Real Estate LLC in Northampton and Amherst, explaining that the city’s economic and social diversity, strong employment base, and unique character of its downtown have provided a formula for success that is reflected in the value of commercial property.
But Patrick Goggins, owner of Goggins Real Estate in Florence, who has been in this business for more than 40 years, says the steadiness of the market is no accident. Instead, it results from a collective commitment on the part of business owners who have devoted time, energy, and thought to creating an atmosphere that is personal and welcoming to visitors.
He told BusinessWest the reason for Northampton’s success is fairly simple. “People are doing their own thing, but many businesses on Main Street are run and managed by owners who are here day in and day out. It adds a personal touch, which brings with it personal attention and gives them a better chance of succeeding and understanding the community and its needs. They know that connecting the dots is important, so they are a very active group, and when they see something is needed, they pitch in.”
Officials at Smith College have also joined forces with business owners to keep downtown vibrant, and have played a significant role in its financial success. “The town and gown works well here,” Goggins said, adding that the college has supported the Chamber of Commerce, Business Improvement District, Academy of Music, the new fire station under construction, and other organizations that play a role in the city’s unfalteringly robust economic climate.
Brokers John Williamson, left, and Steve Jasinski say downtown Northampton offers people a place to shop and dine in an intimate, personal setting.
“People leave here and talk about the diversity of Northampton — we’re known throughout the country and you can go to different parts of the world and mention the city and people recognize the name,” he noted. “But people have been key to its success and keep the economy going.”
Downtown and King Street are home to most of the commercial real estate, and two new banks, three car dealerships and other businesses recently opened their doors or are under construction on King Street. “It’s our commercial strip,” Jasinski explained. “And it isn’t just growing, it’s booming.”
Williamson agrees, and points to new developments such as Northampton Crossing, (the former Hill and Dale Mall), which sat vacant for about 20 years, but was purchased two years ago and is being re-developed into medical offices and retail shops. “King Street plays an important role in the balance of the Northampton commercial market,” he said.
Signs of vitality can also be seen at the gateway to the city, which officials designate as the area off Exit 18 from I-91 near the Clarion Hotel. A new 30,000-square-foot office building was completed there about a year ago.
“It was fully leased three months later,” said Williamson, adding that a second, similarly sized building is under construction. “There is not another office market anywhere in Western Mass that has this amount of positive absorption.”
New Frontiers
Goggins said that when he was a student at UMass Amherst, the businesses in downtown Northampton existed to serve the needs of the local community.
“In the late 60s, there were five men’s clothing shops and five hardware stores downtown,” he recalled, adding that the marketplace catered to men.
Fast forward to the early ’70s, when Fitzwilly’s restaurant opened and proved that it was possible to have a business that could cater to both college students and their parents.
“It was a new marketing concept for the area,” Goggins said, noting that it was the catalyst that changed the complexion of the downtown landscape. “But the interesting part is that it was not something that was promoted or orchestrated. There was no magic plan; it just evolved naturally through entrepreneurship. But it took people with nerve to open businesses here.”
In time, it became fashionable to have an office downtown, which led to a demand for housing there, Goggins recalled.
Jasinski said the large number of residences in and around Main Street contribute to the economy and strength of the city. “One of the key components to the success of downtown is that it is a neighborhood,” he told BusinessWest.
However, Goggins said the character of the buildings has remained the same for generations. He noted that in the mid ’70s the city council voted 5-4 against urban renewal at a time when other communities were embracing it and knocking down buildings in blighted areas.
“It was a very, very important vote and presented the base from where we have grown,” Goggins said. So, although apartments and condominiums were carved out of underutilized space on the upper floors of buildings, “they never changed architecturally, although they have been enhanced.”
He cites education as the primary economic driver in the city and said it has been a steadying force.
Jasinski concurs, and adds healthcare to the conversation. “We have great employers here, and jobs create a strong economy,” he said, as he talked about the five colleges and Cooley Dickinson Hospital. “And anyone who comes to Northampton seems to fall in love with the city due to our diversity, uniqueness, and the warmth of the community. You can walk down Main Street to Smith College and go through the gardens and greenhouse and around Paradise Pond. There is a lot to do and people are key to the success of the economy as they keep it going.”
It is also significant that rents have not risen significantly. “I am renting some spaces for the same price per square foot that they went for 10 years ago,” Goggins said.
But that doesn’t mean they are low. Downtown rents range from $25 to $40 per square foot, with locations closest to Thornes Market on Main Street capturing the high end of the market.
“The average is about $25 per square foot, which is comparable to what you would find in much larger cities,” Goggins said. “There isn’t even a close comparison anywhere else in the area.”
Changing Landscape
King Street is experiencing rapid commercial growth due to zoning changes instituted two years ago. “It was the only area where there was available land, but it was not conducive to commercial development so in the past people couldn’t take advantage of it,” Goggins said.
The change resulted from efforts on the part of the City Planning Department, the chamber, a group of residents, and a number of individuals, including Goggins, to position that area for growth.
Since that time, auto dealerships and other businesses have sprung up and continue to grow. “There are really only two parcels left that are right for development,” Goggins said. “The growth there has been a real eye opener for people.”
Williamson said King Street plays an important role in the balance of Northampton’s commercial market and allows institutions such as banks to have drive-up windows, something that’s not possible downtown. “There are two new auto dealerships under construction and Baystate Medical Center plans to have a medical clinic at Northampton Crossing. Most of the space there has already been pre-leased,” he said.
Another development that has been well received is the River Valley Co-op at the extreme north end of King Street. “It does a really bustling business,” Williamson said.
Goggins told BusinessWest that the city Planning Department is also interested in developing the corridor off Exit 18 on I-91. Cooley Dickinson Hospital is one of the primary tenants in the new office building there, and he expects the site that is under construction to be dominated by medical offices.
Meanwhile, property on Village Hill, built on the grounds of the former Northampton State Hospital, has also been in demand. L-3 KEO (formerly Kollmorgen) relocated there from King Street, a boutique hotel is being created in a building that once housed male attendants at the state hospital, and 9,000 square feet in a new 12,000-square-foot office building under construction are already under lease.
Goggins played a role in the revitalization, and said 150 of the 300 housing units planned for the site are complete and there are plans for several more buildings, which will contain a combination of office, industrial, and retail space.
The site is only three quarters of a mile from downtown, and although most tenants and building owners have been downtown for a long time, real estate opportunities do exist. The building on Main Street that housed the Mountain Goat is for sale, and a building across the street was recently sold to an individual who plans to renovate it.
“There is a lot of demand for property to lease as well as buy,” Jasinski said, adding that businesses often open on side streets, then add a second location on Main Street or eventually move there.
But real estate doesn’t come cheap. “A high end multi-tenant building in downtown Springfield that was fully occupied recently sold for $41.25 per square foot, where a similar building in Northampton would cost in excess of $200 per square foot,” Williamson said. “That really illustrates the difference between the Northampton market and other central area district markets. But the amount of availability is just about perfect, and there is just the right amount of churn. There is not so much vacancy that it is a deterrent to the market, but there is enough to satisfy the requirements of businesses as they come into Northampton for the first time.”
Bright Outlook
Williamson said the demand for commercial space indicates there will be a need for additional construction in the city. “The future bodes well for continued office development, and people can expect to see the announcement of other developments in the next year. Plus, values on Main Street will continue to appreciate at very respectable rates,” he predicted.
Goggins agreed. “The image of Northampton is consistent as it is an oasis that people like to come to,” he said. “So, the value of property has held up, which is an indication of how solid the community is. It has been able to prosper and ride out the cyclical downturns because the real estate market is directly related to the perception of Northampton from the outside in.”
Which continues to be a magnetic force that lures visitors from the local area and beyond.
Understanding the Fine Print Can Save Your Company Money
Paul Kinney
This business warning was issued by the National Retail Tenants Assoc. (NRTA) as the organization unveiled a new education program for office-property administration professionals, including many in the Western Mass. area.
The program included a presentation made to the organization by Rick Burke, a leading lease-administration professional and NRTA member. He noted that many office tenants in the Greater St. Louis region and beyond oversee their real-estate portfolios very informally without a designated lease-administration department or a trained person to review landlord billings. In fact, they often just pay what is billed by the landlord without any review, basically throwing money away.
So often we hear office tenants ask, “should I be asking my landlord for all the invoices to verify our operating cost?” or “we want to start a lease administration department; who do we hire, and how do we train them? ”
For the past 17 years, the NRTA has provided education programs designed to help retail real-estate professionals improve their lease-administration skills. Now, the NRTA has expanded its reach to office tenants seeking lease-administration training in order to answer these types of questions.
The NRTA advises office tenants to seek out lease-administration training in order to answer these types of questions. One such resource is an annual conference hosted by the NRTA. This three-day event typically attracts upwards of 500 professionals representing the leading retail and office tenants from across the nation. NRTA classes focus on lease-administration best practices and cost-recovery skills relating to common-area maintenance expenses and overall occupancy cost.
Today’s business environment mandates that an office tenant with multiple office locations must put a process into place to safeguard critical lease information and review all landlord billings for overcharges. It is essential for larger portfolio tenants to have a lease-administration software system, so information such as rent amounts, option notices, and operating-expense exclusions is readily available. A single mistake in any one of these areas can prove very costly to the tenant, often without them ever knowing it.
For example, during a recent audit for an office tenant, auditors found the landlord was overbilling for parking-garage expenses that were not included per the lease. The tenant was paying on a per-space basis outside of the lease as well as paying for all the cost of the parking garage through the operating expenses. The dollar-for-dollar savings to the tenant was $150,000.
Another recent audit compared base-year expenses with the current-year expenses. It identified many accounts that were not in the base year that were being billed in the current year. The landlord included management and other salary accounts not in the base year, thus overstating the current-year expenses in comparison to the base year. This allowed the tenant to reduce the current-year operating expense as well as recover amounts for the three prior years of operating expenses totaling $220,000.
A common expense that is frequently an overcharge to the tenant is real-estate taxes. Much like the review of taxes in retail audits, office and industrial tenants find themselves paying for real-estate tax parcels that are not defined as part of the building or property. The parcel could include a building or land that the landlord owns next to the office building, or perhaps it could be for undeveloped land that the landlord has slated to build on in the future, or an abated assessed value that did not get passed through to the tenant. These types of overcharges are not uncommon and, if identified, will reduce the tenant current and future operating cost.
Large overcharges to tenants can occur when calculating the ‘gross-up’ lease clause. The gross-up is the method of increasing operating expenses for a non-fully occupied building to represent a fully occupied building. How the gross-up is applied to fixed and variable expense accounts and how it is applied to the base year could result in a significant overcharge to the tenant.
Other areas where landlord overcharges loom are in management fees, overtime HVAC, pro-rata-share allocation, and capital expenses. Unless the reviewer is trained to understand these issues, the overbilled amounts can continue undetected.
This year’s NRTA annual conference is at the Renaissance Hotel at Sea World in Orlando. Its education program features 52 lease-administration classes and 17 small-group discussions in which practitioners are able to meet with people having similar challenges.
Classroom presentations are organized into six tracks: lease administration, occupancy cost, office leases, real estate, legal, and professional development.
Office-tenant courses cover topics such as “Understanding Operating Expenses,” “Reviewing and Auditing Operating Expenses,” “Negotiating an Office Lease,” “Understanding Mixed Use Cost,” and “Global Issues in Lease Administration.” Office tenants explore best practices designed to safeguard lease information, help them be more efficient, and save their company money. Companies such as Lease Administration Solutions, Cresa Partners, Cassidy Turley, and Fresenius Medical Care are among the presenters for the office classes.
For more information on the conference and membership, visit the conference page on NRTA’s website, www.retailtenants.org.
Paul Kinney is executive director of the National Retail Tenants Assoc.; (413) 525-4565; [email protected]
BID Strives to Improve, Promote Downtown Attractions
By KATHLEEN MITCHELL
Don Courtemanche lives in downtown Springfield. He walks to work and takes advantage of the cultural events, eateries, and other offerings readily available to him in the area.
“I think of downtown as a neighborhood. It’s a place where I want to live, stay, and raise my family,” said the executive director of the Springfield Business Improvement District, or BID, adding that he can walk to 40 restaurants from his home on Maple Street, which is not technically within the boundaries of the BID, but certainly impacted by the organization’s efforts.
BID board member Evan Plotkin says the ultimate goal of the organization is to make the downtown vibrant and culturally important to the region so it will attract new residents and businesses. “We want to see a return of the middle class and others who have left or abandoned the city,” said the president of NAI Plotkin on Taylor Street in Springfield, in the heart of the BID. “If you create a vibe that improves the perception of what downtown is, you will start to attract new retail businesses, restaurants, and a segment of the population that could move into apartments there.”
The boundaries of the 26-block BID stretch from the Connecticut River to Chestnut Street, and from Bliss Street to the railroad tracks. Union Station, which is undergoing renovation, is the northern bookend of the district. And although some people shy away from downtown because they think it’s unsafe, Cortemanche says that’s a false perception.
“People who are not familiar with the area tend to be skeptical in terms of its public safety,” he told BusinessWest. “But if you look at the statistics, the BID is the safest neighborhood in the entire city in terms of crime.”
The problem, he went on, is that, “since downtown is the face of the city, whenever anything bad happens, people associate it with Main Street.” For example, when the tornado hit, people watched it cross the southern part of the downtown area on their TV screens because that is where the weather cameras are situated. “As a result, business in the BID plummeted, not because the buildings there were destroyed, but because people assumed the streets were impassable since the media reported the news from the downtown area. The general consumer doesn’t know where the BID begins and ends.”
Plotkin agrees. “A lot happens downtown that is blown out of proportion,” he said.
Still, in spite of economic woes that have hurt urban centers across the country, the BID has held its own in recent years. Its focus now is to continue to collaborate with groups that stage cultural events, bring more people downtown, and, most importantly, take measures to make people feel safe when they visit the district.
This is going to become easier thanks to a recent change in the state’s BID statute, which was passed in July by the Legislature as part of a jobs bill. It no longer allows commercial properties to opt out of membership or paying a fee to an established BID, which they were able to do in the past, even though they benefited from services.
Those services range from keeping the area clean to upgrading streetscapes; from undertaking capital improvements to assigning representatives to act as ambassadors during conventions to help direct tourists and serve as extra security on the street, along with helping to beautify the area and promoting attractions and events.
Ongoing Maintenance
Courtemanche said Springfield’s BID, like others across the state, suffered when property owners opted out of the organization. “It became incumbent on us to do more and more with less and less,” he explained.
But, thanks to the new law, there will be more revenue with which to work. “The statute allowed property owners to reaffirm their faith in the BID,” Courtemanche said, adding that it has a 98% approval rating from its members. “We have had meetings with our members who had opted out to see what they want, and their number-one priority is clean and safe streets.”
To that end, the BID has purchased new cleaning equipment, which includes an additional street sweeper, and has also established two new lighting initiatives. One is the installation of LED lights in existing fixtures owned by Western Mass Electric Co., which will double the amount of illumination and reduce energy use by 25%.
The second is a pilot program that began in January on Worthington Street that allows property owners to install new light fixtures on their buildings, with the BID picking up 75% of the cost. “It contributes to the perception of public safety and will have a huge effect because it will light up the beautiful architecture we have downtown after dark,” Courtemanche said.
Keith Weppler, who co-owns Theodore’s Booze Blues & BBQ on Worthington Street with Keith Makarowski, said they chose to have the energy-efficient lights installed. “They really light up the whole building,” said Weppler, who is another BID board member.
He cited other benefits the organization provides. “I see how dirty the streets are early in the morning after a weekend and what a difference it makes after the BID’s cleaning crew comes by. I really appreciate it, and although belonging to the BID doesn’t directly affect my business, it helps the city. Their communication with the police department as well as their work with other businesses is part of the synergy that creates a positive downtown.”
He has also taken advantage of the BID’s affiliation with city officials. “They know who to call if you have a problem,” he said, citing an instance when he had an issue with outdated parking signage outside his establishment and the BID helped get the matter resolved.
The BID has 30 security cameras linked with the Police Department and Department of Public Works, which can spot someone illegally dumping trash or relay the news that a traffic light is out and creating a backup at an intersection, Courtemanche said. It also stages events, including the Stearns Square Concert Series, which brings 5,000 to 8,000 people downtown every week in the summer.
“It started with 10 concerts and has grown to 12, and the spinoff is huge for the parking facilities, businesses, and restaurants in the district,” Courtemanche added. In addition, the organization supports a multitude of events, ranging from those held at the Springfield Museums on the Quadrangle to the World’s Largest Pancake Breakfast, the annual Spirit of Springfield’s Big Balloon Parade, productions at CityStage, and basketball games at the MassMutual Center.
New Promotions
Recently, the BID launched a number of new promotions designed to bring people downtown.
These include giving away tickets to Falcons and Armor games via a weekly drawing for people who register on the BID Facebook page.
“While that might not seem like a huge move, these people park, go out to eat, may visit a bar after the game, have a great time, and become comfortable downtown,” said Courtemanche.
The BID also employs social media to keep people abreast of ongoing news, such as whether restaurants were open after a gas explosion in November that destroyed a downtown bar and sent glass and bricks flying down Worthington Street.
It also recently finished a promotion that began in December in which people who took photos of themselves in front of restaurants such as Nadim’s and Subway on Main Street, where sidewalk construction is underway, were entered into a drawing for restaurant gift certificates.
“It was hugely popular,” Courtemanche said. “And right now, we are gearing up for spring, which is arguably our busiest or second-busiest season.”
In addition to power-washing the sidewalks, BID employees also fill about 300 planters and 300 hanging baskets scattered throughout the zone with flowers. “We also want to generate a buzz about real -state property here,” he said.
The agency’s plan is to hold open houses in approximately a dozen empty storefronts over the next few months. The first will be in a 3,000-square-foot space beneath the Chestnut Park apartment complex that has sat empty for years. “We will have food and entertainment, and hopefully it will result in a new tenant,” Courtemanche told BusinessWest.
Although real-estate brokers are welcome, the hope is that people who live and/or work downtown will attend the events and convey information about these sites to people they know who may want to open or expand a business. “The downtown consumers have a built-in bias as to what type of retailer they would like to see,” he said.
However, BID officials admit that a lot needs to be done before the area becomes a thriving neighborhood. But they are steadily working toward that goal.
“We still have a lot of vacant space, but we are on the road to the day when we become an urban theme park, which is what successful cities do to attract entrepreneurs,” Plotkin said.
Courtemanche agrees, and says small things add up. “A rising tide floats all ships, and casino or not, the fact that the BID continues to make huge leaps during one of the worst economic climates in decades is telling,” he said. “Businesses are continuing to open, and the area continues to grow.”
Future Outlook
Courtemanche said the BID is doing well. “There is certainly room for improvement, but we are holding our own and seeing growth in terms of more employees and more foot traffic. The biggest elephant in the room is where the casino will go, but once it lands, there is a lot of pent-up development that will take place,” he said. “The BID really is a special place.”
Plotkin agrees. “Every downtown has problems from time to time,” he said, “but if we can populate our area with an eclectic mix of diverse people and promote the restaurants and businesses, we will be able to bring about a renaissance here.”
Unique Sports Facility May Become a Game Winner for Agawam Site
Sean Provost says the Stick Time Sports training facility will meet a recognized need in the region.
He remembers thinking to himself, “hmm … I wonder if that could work?”
‘That’ was a 20,000-square-foot space adjacent to the Dave’s Soda & Pet Food City facility in the former Ames department store location. When Provost saw it, it was being used as warehouse space for dog food and other products, but he immediately saw the potential it presented as the home for a dream he’d been trying to make reality for roughly a decade.
This dream involved creating what he called a “sports training center,” focused on hockey, which he’s played and coached, but also other sports. The concept calls for a facility where young people can learn a sport and develop their skills through practice. This vision required a large amount of open space, a good deal of flexibility, and an affordable price — three things he couldn’t find at dozens of other sites he considered, but a combination he encountered at the Agawam location.
Fast-forward those two years, and Provost, recently laid off from that sales job, is set to take a dramatic career turn as president of something called Stick Time Sports (STS), which will feature two mini-ice rinks — both 45 feet by 82 feet — as well as two 45-by-85-foot synthetic turf fields that can be used for a variety of sports, including lacrosse and field hockey. There is also an area for strength training and conditioning with machines and weights; a facility for conferences, birthday parties, and other events; locker rooms; and space for additional expansion.
All this fulfills one of Provost’s ambitions, but also creates some needed momentum in a large retail center that has struggled to reinvent itself since a FoodMart supermarket closed after its roof collapsed more than a decade ago. There are some new tenants moving into the complex, including a satellite facility for the YMCA of Greater Springfield, and it is hoped that those initiatives and Stick Time Sports can create greater vibrancy in that location.
Those were some of the sentiments expressed by Dave Ratner, owner of the former Ames building and Dave’s Soda & Pet City.
“I had to get some new warehouse space,” he said with a laugh in reference to the new development, “but this [venture] increases the value of the building, it will bring more potential customers to my store, and it will make the center more viable so new people might want to move in to the other side of the center. So all in all, it’s a win-win.
“Traffic gets traffic,” Ratner added. “The more places we get there, the more people will say, ‘I want to be there.’”
Meanwhile, STS is one of many sports-related business ventures taking shape in Agawam. In addition to STS and the Y’s facility, there are plans for something called the Plex Sports Park, a $7 million, indoor-outdoor complex to be built at the former Crowley’s Sales Barn and Stables site off Shoemaker Lane.
For this issue and its focus on commercial real estate, BusinessWest takes a look at the STS project and how it may help bring more life to a once thriving retail section of Agawam.
Goal-oriented Venture
Using some of his trademark humor, Ratner described his efforts over the past several years to lease out the 20,000 square feet next to his retail operation.
“The fact of the matter is, we had a lot of interest, but because the real-estate market isn’t real strong, people thought they were going to come in and we were going to pay them to take the space,” he told BusinessWest, adding that, while he wanted to find a tenant, he also liked having the space as a warehouse facility, so he wasn’t going to pull the trigger on a deal unless it really worked for both sides.
And in many ways, STS fits that description.
Ratner said it won’t be a huge revenue source, but it will potentially drive more traffic to his store while creating more momentum in the still-struggling retail plaza. “This is a huge deal,” he noted. “I think his business is going to explode more than he thinks it’s going to explode, and I think he’s going to need every bit of space over there.”
And that’s why he worked with Provost to not only ink a lease, but get his venture off the ground.
“I sat down with him and I said, ‘I think it’s a home run, but you have to get your business plan together,’” said Ratner, adding that he ran though the lengthy process of taking a concept from the drawing board to reality, essentially becoming Provost’s ‘Mr. Murphy,’ a reference to Murphy’s Law.
“Whenever you do anything in business, Murphy’s Law — Mr. Murphy — moves in right next to you,” said Ratner.
Having been a partner years ago in a group that owned and operated the Mushie’s Driving Range on Main Street in Agawam, Provost said he learned a good bit about what not to do in business, and eventually got out of that relationship (that property is now being turned into a solar farm).
And for his second foray into commercial real estate, Provost began working with the Mass. Small Business Development Center Network in Springfield, where he received assistance to finalize his business plan, along with help to secure two business partners: Daryl Devillier, associate vice president with Raymond James, and partner Sal LaBella. The partners eventually secured bank financing for the estimated $1 million buildout of the property.
Provost said STS is going to be dedicated to providing athletes of all ages from Western Mass. and Northern Conn. the opportunity to practice, train, improve their skills, and just have fun in a positive atmosphere.
Provost explained that there’s really no facility in the region where parents or coaches can rent some ice and enable young people to get some invaluable practice time and hone their skills. “For instance, baseball players can warm up anywhere, but hockey is different, and now, two kids can share a half-hour to shoot a few hundred pucks at $15 apiece.”
He added that the site will also fill a void in the region for full-year, under-14 and under-16 boys hockey, and its location, just a few miles from both the Connecticut line and several Western Mass. population centers, enables it to tap into both markets.
Richard Cohen, Agawam’s mayor and also an avid former hockey player and coach, is a strong supporter of the STS concept, and told BusinessWest it’s a perfect fit for the town’s growing inventory of sports-related businesses.
“It goes along with what we’re trying to put together … a sports complex that was originally going to go in Chicopee” but couldn’t get special permit approval for a site there, said Cohen, referring to the Plex Sports Park, an indoor-outdoor facility with an 80-foot-high, inflatable dome.
Cohen also noted that one of the other Agawam Towne Center building owners is looking into indoor karting as an addition to the retail area that now includes Dave’s and STS, Slot Car Speedway, Friendly’s Restaurant, and the soon-to-open, 8,500-square-foot Y Express Wellness & Program Center.
And just a few hundred feet from Agawam Towne Center, the long-vacant Games and Lanes building is in the subject of a $50,000 site assessment, funded by MassDevelopment, to determine the scope of needed environmental remediation, an important first step in putting the property back in use.
“There is a developer who wants to do business retail there,” said Cohen, “so my goal is to help get that project finalized for that entire area.”
Winning Approach
Looking to the future, Provost and his partners purchased a ‘chiller,’ the compressor that makes and maintains the ice, which is larger than they actually need and will allow them to build a third mini-rink on a portion of the turf area.
Meanwhile, the idea of expansion elsewhere is also being discussed.
“There’s no room to physically expand, but we think if this works here, it can certainly work in other places,” he said, adding that there is still a sizeable inventory of former warehouse and retail facilities that could become home to such ventures.
For now, though, he’s focused on making STS the win-win proposition that he, Ratner, Cohen, and others believe it can become. And he believes there will be net results in many forms.
Elizabeth Taras can be reached at [email protected]
Springfield Offers Substantial Tax Incentives to Residential Developers
The ability to attract developers of market-rate housing to Springfield has just been made easier thanks to a new tax-incentive program being administered by the Mass. Department of Housing and Community Development.
This effort, known as the Housing Development Incentive Program (HDIP), allows developers to apply for local and state tax incentives for the rehabilitation of multi-family properties for sale or lease primarily as market-rate units if located within a ‘housing development incentive zone,’ or HDIP zone. The program is available only in ‘gateway municipalities’ that have successfully registered as an HDIP zone with the Commonwealth. Springfield is now one such municipality.
On Dec. 3, 2012, the Springfield City Council approved an HDIP zone pursuant to a housing development zone plan, as recommended by the Springfield Office of Planning and Economic Development. The plan establishes a zone encompassing sections of the city’s downtown, North End, and South End. Included in the HDIP zone are three projects that the city believes could potentially have a market-rate housing component: Chestnut Street School, the Student Prince, and State Street Lofts.
The plan is purported to be consistent with the Urban Land Institute plan of 2006, which encouraged more downtown middle-income housing; the Zimmerman Volk Downtown Market Rate Housing Study of 2006, which indicated a market demand for such housing; and the 2012 UMass Medical District Report, which indicated that there is a significant number of medical professionals currently choosing to live outside of the city.
The Commonwealth’s recent approval of the Springfield HDIP zone represents a significant business opportunity for developers and a possible rebirth for the city’s struggling downtown.
The HDIP provides two major tax incentives for developers of multi-unit market rate housing:
• A local real-estate tax exemption in an amount not less than 10% and not more than 100% of the incremental value of the market-rate units for a period of not fewer than five years and not more than 20 years. Previously, these agreements could only be offered to commercial developments; and
• A state investment tax credit of up to 10% on all qualified expenditures in creating and constructing new market-rate housing units.
To qualify for these tax benefits, the development must have between two and 50 units, 80% or more of which are targeted for market-rate residential use and priced for households with incomes above 110% of the area’s household median income. Preliminary estimates for Springfield indicate the median income to be around $49,084 per year. There are no ceilings on the pricing of sales or rents or for the income of occupants.
Qualifying projects can be proposed in the Springfield HDIP zone, and require approval from the city and the Commonwealth.
The approval by the Commonwealth is a three-step process. First, based upon an application containing basic information about the property, the developer must seek preliminary approval that the building meets the standards of a certified housing-development project.
After receiving preliminary approval, based on a more extensive application, which includes construction documents and a marketing plan, the Commonwealth will consider the issuance of a conditional certification of the project. Once all of the certificates of occupancy have been issued for the housing-development project and 80% of the market-rate units have been leased or sold, the Commonwealth will consider issuing a final certification which designates the project eligible for the tax incentives.
According to the plan, the city envisions that the implementation of the HDIP will help to eliminate vacancy and blight conditions of some of the city’s commercial buildings by converting underutilized upper floors to attractive market-rate apartments; increasing foot traffic, which is a critical component for neighborhood viability; retaining local talent as well as recruiting talent from other areas by providing attractive housing opportunities for young professionals who work in and around the HDIP zone; promoting historic preservation; and strengthening the city’s ability to attract high-quality development to Springfield.
Ellen W. Freyman is a partner with the Springfield-based law firm Shatz, Schwartz & Fentin, P.C., who concentrates her practice in all aspects of commercial real-estate acquisitions and sales, development, leasing, and financing. She has an extensive land-use practice that includes zoning, subdivision, project permitting, and environmental matters; [email protected]. Michael A. Fenton is an associate with Shatz, Schwartz & Fentin who concentrates his practice in the areas of business planning, commercial real estate, estate planning, and elder law. He represents principals in business formation and succession planning, businesses in the purchase and sale of enterprises, developers in the acquisition and permitting of projects, and high-net-worth individuals in establishing comprehensive and sophisticated estate plans; [email protected]
New Property Owners Can No Longer Opt out of These Programs
Michael Fenton
In the past, owners of real property located within a BID were allowed to convey their property interest without saddling the new owner with an absolute obligation to pay annual BID fees. These new owners were allowed to ‘opt out’ of their respective BIDs; however, this opt-out power was recently extinguished by state law and replaced with a mandatory BID-renewal procedure. The new law significantly impacts the rights of property owners in BIDs across the state and deserves the attention of any entity or individual with a current or future interest in such property.
On Aug. 7, 2012, Gov. Deval Patrick signed into law an “Act Relative to Economic Development and Reorganization,” which substantially amended Mass. General Laws (M.G.L.) chapter 40O, dealing with BIDs. Under the new law, purchasers of real property located within a BID no longer have 30 days to opt out. Instead of the opt-out power, all participating owners of real estate located within a BID are able to take part in a renewal vote on the BID every five years.
The renewal meetings are to be called by the BID board of directors or its designated agent on or before the fifth anniversary of a newly created BID and then again on or before each fifth anniversary of the date of the most recent renewal vote. If a majority of the eligible participating property owners present at the renewal meeting, in person or by proxy, vote to renew the BID, then the BID will continue for an additional five-year term.
If, on the other hand, said eligible participating property owners vote not to continue the BID, the BID will proceed to conclude its business in accordance with M.G.L. chapter 40O. This renewal procedure is a simple proposition for BIDs created after the effective date of the new legislation on Aug. 7, 2012, but it presents serious complications for property owners in BIDs created prior to said effective date.
BIDs formed prior to Aug. 7, 2012 are also required to have renewal meetings every five years. As specifically provided in M.G.L. c. 40O, the initial renewal vote for BIDs in existence prior to Aug. 7, 2012 may be held at any time on or before Jan. 1, 2018. Accordingly, an existing BID may hold its first renewal meeting at any time on or before Jan. 1, 2018, subject to the giving of notice to the BID’s participating property owners at least 30 days prior to the meeting.
Property owners who opted out of participation in a BID prior to Aug. 7, 2012 will remain non-participating owners until the date of the first approved renewal vote, at which point such property owners automatically become participating property owners. However, since property owners who previously opted out of the BID are non-participating owners at the time of the first renewal vote, they are not entitled to notice of the initial renewal meeting, and are not permitted to participate in the initial renewal vote.
What Does This Mean?
As a result, it is likely that existing BIDs will be motivated to call for the first renewal vote far in advance of 2018 in the interest of collecting revenues from previously non-participating owners in the near future. This could prove to be frustrating for property owners who opted out of participation in the BID when they acquired their property interest.
After the initial renewal meeting of an existing BID, if the participating property owners vote to continue the BID, the BID will no longer have any non-participating property owners, and, accordingly, all property owners in the district (including owners who had previously opted out) will be entitled to notice of, and have the right to participate in, future renewal meetings.
With Western Mass. serving as home to four BIDs that were in existence prior to Aug. 7, 2012 (Springfield, Amherst, Westfield, and Northampton), the impacts of this legislation hit close to home. Property owners who previously opted out of participating in a BID can be forced into participating without notice at any point between Aug. 7, 2012 and Jan. 1, 2018. If renewal votes are passed by participating property owners, then an owner who previously opted out of the BID will have to wait up to five years before being able to vote on the renewal of the BID.
Attorney Michael Fenton is an associate with the Springfield-based firm Shatz, Schwartz and Fentin, P.C. He concentrates his practice in the areas of business law, real-estate development, and estate planning. He has served on the Springfield City Council since 2010; (413) 737-1131;
www.ssfpc.com
High-profile Ludlow Mills Project Takes Big Steps Forward
Westmass President Kenn Delude
It was the time just before, during, and since the Great Recession of 2008, and in some respects, it’s still ongoing.
“It was painfully slow,” Delude, president of Westmass Area Development Corp., recalled, looking back (although he alternated between the past and present tenses) on that time when the phone literally didn’t ring for weeks and sales of industrial-park parcels were extremely few and very far between. “I’ve seen many downturns in the economy, but nothing as broad-based as that, nothing that severe.”
But it was at the height of this development drought that Westmass started putting together the most ambitious project in its 52-year existence — redevelopment of the sprawling Ludlow Mills complex in the center of that community. And despite the hardships and the realization that the slump would continue into 2014 and probably beyond, the Westmass board never wavered in its pursuit of the mill property, said Delude, and for two very good reasons.
The first was the realization that, eventually, the development climate would change and there would once again be demand for land and space in which companies could expand, he said, noting that, while Westmass and Westover Metropolitan Development Corp. have adequate supplies of property at the moment, both organizations must think decades out. The second reason was that the mills provided a unique opportunity for Westmass to do something groundbreaking — in both a literal and figurative sense.
“Strategically, this was a decision made by the board to take on a brownfield project, to get involved in a community, and obviously get involved and deal with the issues concerning preservation,” he explained during an interview in the Westmass office within the complex. “Overall, we wanted to create a model for property like this that could be used elsewhere or inspire other parties such as municipalities to take on something like this.
“We have countless mills throughout our region, and they’re located, like this one, by beautiful rivers,” he continued. “They have prime locations from many perspectives, but they’re underutilized, or they’ve fallen into disrepair.”
Westmass is roughly 18 months into what will probably be at least a 20-year endeavor to redevelop the mills and fill the adjoining 170 acres of greenfield property. But already there is a good deal of momentum, despite the still-sluggish economy.
Indeed, the steel is due to be delivered within days for the next phase of construction of a new, $27 million HealthSouth rehabilitation hospital on a parcel in the center of the mill complex. And in conjunction with that project, plans are being developed for the first stage of a riverwalk that will connect the site with the nearby Chicopee River in ways that could promote further development. Meanwhile, plans are moving forward for a senior-housing complex to be created in what’s known as Mill 10.
At the same time, the phone has actually started to ring again in the Westmass office, said Delude, noting that there has been interest expressed in some of the larger green parcels within the mill complex.
And in another development that is expected to create still more momentum, the project was recently included in the third round of funding for the state’s Brownfield Support Team (BST) initiative. Launched in 2008 by Lt. Gov. Tim Murray, the BST brings together local, state, and federal agencies to help advance and accelerate redevelopment efforts involving brownfield sites.
Such designation has triggered progress at both the former Uniroyal site in Chicopee and the former Chapman Valve complex in Indian Orchard, said Delude, adding that BST involvement will bring needed resources and expertise to the matter of readying sites for future new construction or reuse.
“This gives us access to a team that can help us understand and perhaps deal with some of the challenges a developer and a community face when trying to redevelop property like this,” he said. “You have very stringent energy codes and greenhouse-gas analyses, and goals you’re trying to achieve, and, at the same time, you’ve got historic-preservation regulations to contend with. There are a number of issues to address, and these consultants can help us find answers.”
For this issue and its focus on commercial real estate, BusinessWest takes an in-depth look at the Ludlow Mills project and how a picture is starting to develop across the vast, blank canvas it represents.
Milling About
As he talked with BusinessWest about the mill project — something he’s done on several occasions since it was first put on the drawing board in 2009 — Delude said it does many things for Westmass.
For starters, it gives the agency an immediate, and always welcome, revenue source.
Indeed, the agency is now a landlord and property manager, collecting rent from nearly three dozen tenants. This additional income, especially at a time when the many business owners are still hesitant about taking on new construction and the cost of such work is considerably more than retrofitting existing space, provides the agency with needed stability.
Meanwhile, it also provides much greater diversity, he said, noting that, in addition to developable, often shovel-ready land that is currently not in high demand, Westmass now has former mill property in its portfolio, and it comes in many shapes and sizes, and with myriad potential uses. The development corporation also gains needed acreage for larger-scale projects, and even 6,000-square-foot stockhouses — dozens of them were used to store raw materials at the jute-manufacturing complex — that could serve effectively as incubator facilities for startups and next-stage companies.
An architect’s rendering of the new HealthSouth facility now starting to take shape at the Ludlow Mills complex.
“The perfect scenario would be to have someone as a lease tenant,” he continued, “and as they became successful and grew, they would be able to build new at Ludlow Mills on another location. There would be a natural continuity there, and people wouldn’t have to leave the area, or even the community, to grow.”
All this, or at least much of it, was envisioned by Delude and the Westmass board as the Ludlow Mills acquisition started to take shape in the midst of that deep downturn that Delude described.
Retelling the story of how this project came to be, Delude said the nearly 1.5 million-square-foot mill complex was once the very heart of Ludlow’s economy — so much so that the clock tower at the corner of one of the mills has become the unofficial symbol of Ludlow, used on the town seal as well as the masthead of the weekly Ludlow Register.
After the mill operations shut down, the complex became home to a host to a number of businesses across several sectors, including manufacturing and distribution. The maze of buildings and adjacent undeveloped land, totaling more than 1,000 acres, caught the attention of Westmass officials as they scouted opportunities to expand the agency’s reach, portfolio of developable land, and roster of business opportunities.
Delude acknowledged that the project is seemingly far removed from the agency’s primary business model — creating, marketing, and, eventually, filling business parks (it now has five across Hampden and Hampshire counties) — but is firmly in keeping with the Westmass mission of creating opportunities for economic development in the region.
Building Momentum
The vast potential of the Ludlow Mills for creating different kinds of development opportunities is driven home by the first two announced projects for the site.
One is a $20 million plan forwarded by WinnDevelopment to build 83 units of senior housing on four floors of what’s known as Mill 10, built in 1907. It represents one of many forms of possible reuse of an existing structure, said Delude, adding that this proposal also meets a recognized need for such a facility in Ludlow, and thus presents an opportunity for many long-time residents to continue living in that community.
The second project, the new HealthSouth rehabilitation hospital, is new construction, and represents an opportunity for Westmass and the mill complex to enable a business to expand and stay within the region or, in this case, in the town of Ludlow itself.
“We wanted to stay in Ludlow, but at the same time we knew we couldn’t stay here,” said HealthSouth president Scott Keen, referring to the old Ludlow Hospital, which currently houses his facility and is only a few hundred yards from the mill complex. “From a business perspective, if you’re in a town that’s supported you for many years, and the community supports you, and you’ve had a successful business, it makes no sense to do anything but try to find a way to stay, and that the mill gave us an opportunity to do.”
Elaborating, he said the complex provided the acreage and the location the growing venture needed to take an operation inconveniently spaced over five floors of the old community hospital and move it to a facility with nearly 20,000 additional square feet all on one floor.
Moving forward, Westmass wants to create more of both types of development opportunities, said Delude, adding that the mill complex offers the size, flexibility, and existing facilities to meet almost any need.
To prove it, he went to a large, aerial photo of the complex, complete with blocks of yellow designed to show what could potentially be built in certain areas of the parcel.
For example, the area around the site of the new HealthSouth facility is suitable for buildings 10,000 to 40,000 square feet in size, while the greenfield further to the east is suitable for buildings of 60,000 to 150,000 square feet. Meanwhile, those aforementioned stockhouses can accommodate smaller ventures, and the existing mill structures can house a wide range of business and residential ventures.
“The broad goal for us is to be as flexible to the market-driven demand as possible,” said Delude.
And this is where the potential to create a working model for other communities and development agencies to emulate comes into focus, he continued, adding that there are similar mill complexes (although not as large) across the state that present the same set of challenges and potential opportunities.
“When we met with legislators on Beacon Hill to discuss funding for this project, there were a number who identified with this project and the challenges and were encouraging us to forward, because they had their own mill experiences,” said Delude, referring to officials from Haverhill, Lawrence, and other former manufacturing centers.
This connection, coupled with the large scale of the project, were certainly factors that led the Ludlow initiative to be chosen for assistance from the Brownfield Support Team, he went on, adding that the technical support from the BST will help facilitate and accelerate efforts to make the site ready for the various kinds of development it can support.
Meetings with the team will commence later this month, he went on, adding that the expertise provided by team members may help remove some of the potential roadblocks to the development, specifically the need to balance historic-preservation efforts with increasing demands — both at the legislative level and within the business community — for buildings that are energy-efficient.
“These buildings were built in the early 1900s — they’re energy-inefficient by nature,” said Delude. “For the first time, the Department of Energy Resources will be on a round of Brownfield Support Team intiative projects, and they’re interested in use of renewable energies and sustainability, and that hits the sweet spot with us and these older buildings.”
Progress in Site
Delude said the high-profile nature of the Ludlow Mills project brings with it a certain amount of pressure to succeed, but overall, the fact that high-ranking state officials, including Gov. Deval Patrick, are watching this project is a very positive thing.
“They want us to succeed, and they’re giving us the tools to succeed,” he said of state officials. “If there is any pressure, it’s internal to ourselves; we want to succeed, and we want to do it as quickly as possible, but there is a natural process that has to take place, and it starts with infrastructure, and it starts with preparing for the development that we’ve modeled and that we hope to achieve.
“We have a lot of people behind this project and enthusiastically supporting this project,” he went on, adding quickly, “it would nice if the economy would support it as well.”
It will — eventually — but even now, the sluggish times are not enough to dampen enthusiasm for a project that promises to be historic on a number of levels.
George O’Brien can be reached at [email protected]
A listing of available commercial properties
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MGM Unveils Plans for Casino in Springfield’s South End
An architect’s rendering of the proposed MGM Springfield.
As he stood at a podium talking about MGM Resorts International’s plans for a casino in Springfield’s South End, Bill Hornbuckle repeatedly referenced an image displayed on large projection screens in the front of the room.
This was a black-and-white photograph of a section of downtown Springfield from nearly a century ago. And as he discussed that scene, through the magic of technology, the streetscape was transformed into a vivid color image of roughly that same location (see page 41) as it would look after MGM was done creating an $800 million casino, hotel, and entertainment complex there.
And with that, the competition to bring a casino to Western Mass., and, more specifically, to the City of Homes, took a major leap forward.
Indeed, for the first time, a casino developer has put a specific plan on the table. It is known for now as MGM Springfield, and Hornbuckle, the company’s chief marketing officer, is the company official charged with making it happen.
He explained the initiative at an elaborate press conference at the MassMutual Center that drew more than 200 business leaders, elected officials, and scores of media from across the state. He shared the podium with MGM President Jim Murren, who welcomed those assembled by saying simply, “we want to be here; we want to be in Springfield.”
An architect’s rendering of what Springfield’s South End will look like if the planned $800 million MGM Springfield becomes reality. The view is from the south at the corner of Union and Main streets.
As he talked about the proposal, Hornbuckle said the contest to be named the designated Springfield casino project (there are at least two other plans coming together) — as well as the fight that would follow to gain the Western Mass. casino license — will be spirited competitions, and the corporation is ready for what will be a pitched battle.
It has already launched a Web site (www.mgmspringfield.com) that introduces the project and invites input from area residents, and has launched a series of television and print ads announcing the initiative and its role in tornado-recovery efforts. And billboards will soon be appearing with the message: “World Class Entertainment, Gaming, and Dining. HERE.”
“We go hard and fast when we go, and we’re going,” Hornbuckle said. “This is a competition … and we’re in it for the journey.”
Going All In
As he referenced the old image of Springfield’s downtown and its technology-enhanced morphing into a casino site, Hornbuckle said the juxtaposition of images was chosen by MGM and its marketing team to show how the planned casino complex would effectively transform the old into the new.
Actually, it would blend the old — such properties as the old MassMutual headquarters at the corner of State and Main and the former South End Community Center, for example — and new, including a 25-story, 250-room hotel; shops and restaurants; entertainment facilities, including a movie theater and a high-end bowling alley; and new market-rate housing.
It was also chosen to convey that a new era in the city’s history would be unfolding, one that would, in this case, transform an area — the South End — that had fallen on hard times in recent years and then found itself squarely in the path of the tornado that changed Springfield’s landscape in many ways last June.
Overall, the more than 500,000-square-foot, mixed-use development would include the hotel (with amenities such as a spa, pool, and roof deck), 89,000 square feet of gaming space, and about 70,000 square feet of retail and restaurant space that would accommodate 15 shops and restaurants and a multi-level parking garage.
An architect’s rendering of the planned Armory Square in the proposed MGM Springfield.
Those are two properties for which the city will soon be issuing RFPs (requests for proposals), said Hornbuckle, adding that MGM will need to prevail in those contests if its vision is to become reality. In the meantime, MGM has gained control of several privately owned parcels in the development zone, and has many others under contract.
Plans also include 400,000 square feet of market-rate, one- and two-bedroom apartments, intended for young professionals working in the new entertainment district, said Murren, adding that MGM intends to partner with local cultural institutions, with the broad goal of jump-starting a new era of economic development in Springfield that will radiate out from the project onto Main Street and into other parts of the downtown and the city.
“I want to build a landmark here, and I want to integrate the assets you have already have — you have great bones here in the city,” he told those assembled at the press gathering. “The job we have is to knit all that together. We don’t want to build a box; we want to build an urban environment.
“We want people to walk up and down the streets, we want people to enjoy themselves, we want people to shop, go to movies, and go bowling,” he continued. “We want families to enjoy being here, and we want people to move back into the city, and I think we can be a big catalyst for all that.”
The blueprint for accomplishing all that will come together by borrowing concepts from existing MGM projects as well as from established retail and entertainment centers, said Hornbuckle, who then clicked to a PowerPoint slide that showed roughly how the complex will come together.
The stretch of the site along Main Street will be devoted to retail, offices, and residential buildings, he explained, adding that the hotel would be constructed along State Street, using the historic building at 73 State St. as the main entrance. Parking would be created along the western side of the property, near Columbus Avenue, and the aforementioned Armory Square would be created between Howard and Union streets.
The casino itself? It would be the middle of all this, said Hornbuckle, adding that it would be essentially invisible to those walking or driving by the site.
“It’s a casino you won’t see,” he explained, adding that MGM Springfield is being designed with the casino as just one part of the experience.
“What’s critical about the design is that you can interact, whether it be the hotel, the gaming, the entertainment, or up on Main Street, without having to go into the casino,” he noted. “We’re not forcing you to into that environment; if you want to bring a family to enjoy this, you can. That’s a critical element, especially for an urban casino.”
Both Murren and Hornbuckle stressed that no indoor entertainment area is planned for MGM Springfield. Instead, the company plans to partner with existing facilities such as the MassMutual Center, Symphony Hall, CityStage, and local museums, including those at the Quadrangle, to help drive traffic to those facilities. To that end, a pedestrian bridge has been proposed to link the MGM complex with the MassMutual Center.
Placing Their Bets
Several times during his address to those assembled at the press gathering, Murren said that event marked the start of a conversation, or dialogue, on the company’s plans to take its brand into downtown Springfield.
That dialogue will continue over the next several months as MGM’s plans are finalized and rival plans join the competition for the Western Mass. license.
But company officials already believe they have a winning hand, and they’re betting heavily that the community — not to mention the state’s Gaming Commission — will feel the same way.
George O’Brien can be reached at [email protected]
Pittsfield Strives to Generate Interest in Business Park at GE Site
Above, the GE Pittsfield Works in 1946. At top, an aerial shot of the portion of that same property that has become the William Stanley Business Park.
Stanley, a long-time engineer with Westinghouse, created his prototype in 1886, in Great Barrington, but his concept, which made it possible to spread electric service over a wide area, would most dramatically change the landscape — and in many different ways — in nearby Pittsfield. It was there that he started the Stanley Electric Manufacturing Co., the venture eventually purchased by General Electric and later renamed the GE Pittsfield Works, a sprawling large-transformer-manufacturing complex that, at its height in the 1960s, employed more than 13,000 people.
Today, Thurston, executive director of the Pittsfield Economic Development Authority (PEDA), is hoping that innovation can again transform this property near Silver Lake more than a quarter-century after GE announced that it was closing the massive plant. The 52-acre business park, created on roughly a dozen various-sized parcels, transferred to the city by GE in recent years, officially opened in early June with a ribbon-cutting ceremony at the Mountain One Financial Center in a corner of the property off East Street.
The facility, a 6,735-square-foot, LEED-certified structure dominated by glass, is catching the attention of the city and the region, said Thurston, who is confident that it will also capture the imagination of the business and development communities, and eventually help repopulate the mostly barren acreage with a broad mix of businesses.
“It showed the naysayers, who didn’t believe anything would ever happen here, what can be done,” he explained, adding that the quick timeline for the project — it was announced in April 2011, ground was broken that August, and construction was completed on March 30 — demonstrates how the city is committed to making things happen on the property.
Moving forward, one possible catalyst for redevelopment could be a planned 20,000-square-foot life-sciences building, said Thurston, adding that the venture could be funded through a $6.5 million earmark granted to Pittsfield as part of the Commonwealth’s Life Sciences Bond Bill.
Intended as a stage-two facility for companies looking for room to get to the next stage, the 20,000-square-foot center would be a facility that could house and foster the kind of innovation that gave the park its name.
Beyond that initiative, though, the park could become home to anything from retail to light industrial; from green-energy ventures (there’s already a 1.8-magawatt solar power array on the property) to municipal facilities.
“We’re optimistic,” said Thurston. “Typically, in the Northeast, 70% of your economic development comes from within, from expansion of companies in the market already. We’re focusing quite a bit on making sure that our existing businesses have opportunities to grow, while we’re also looking at other options such as government facilities.”
There are a number of challenges involved with redeveloping the former GE complex, said Thurston, listing everything from the stigma attached to brownfield sites, even though this one has been cleaned, to competition in the form of perhaps 1 million square feet of former mill space in Berkshire County vying for the attention of startups and established businesses alike. But he is optimistic that the park can soon become a center for both innovation and jobs, as it was decades ago.
“We believe that this is a model for cooperative remediation and redevelopment efforts across the country,” he told BusnessWest while looking over a large aerial photograph of the GE complex taken decades ago. “There is enormous potential here.”
For this issue and its focus on commercial real estate, BusinessWest ventured to Pittsfield to learn how officials there hope to transform the landscape in this section of the city and, in some ways, have history repeat itself.
Current Events
Thurston said it’s difficult to quantify or even qualify the impact GE’s operation had — and still has — on the city.
This view from the northeast shows some of the vast open space now available for redevelopment with the transfer of the former GE property to the city of Pittsfield.
And part of that reinvention is the redevelopment of the property on which Stanley Electric and then GE operated for close to a century, a project that has been ongoing for more than 13 years now and is defined by both challenges and opportunities.
Fast-forwarding through the years since a definitive economic-development agreement between GE, the city, the Environmental Protection Agency, and other parties was inked, Thurston said the 52 acres now under PEDA’s control have been remediated and transferred to the city for redevelopment. The pace of progress has often been frustratingly slow — the last parcels were not transferred until earlier this year — but significant momentum has been generated in recent months.
Standing outside the front door of PEDA’s office on Kellogg Street, which has a commanding 360-degree view of the site, Thurston hit the highlights. Pointing to his far right, toward Silver Lake, he referenced the solar installation completed by Western Mass. Electric Co. in 2010, as well as Mountain One’s project.
Turning to his far left, he pointed out a large 16-acre parcel on which several GE buildings once stood. It is, to the best of Thurston’s knowledge, the largest open, developable (“unimpeded” was the word he chose) tract in Pittsfield, and land that could be subdivided any number of ways to suit the needs of developers.
And, sweeping his hand to the right, he pointed out Woodlawn Avenue and the now-closed bridge (built in 1906) over the railroad tracks that run through the middle of the complex. The street, formerly a private way that bisected GE’s plant, will be repaired and made a public road, and a new bridge will be constructed by the state, said Thurston.
“This will hopefully be a real catalyst for our rebuild,” he said, noting that the site, hemmed in by residential neighborhoods and narrow, winding side streets, will need a secondary form of access in the form of an open Woodlawn Avenue to reach its full potential. “Finishing up these key infrastructure pieces is very crucial for us and our ability to put a large manufacturing facility or retail center that employs a large number of people on one of these sites.”
As he talked about that process, Thurston said the plan has several basic components, all designed to increase awareness of the site and its many amenities, and then bringing prospective tenants to PEDA’s door.
At present, the city is conducting some target marketing, while also working to connect with a host of public and private partners on the project, he continued, noting that this constituency includes a number of players.
Cory Thurston, seen in front of a map of the new business park, says the site has amenities that could attract ventures from across several sectors of the economy.
Meanwhile, another potential partner, and major asset, as Thurston described it, is CSX Corp., which has a rail line that runs through the middle of the site and, with Woodlawn Avenue, creates four sectors of redevelopment.
“We’re working with their economic-development team to identify rail-friendly tenants that might be interested in an opportunity in downtown Pittsfield,” he explained. “They’re in a large growth mode, and rail service could be an important factor in drawing people to this site.”
Watts Next?
PEDA and these various partners have what Thurston considers a very salable product, one with amenities attractive to businesses in a variety of sectors.
At the top of this list is developable land that is in many cases ‘shovel-ready,’ a technical term used to describe land that is clean, fully permitted, and, as the phrase suggests, ready for a shovel.
Other parcels don’t quite fit that description, said Thurston, listing that aforementioned 16-acre parcel, for example, which has elevation changes and old foundations as the primary but still minor challenges to be overcome.
Another amenity, he told BusinessWest, is location, which is driven home in promotional aerial photographs of the site that prominently feature Crystal Lake and the nearby Berkshire mountains.
Beyond scenery, though, Pittsfield is located roughly halfway between Albany and Boston, said Thurston, and thus could be an attractive option for emerging technology and life-sciences companies operating or doing business in both markets. There is also the Berkshires’ still-affordable high quality of life, he went on, adding that this mix of selling points should turn some heads.
However, there are some challenges as well, including an economy still in recovery mode, that aforementioned stigma about brownfield sites, especially one with such a high profile, and a huge glut of former mill space in Pittsfield and surrounding communities that offers an attractive alternative to business owners, and one that usually carries a lower price tag than new construction.
“We’re confronting the same challenges being faced from a manufacturing and industrial perspective across the Northeast,” he explained. “New construction is difficult, and we have a lot of wonderful facilities in Pittsfield and across Berkshire County, like some of the old paper mills that have been repurposed, where businesses can grow and expand; there’s a lot of competitive real estate that still stands.”
But overall, Thurston believes the business park is the proverbial right place at the right time, and he thinks the planned life-sciences building is a potential-laden project that could drive that point home, while also creating some potential future tenants.
As currently conceived, the center would go beyond a typical incubator, providing next-stage companies with the shared lab space, broadband capacity, and other amenities needed to make that jump to where they’re ready to begin production and take on employees.
“This would be a nice, low-cost, quality-of-life facility that they could move their venture to and continue their growth and development,” he said, adding that the next phase in the project is convincing the state to release the earmark, a process that is already underway. “We want to create something new and exciting in Pittsfield.”
Overall, PEDA will be patient with the broad redevelopment process, said Thurston, adding that, in every way possible, it will “leave its options open.”
That sentiment applies to everything from potential reuses — the site has been mentioned as home to everything from retail complexes to municipal facilities, including a new courthouse and police station — to individual parcels.
Indeed, while it is likely that the 16-acre parcel mentioned earlier will be subdivided, PEDA will not do that until options for one larger user have been explored and exhausted.
Getting Amped Up
While it’s extremely unlikely that the former GE site will again be home to 13,000 jobs, said Thurston, the business park created there has vast potential to again play a lead role in shaping the economy of Pittsfield and the surrounding area.
What that shape will be is anyone’s guess, he noted, adding that it will take years to fill in the canvas.
But the process is well underway, momentum is building, and there are clear signs that this facility can live up to the name it’s been given.
George O’Brien can be reached at [email protected]
