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Razing Expectations

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Kevin Kennedy expects several proposals for what is now known as 1600 Main Street.
Commercial Real Estate Sections
Strong Interest Projected for the Former Asylum Nightclub Building

Kevin Kennedy expects several proposals for what is now known as 1600 Main Street.

Kevin Kennedy expects several proposals for what is now known as 1600 Main Street.

Kevin Kennedy says the original plan for what has long been known as the Asylum nightclub building in Springfield’s downtown was to take the property with the checkered past — there were a number of controversial all-night concerts there before the building was eventually shuttered due to safety concerns — and give it a new use as home to public offices.

In fact, his large department, Planning and Economic Development, or parts of it, was among many possible public-sector tenants that became part of the discussion when it came to the Asylum’s future.

But that was a few years ago, said Kennedy, the city’s chief development officer, noting that many positive things have happened in the interim that have prompted him to change his perspective on the now-renovated Asylum property. Indeed, a number of success stories, including the redevelopment of 1550 Main St. (the former federal building), the pending arrival of Thing5 and 300 new jobs in One Financial Plaza, plans for WFCR-AM to move into the Fuller Block across Main Street from the Asylum property, and other developments, have prompted Kennedy to believe there is strong private-sector interest in the building and its 21 on-site parking spaces.

He’ll find out just how much over the next several weeks as the city first issues a request for proposals (RFP) for development of the property’s 6,000 square feet, and then awaits responses.

He believes there will eventually be many to consider.

“I think there will be an active market for that building,” he told BusinessWest, adding that he considers commercial office space the most likely — and desired — reuse of the property. “Downtown is changing — for the better — and this could be another big success story there.”

Recounting the recent history of the Asylum building, Kennedy said that, as MassDevelopment proceeded with plans to revitalize and retenant the former federal building, the city knew it had to do something with the troubled property across Worthington Street from 1550 Main St.

The eventual plan conceptualized by the control board that was essentially running the city at that time was to raze all but the 6,000 square feet fronting Main Street, and create parking, as well as space for community events, on the demolished portion of the property.

And those plans were carried out over the past year in a $1.6 million initiative, funded with state and federal money, that included façade work that includes new signage that essentially renames the property 1600 Main Street.

The original intended tenants were public-sector entities, said Kennedy, adding that the Business Improvement District, the Springfield Parking Authority, and the Planning and Economic Development Department (currently located on Tapley Street) were all considerations.

But with those aforementioned positive developments downtown in recent months, those plans changed.

“When I came to this office [in December 2011], I took a look at the changing conditions in the downtown, with Thing5 coming in, the revitalizing of 1550 Main, the work that Herbie Flores [president of the New England Farm Workers Council] was doing on the blocks immediately adjacent to it, WFCR, progress in Morgan Square, and other developments, and came to the conclusion that we should RFP this for private use.

“That would enable us to get it back on the tax rolls,” he continued, “and that makes far more sense than public-sector use.”

And Kennedy believes there will be considerable interest from the private sector, especially with nearly two dozen on-site parking spaces, an attractive selling point to companies who might consider a downtown mailing address but have been hesitant to locate or relocate downtown due to concerns about available, convenient parking.

“Having 21 spaces adjacent to the building should help create a strong market for the property,” said Kennedy, adding that the RFP includes plans to locate a public market in that parking area on Saturday mornings.

Kennedy acknowledged that it’s difficult to forecast the level of response to an RFP — some recent projects have drawn considerable interest, while others, such as the former York Street Jail, failed to capture the attention of the development community — but he anticipates several proposals due to the strong combination of location, amenities, and the momentum gained in that part of downtown over the past several years.

Time will tell if Kennedy’s optimism about the site is fully warranted, but at the moment, he’s quite confident that the property’s reuse and return to the tax rolls will become part of that list of positive developments along Main Street — and perhaps prompt still more additions.

If it does, then it is likely that the city can retire that phrase ‘Asylum building,’ something it’s been trying to do for many years now.

 

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

Framing the Future

By
John Simpson in the transformed space on the ninth floor at One Financial Plaza.
Commercial Real Estate Sections
Downtown Initiative May Prove to Be a Unique Stroke of Genius

John Simpson in the transformed space on the ninth floor at One Financial Plaza.

John Simpson in the transformed space on the ninth floor at One Financial Plaza.

Evan Plotkin says the ninth floor of One Financial Plaza had been “dark” — that’s a commercial real-estate industry term synonymous with vacant — for more than six years.

“With a few exceptions, no one had been in there, except for maintenance people, in a long, long time,” Plotkin, co-owner of the building and president of Springfield-based NAI Plotkin, told BusinessWest, adding that things have changed dramatically over the past month or so, and in a way that bodes well for Springfield and its downtown.

Indeed, roughly one-third of the ninth floor is now the exact opposite of dark, and while this space hasn’t exactly become a tourist attraction — not yet, anyway — a large and diverse group of people have hit that button in the elevator over the past several weeks. Many city officials have made the trek, as have many UMass trustees and administrators, including new president Robert Caret and recently named Amherst campus Chancellor Kumble Subbaswamy. The city’s police chief, William Fitchet, has been up for a look, as have a number of Plotkin’s friends and lovers of art.

They’ve come to see a unique collection of paintings, sculptures, and other works of art assembled by John Simpson, manager of the Hampden Gallery at UMass Amherst and an art professor in the Commonwealth Honors College at the university. Many of these same works had been occupying space — meaning that, in many cases, they were leaning up against walls, often back-to-back — in a gallery/theater in the old Hampden Dining Commons in the Southwest residential area at the university.

When Simpson was essentially evicted from that space by the building inspector several months ago, he launched a frantic search for alternative accommodations in which he could display art and create more of it. Before he really got started, Plotkin, who has been at the forefront of efforts to use art to stimulate economic development in Springfield, offered him a good chunk of the ninth floor free of charge.

It was, as they say, a deal he couldn’t refuse, and what the two men have created is intriguing on myriad levels.

Starting at the elevator doors, art abounds, ranging from self-portraits of the Commonwealth College students who created many of the works on display to various pieces that were part of a display on Egypt that Simpson helped create for the Springfield Museums nearly a decade ago.

But as they look out on all this art, both Plotkin and Simpson see something else — opportunities that come in many forms. These include the ability to demonstrate the potential for art to bring attention, energy, and vibrancy to a city or downtown, as well as a chance to show the leaders at UMass how an expanded presence in Springfield, something city leaders have desired for some time, could benefit both the school and the community.

“I like to say that we’ve planted a seed,” Plotkin told BusinessWest. “We’re watering it, we’re going to nurture it, and hopefully at some point in time this will grow into something bigger.”

The ninth floor is crowded with an eclectic mix of art, including this piece from an exhibit on Egypt at the Springfield Museums.

He envisions UMass eventually taking over all or most of the ninth floor and bringing a program or programs to the downtown, perhaps in the form of a satellite campus.

“We’re hoping that someday, UMass will plant its flag here,” he said, “and that some component of the university is located here. We have serendipitously gone in this direction, and now we have something wonderful that we can build on.”

For this issue, BusinessWest talked with Plotkin and Simpson about what they’ve done in One Financial Plaza, and also about how they expect that seed that’s been planted to germinate and yield something special.

 

Brush with Fame

Printed over one of the entranceways to the ninth floor from the bank of elevators is a famous quote from author John Updike: “What art offers is space — a certain breathing room for the spirit.”

In this case, though, it was the need to create physical space for the art in question — not to mention breathing room for Simpson — that provided the first compelling chapter of a story that could unfold in any number of ways.

For now, it’s a tale of new life for formerly dark square footage, or an opportunity, as Plotkin put it, to “activate” more space in Springfield’s downtown. He’s been using that term often in recent years, always in reference to taking facilities that were dark — in either a literal or figurative way — and putting them back into use, or better use.

Examples include everything from the revamped plaza area at 1550 Main St. (the former federal building) to the park-like spaces within the Morgan Square apartment complex further down Main Street, to the lobby of One Financial Plaza, which has become an art gallery of sorts in recent years. Meanwhile, many buildings and open spaces downtown have been further activated by the placement of many works created by local artist James Kitchen. His welded-metal creations, such as the massive ‘Saturn’ now gracing the small park created on the former Steiger’s lot, adorn many public and private spaces as part of another initiative spearheaded by Plotkin.

How the ninth floor at One Financial Plaza came to join that list is a saga that began when Simpson was turned out of his space at UMass.

Evan Plotkin, right, with John Simpson

Evan Plotkin, right, with John Simpson, equates his activation of the ninth-floor space to “planting a seed.”

Backing up nearly a decade, Simpson said he’s been involved with several projects, such as the display on ancient Egypt for the Springfield Museums, as well as creation of the Art Discovery Center in the George Walter Smith Art Museum at the Quadrangle, and a Buddhist temple that was displayed at the Smithsonian as well as the Springfield Museums. His search for space to store and display these pieces and others brought him to the Hampden Theater, which the university allowed him to use for more than eight years. But this arrangement conflicted with the university’s plans to put Hampden back into use as a dining commons, he continued, so he was forced to vacate the premesis.

The university has been cooperative in trying to find alternative arrangements, Simpson went on, but in the meantime, Plotkin offered something more immediate and potential-laden, in a building that has made great strides in recent years in terms of reducing a high vacancy rate, but still has several vacant floors.

“Pushing us out of Hampden created this opportunity to display all these years of work by the students, making it a living thing,” Simpson explained. “So people can make things and at the same time look at these previous accomplishments, and learn how to do their own.”

In less than two months, Simpson and some of his students have transformed a large portion of the ninth floor from a dark, cold (figuratively) place with peeling wallpaper in many places into an oasis of art worthy of that Updike quote.

There is ample gallery and reception space, with walls crowded with paintings and other art forms, most of them created by Commonwealth Honors College students who are not art majors, but have created art that somehow expresses their chosen field of study. There is also a large studio — formerly the cafeteria for the most recent tenant, UniCare — that boasts the large amount of natural light that artists require.

 

The Shape of Things to Come

The donation of the ninth floor for the foreseeable future solves Simpson’s immediate need for space, said Plotkin, but it also provided a significant opportunity for more of that “activation” work that he described.

“We’ve been successful in using art as a vehicle to transform space, and now it’s happened again here,” he said, gesturing with his hand to the art all around him. “This floor was vacant and dark for more than six years; now, it’s alive with energy.”

Simpson and Plotkin said the eclectic collection usually draws a one-word response from those seeing it for the first time — ‘wow.’

“Their jaws just drop,” said Plotkin, who has taken many friends and business associates through the space, which was also visited by many of those attending a pre-concert gallery opening and reception in the lobby of One Financial Plaza. The works hanging there, created by Commonwealth Honors College students, were inspired by Gustav Holt’s The Planets, which was performed that night by the Springfield Symphony Orchestra.

But while the present picture is drawing positive reviews, it is the prospects for the future that Plotkin, Simpson, and others find most intriguing. And speculation comes on many levels.

For starters, those involved with this project see the ninth-floor space as a possible site for events and fund-raising initiatives, and they speculate that it could someday be open for public visitation. They also see the strong possibility of collaborative initiatives with area schools, with the gallery and studio space providing unique learning opportunities for young people. Meanwhile, they also see it as a potential catalyst for more artists to seek to work and perhaps live downtown.

“This is where the business world and the art world intersects, and in a way that allows that revitalization thing to happen,” Plotkin said of what he believes is taking place at One Financial Plaza. “People can see this through all the things we’re doing in this building — it’s an example of what can happen.

“It’s like a test tube,” he continued. “We’ve created this environment, and people are looking at it as a microcosm of what can take place on a larger scale.”

And, on an even bigger scale, they see this collaboration as a possible springboard for creating a larger UMass Amherst presence downtown, one that might include a satellite campus, but also perhaps housing for students, which Plotkin described as a potential catalyst for further growth and new business development in the central business district.

“Everyone who’s talked about economic development has touched on the importance of creating student housing downtown,” he said. “Westfield State University has done this, and it has helped to re-energize economic development efforts in that city.”

Meanwhile, he believes that what has been created at One Financial Plaza can serve as an effective recruitment tool for UMass, as potential students see art created by others and hear how it has helped them gain confidence and resolve.

“The narrative here is that these very bright kids, many of whom didn’t know they had any artistic ability, discovered themselves,” he explained. “It’s incredible, it’s profound, and it’s enormous in its scope when you look at the quality of this work.”

 

Art of the Matter

As he looked around the ninth floor, Plotkin shook his head a few times while attempting to sum up all the possibilities.

“There is so much that can happen here — and also happen elsewhere because of this,” he explained. “As this matures, we’re hoping UMass can find the funds to have this fulfill all of its vast potential.”

Whether this will happen, and when, remain to be seen, but for now, what’s important is that the seed has been planted.

 

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

 

Another Piece of the Puzzle

By
Marriott Courtyard that will anchor Chicopee Crossing
Commercial Real Estate Sections
Chicopee Crossing Will Complement Booming Growth on Route 33

Marriott Courtyard that will anchor Chicopee Crossing

An artist’s rendering of the Marriott Courtyard that will anchor Chicopee Crossing.

At the front of a large, open plot of land on Memorial Drive in Chicopee, just south of Mass Pike exit 5, is a lone Chipotle Mexican Grill — and nothing else.
But judging by the volume of cars pulling in each day, Frank Colaccino has to be optimistic about the prospects for the rest of that open space, which he has dubbed Chicopee Crossing.
“I was surprised that Chipotle has such a following, but they do a very, very good job,” said Colaccino, president of the Colvest Group in Windsor, Conn., which is developing the site. And other restaurants and retailers should see value in joining Chipotle there, he added.
“It’s so accessible — you have access right off the Mass Pike and from Route 33, a major street with a high traffic count — and you have a lot of traffic generators around there, from a Wal-Mart to a Home Depot to Stop & Shop, Big Y, and a BJ’s Wholesale Club. That’s a lot of retail attractions, and we’re right in the middle of all those traffic generators.”
The process of developing Chicopee Crossing began in 2009, but had to clear a major hurdle first. Namely, the city had to find a way to allow northbound drivers on Memorial Drive — separated from the southbound lane by a guardrail — access to the property.
“The access was only on one side of Route 33,” Colaccino said — and with plenty of other retail and restaurant options at the next few busy intersections, none of them allowing U-turns, it was unrealistic to think northbound drivers would make the effort to reverse course for Chicopee Crossing. “To make this an attractive site for retailers, we had to put a traffic light in, and in order to do that, we had to go through the state, through Mass Highway — because it’s a state road — and get their permission.”
That process, he noted, took about 14 months, and involved input from several different agencies. “But that happened, and we’ve put in the traffic signal. It’s installed and operating.” The intersection allows not only left turns into the development, but also access from across the street, where a host of other retail ventures have sprung up over the past decade, and where an Aldi’s supermarket will be built later this year.
While the intersection issue was working its way to resolution, infrastructure for Chicopee Crossing — from water and sewer drains to electric installations and road paving — were being completed, and Colaccino expects construction work to begin in earnest early this summer, following commitments by tenants.
The one building already erected, the 7,000-square-foot structure which currently houses Chipotle, will soon have two other tenants to fill its remaining space: Great Clips, a national hair-salon chain, and a national telephone store. Three other buildings of similar size are also planned; they’re expected to be a second fast-food restaurant, a family restaurant, and a bank. Behind those will be a three-story office building and a 40,000-square-foot retail complex.
Further back will be a Marriott Courtyard hotel. That portion of the project is owned and being developed by Dennis Patel of BK-Investments.
“We’re starting to see some more activity out there,” Colaccino said regarding interest from potential tenants at Chicopee Crossing, “so we’re optimistic that something will happen soon.”

Setting Their Sites
Chicopee Mayor Michael Bissonnette said last year that the key event in bringing Chicopee Crossing to reality was a financial commitment by the state — specifically, $1.25 million through the Massachusetts Opportunity Relocations and Expansion Jobs Capital Program — to pay for the construction of the new intersection, allowing access from both sides of the Route 33 and connecting the new development with the former Casey Chevrolet (and future Aldi’s) property.
“It’s a great project, and it’s going to have the best access off the Pike of any piece of land in Western Mass.,” said Kate Brown, Chicopee’s Planning Department director. “I guess we’re hopeful, now that the economy seems to be picking up, that we’ll see more activity in that location.”
In particular, she noted, the hospitality industry was sluggish during the Great Recession, casting caution over any new hotel project, so it’s encouraging to see the Marriott Courtyard, and all the other proposed elements of the development, coming together.
As for other retailers and restaurant chains that might be feeling out the property, “I can certainly see that site as a draw because the hotel won’t have a restaurant facility,” Brown added. “So it’s kind of a captive audience.”
Any new additions would join a flood of retail and restaurant ventures that have sprung up along Memorial Drive just north and south of the Pike entrance over the past few decades.
The former Fairfield Mall property across the street was the most significant recent development; after those buildings were torn down in 2002, they were gradually replaced by a Home Depot and a Wal-Mart Supercenter. Those, in turn, anchor a plaza that now includes a Marshall’s, Staples, 99 Restaurant, Applebees, and about a dozen smaller retailers and quick-service eateries; a Friendly’s at the south edge of the site is the only survivor from the mall years.
Yet, Brown said the corridor began to pick up even before that, around 1996, with a series of smaller store openings. Since the mid-’90s, “if we had a vacant spot, we’d have a building on it quickly. It’s been pretty amazing. I wish we had more land there, actually. We were kind of skeptical that the stores located in the [Wal-Mart] shopping center would be viable, but it’s been a very stable group of businesses.”
Colvest, which has built a solid portfolio of projects in Western Mass., from several CVS locations to a new office complex on East Columbus Avenue in Springfield, has never taken on this kind of mixed-use project before, Colaccino told BusinessWest, but he’s excited about the potential for this particular site, for the very reason others mentioned — the fact that exit 5 has become a significant retail destination.
“I think this is a prime mixed-use project, with everything that’s here,” he said, adding that he has enjoyed working with Chicopee officials on bringing the development to the verge of the construction phase.
“All the people I’ve worked with in the city of Chicopee have been terrific,” he noted. “Mayor Bissonnette has been great to work with, and they have been very cooperative.
“They have a system in Chicopee,” Colaccino continued. “When a developer comes in, they get all the various departments together to talk about all the issues that might come up and all the different needs they have and what the developer has to do. They really make the process streamlined, and you don’t have to guess at everything. They just tell you, ‘these are the requirements,’ and we work together to make those things happen in a way that’s beneficial to everybody.”

Bottom Line
Nothing will happen — except for the hotel, of course — without commitments from tenants, and Colaccino expects those to be firmed up in short order so that construction can proceed this summer.
“We won’t build on spec,” he said, not even the office building. “But we envision some demand for office space there, and when that comes in, we’ll be ready. I think we’re envisioning some 22,000 to 25,000 square feet of office space, and that could be any number of uses — a doctor’s office, a dentist’s office, it could be a professional office, a mixed office with medical … any number of things.”
In any case, construction workers will be digging for drainage and other underground work very soon, and the hotel foundation will follow. After that, “we wait for the tenants,” Colaccino said, conceding that he’s anxious to see that phase move swiftly. “It doesn’t do us any good to have land just sitting there.”

Joseph Bednar can be reached at [email protected]

Momentum Building

By
Robin Sauve, owner of Barkley Logistics
Commercial Real Estate Sections
Enterprise Center Has a New Lease on Life

Dan Touhey, a partner in psi 91, which develops and distributes inflatable products for Under Armor

Dan Touhey, a partner in psi 91, which develops and distributes inflatable products for Under Armor, is one of many new tenants in the Springfield Enterprise Center.

One of the main marketing taglines for the Scibelli Enterprise Center at Springfield Technical Community College is ‘Business Building.” This explains both what the facility is — a facility housing small businesses, said Director Marla Michel — and what it does, which is to help certain clients develop, mature, and get to the next level. In recent years, the focus has been primarily on the former, she said, noting that, as the economy sagged, the emphasis was on filling space. Moving forward, the shift will be more to the latter, which has always been the primary mission.

Marla Michel acknowledged that Square One is not exactly the kind of tenant that the creators of the Scibelli Enterprise Center, a business incubator, had in mind when they opened its doors more than a dozen years ago.
The provider of early-childhood-education programs and related services is certainly not a startup (in fact, it’s one of the oldest businesses in Springfield), and it’s not a fledgling outfit looking for advice and technical support on how to get to that proverbial next level — two variations on the desired-tenant profile.
But the institution needed office and operations space after its headquarters and other facilities on Main Street were destroyed in the June 1 tornado, and the Technology Park at Springfield Technical Community College, as well as the so-called SEC, which is part of that complex, provided an attractive, accessible, and affordable option.
“So by taking seven suites in the SEC, Square One has helped forge a classic win-win scenario,” said Michel, the SEC’s director, adding that the company moves into centrally located Class A space not far from where it was before, while the enterprise center gains what she called “much-needed breathing room.”

Marla Michel

Marla Michel says Square One’s arrival at the SEC provides the facility with much-needed breathing room to conduct strategic planning.

Elaborating, Michel said the SEC, through its arrangement with Square One and other recent additions to the tenant roster, has gained a strong measure of financial stability and thus the time and opportunity to conduct some strategic planning, marketing, and other steps to attract more of the type of tenants that those aforementioned creators have in mind.
Companies like psi 91, which moved in just over a year ago.
Started by two former Spalding executives who opted to stay in the region when the corporation left Springfield for Kentucky in 2009, the venture — which takes its name from its function (inflatable products and their unit of measure, pounds per square inch) and its location, off the interstate — develops and distributes products for apparel maker Under Armor. A basketball and football were brought to the market last year, its first in operation, and a volleyball and soccer ball will follow later in 2012 (a rugby ball is also in the works).
There’s also Tickets for Groups, which, as the name suggests, serves groups of 15 or more looking for tickets for everything from Rockettes performances to the current traveling show known as “Bodies: the Exhibition,” touted as a celebration of the human form. Deb Axtell, who started the venture after working as director of group sales for Radio City Music Hall and then Disney Theatricals, and moved into the SEC in 2010, said the King Tut exhibit that was in Discovery Times Square for several months before recently returning to Egypt was a “home run” for the company, and she’s looking for the another show that will fit that description.
Another recent arrival is Barkley Logistics, a third-party logistics company owned by Robin Sauve, that arranges the transportation of shipments between two points, with palletized freight — usually much less than a truckload — comprising much of the business volume. There is a separate division, called My Luggage Valet, which will do the same thing with suitcases, golf clubs, and other items that one may not want to trust to an airline.
The most recent addition, meanwhile, is Sanitas Solutions, a technology partner focused specifically on helping individual physicians and practice groups make the transition to electronic medical records.
To attract more ventures of this type and thus secure long-term sustainability for the SEC, Michel is preparing what amounts to a new strategic plan. As part of that process, the college has hired a consultant, Jim Robbins, a noted expert on business incubators and innovation clusters, to help develop a game plan for the facility as well as implementation processes.
Summing up what Robbins has told the college thus far, Michel said he’s suggested strongly that it undertake revenue-diversification efforts, meaning more income streams — “right now, what we have is the state [through the college] and rent, which is a model that’s not sustainable,” she explained. Also, he has suggested a more regional approach to marketing, greatly increasing the number of incubator tenants, and also providing services outside the walls of the SEC to make it more of a regional resource.
“Once we take location off the table and start shoring up the services an incubator provides, that an enterprise center provides, we can potentially have a much larger economic impact,” she explained, adding that successful incubators around the country have both ‘resident’ and ‘non-resident’ programs, and the SEC will look to emulate those models.

What’s In the Cards?
Like most people in business and education (she’s in both, technically), Michel, who splits her time between the SEC and UMass Amherst, where she serves as executive director for economic development and regional partnerships, has a stack of business cards on her desk. Only, her stack is unlike almost any other.
Her cards are what she calls “three-dimensional.” They fold into small, four-sided cubes, many of which she has sculpted into a multi-level tower. Printed inside the cube are the words ‘business’ and ‘building,’ which, depending on which order they’re arranged, explains both what the SEC is and what it does, said Michel.
And moving forward, it would like to put much more emphasis on the latter half of that equation, and this explains why Square One’s move to the facility is so important.
In recent years, the SEC has suffered from high vacancy rates (near 50% at the low point) that have stemmed from several factors, but mostly the sluggish economy and a lack of aggressive marketing, said Michel. She noted that her initial focus when she arrived 20 months ago, as part of a cooperative agreement between the college and the university, was much more on filling space than the mission of incubating fledgling companies.
Indeed, not long after she took the helm, college administrators gave her the go-ahead to bring in tenants that were non-incubator-related, with the over-arching goal of lessening the financial burden imposed by the center on the college.
She’s added several companies and agencies that fit that description, one of many initiatives designed to help position the center for a stronger, more impactful future when it comes to economic development and all-important job creation.

Deb Axtell, owner of Tickets for Groups

Deb Axtell, owner of Tickets for Groups, says many SEC incubator tenants leave kicking and screaming — and she intends to do the same.

These steps include bringing more space on line, or into the ‘leaseable’ category, by taking some unused or underutilized square footage and retrofitting it for paying tenants. She’s also reduced the rates on suites, from $800 per month to $560, and created what is now known as the E-Zone, located in the former student incubator. It houses cubicles leased by budding entrepreneurs who don’t require a suite but do need some space and an Internet connection to advance their business concept.
Meanwhile, she’s also been building what she calls “business clusters” within the center. There are now three of them — Cleantech, IT, and Education, and the hope is that a growing critical mass will help attract other ventures in each category.
With these and other efforts, as well as the relocation of Square One following the tornado, Michel has built up occupancy to near capacity, with tenants falling into four categories:
• Incubator Clients, now totaling six, including psi 91, Tickets for Groups, and Barkley Logistics;
• Anchor Tenants, including the Mass. Small Business Development Center Network, SCORE, and the Small Business Administration;
• SEC Tenants, or non-incubator clients, including Square One, Alliance Medical Gas, CTC Electric, the Achievement Network, and the Veritas Preparatory Charter School; and
• STCC Tenants, or agencies related to the college, such as T.W.O., the workforce-training initiative undertaken in collaboration with Holyoke Community College, and the MassGreen Initiative, a program designed to train people for jobs in green-energy businesses.
The goal moving forward, Michel said, is to gradually increase that number of incubator tenants, but also enable the SEC to have a greater impact on economic development through both resident and non-resident programs aimed at helping ventures survive their first few years in operation and stay in business rather than failing or selling out.
“Our region is lacking services that help companies that are already in business,”she explained. “We have a fair amount of services for those who want to get into business, but when they’re in business, we have to make services more accessible that will teach companies how to grow rather than sell.”
At the moment, she focused on steps ranging from more aggressive marketing of the square footage to simply telling the stories of the people who now have a business address of 1 Federal St., Building 101.
They are all unique, but with several common denominators, including, in many cases, a need and desire to have a place to bring potential clients other than the corner Dunkin Donuts.

A Fortuitous Bounce
Such was the case with Dan Touhey, a former sales executive with Spalding (and BusinessWest 40 Under Forty winner) who opted not to relocate his family when the corporation that owned the sporting-goods maker moved it to Kentucky.
He took his career in a few directions, including a stint in business consulting and an assignment teaching management at UMass, where he met Michel. Later, after he and former Spalding colleague John Frank decided to launch psi 91 together, Touhey asked Michel if the partners could use one of the conference rooms in the SEC to meet with Under Armor executives.
“We had been meeting at Panera Bread or wherever we could grab a cup of coffee, and it just wasn’t working for us to have confidential conversations in that environment,” he told BusinessWest, adding that, to make a long story a little shorter, he and Frank inked their first contract in that conference room and shortly thereafter decided to move into the SEC. Meanwhile, Michel created a new policy whereby any pre-revenue-stage company can use the conference room at the enterprise center.
Just over a year after opening, Touhey and Frank can claim a number of success stories. For example, if one was to look really hard — and past the new (and many would say garish) uniforms worn by the University of Maryland football team last fall — he or she would notice that the team’s offensive unit uses an Under Armor pigskin.
“That’s how it works in college football — the offensive team can decide what ball it wants to use,” said Touhey, adding that several squads that wear Under Armor apparel are now using its footballs and basketballs as well.
“The beauty of our relationship with Under Armor is that we can come under the umbrella of the master brand of that company,” he explained. “And they have a very strong relationship with about 15 colleges and universities; for example, the University of Maryland is an all-Under Armor school, and it used our football last year.
“In basketball, it’s a little different; you play the ball the home team decides to use,” he continued. “If you go Auburn, Texas Tech, Towson University, LaSalle, Lamar, the University of Utah, and others, they’re playing with our basketball.”
The company has added staffing, including other former Spalding employees, and is already tight on space in its 635-square-foot facility. Touhey anticipates that psi 91 will have to move to larger quarters sometime in 2013, an eventuality he’s not looking forward to, because he likes the building, gains from the expertise of Michel and others, and enjoys sharing war stories with other entrepreneurs.
Axtell can relate. She’s not looking to move out either, although she understands that ‘graduation,’ as it’s often called, is part of the incubation process.

Robin Sauve, owner of Barkley Logistics

Robin Sauve, owner of Barkley Logistics, says one of the main benefits from being an incubator tenant is being able to learn from people who have “been there and done that.”

For now, she’s looking for the next King Tut exhibit, for which she booked a number visits to Gotham. “I could use another blockbuster,” she said, noting that field trips comprise a large part of this business, which she started on a lap-top computer in her bedroom eight years ago after tiring of the commute from Western Mass. to New York while working for Radio City Music Hall and Disney.
She eventually moved into a tiny office in East Longmeadow and quickly outgrew that. Thus commenced a search for larger and better quarters that ended at the SEC; she moved in just before Michel arrived.
She told BusinessWest that she’s now up to six employees — four in the SEC, and two who work out of their homes in New York — and is in the process of “taking a snapshot” of her business and writing a new five-year plan.
Meanwhile, Sauve is focused more on crafting a two-year plan for Barkley Logistics, which she created not long after Premiere Logistics, which she served as vice president of business administration before it lost its line of credit, then its reputation, and then most of its customers.
She bought the equipment (mostly hardware and software) used by Premiere,  and, seeking a clean break from that venture, started Barkley Logistics, which has been growing steadily since its formation, thanks in large part to support from the panel of advisors assigned to the company as part of its incubation experience.
“There’s an enormous sense of affirmation when you’ve met with people who have been there and done that,” she explained. “The people on my panel, designed to meet my specific needs, have been instrumental.
“As much as I have a general business-management background, I’m not an accountant,” she continued, noting that there is one on her panel who has been helpful with the many financial aspects of operating the venture. “The same with marketing — I’m not an advertising person, so some of the tips I’ve been given on that have been tremendous.
“Just hearing from other people who have run their own business and been through many of the same things I’m going through is a great benefit,” she went on. “It’s comforting to hear them tell me I’m on the right track, and also to know that, if I was doing something wrong, they’d be the first to let me know about it and steer me back in the right direction.”

Room for Improvement
Axtel told BusinessWest that she knows how it’s supposed to work in a business incubator.
“You’re supposed to get the support you need, spunk up, and then you’re thrown out,” she said. “I’ve heard stories that people exit here kicking and screaming, and I hope to be one of those.”
But exit she will — eventually — because, while the SEC is indeed a business building, the focus for the future will be more on what the facility does. And with that in mind, Michel intends to take full advantage of the breathing room that she’s been given.

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

Center of Attention

By
Mike Crowley, left, and Bob Schwarz
Commercial Real Estate Sections
Holyoke Project is a Study in Perseverance

Mike Crowley, left, and Bob Schwarz

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

The concept initially came together nearly a decade ago. It was a unique and ambitious plan — to combine a transportation center with adult basic education programs and a childcare facility — but it made sense on many levels. So much so, that the Holyoke Transportation Center was able to withstand myriad challenges, many of them capable of scuttling the initiative. The end result is what one of the private-equity investors calls “a one-stop shop to improve your life.”

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

The Holyoke Transportation project

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

Indeed, detailed inspections revealed serious problems ranging from asbestos in the flooring (originally thought to be concrete), removal of which added $500,000 to the pricetag, to greatly deteriorated steel under the main floor, where the weight of fire trucks and the corrosive effects of road salt took their toll.
Eventually, state funds were secured to cover some of the additional costs, imaginative solutions were found for each of the construction challenges, and the parties involved essentially drew their own map for navigating uncharted waters in the form of an unprecedented public-private collaboration to create the center.
“We were essentially paving new ground; this was the first joint-development agreement undertaken in the country under the new FTA rules and regulations,” said Bob Schwarz, executive vice president of Communications for Peter Pan Bus Lines, and an individual Crowley credited with keeping the project on the rails during the innumerable times it appeared to heading off the tracks. “So we had nothing to go on; no one had ever done this before; we were laying the road.”
And as result of all this imagination and determination, the participatinbg parties were able to cut the ribbon last fall on a facility that Picknelly says makes a great deal of sense for the community.
“It’s a one-of-a-kind concept that has received national attention,” he said. “The components come together naturally — adult basic education, transportation to take people to those programs, and a childcare center for those with children.
“This is a one-stop shop to improve your life,” he continued, referring specifically to the many programs taking place in the Picknelly Adult and Family Education Center, named for his father. “It’s a place where people can make connections that can change their life.”
For this issue, BusinessWest chronicles the Holyoke Transportation project, a triumph over adversity in many respects, and now a working model that other communities may be looking to emulate.

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

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

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

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

Timing Pattern

By
Dave Dixon
Commercial Real Estate Sections
Springfield’s Rebuilding Effort Comes at Intriguing Time for Urban Centers

Dave Dixon

Dave Dixon says there is a surge in interest in urban living, which presents huge opportunities for cities like Springfield.

As local officials, hired consulting firms, and city residents combine forces to craft a rebuilding plan for Springfield in the wake of the June 1 tornado, they do so at a time of change and opportunity for many urban centers. Officials with the firms contracted to lead efforts to blueprint a revitalization strategy say there is a rise in the popularity of urban living, a trend that could facilitate the recovery process in many ways.

Dave Dixon was understandably wary about incorporating the phrase ‘silver lining’ into any statements he made concerning the June 1 tornado and its aftermath.
But he nonetheless put it to use as he talked about the efforts to rebuild Springfield and, more specifically, the work to revitalize the downtown and South End sections of the city. And that silver lining is all about timing and emerging trends in urban centers, he explained.
“If this tornado had struck 10 years earlier, let’s say, I think this would be a much grimmer task, because we’d be rebuilding in the face of continuing disinvestment in the city,” said Dixon.
He’s the principal in charge of planning and urban design at Goody Clancy, the Boston-based architecture, planning, and preservation firm now co-leading the efforts to blueprint a rebuilding plan for Springfield with New Orleans-based Concordia (see related story, page 62).
Elaborating, Dixon said that, over the past several years, there has been a discernable upswing in the popularity of urban living. Spawned by a number of factors, including a desire among aging Baby Boomers to live in places where they can walk rather than drive to most required destinations, the trend has helped transform a number of urban centers, many with the same social and economic challenges as Springfield’s central business district and South End.
“Ten years ago, the world didn’t look like this,” said Dixon, who has seen or helped orchestrate revivals in cities ranging from Baltimore to New Orleans to Wichita, Kan. “This disaster in Springfield, like the one in New Orleans, happened at a time when cities are changing and have opportunities that they haven’t had for 40 or 50 years.
“What has gone on, particularly over the past decade, has been a profound transition in demographics, in the way real-estate markets work, in the values that the folks who bring investment with them because they attract employers, have all undergone,” he continued, adding that there are more single individuals or couples (as opposed to families) than was the case a decade ago, and income levels for such people are higher. “There are simply more people that could decide they want to live in an urban environment. They may have wanted to in the past, but it didn’t work for them. And now they’re looking to make it work.”
Indeed, the real silver lining for Springfield, said Dixon, is an apparent, and growing, pent-up demand for downtown mailing addresses. To illustrate, he took out a piece of paper and sketched a simple chart showing the rising popularity of urban living.
The line moves upward at a steady clip, he explained while drawing, but the recession of the past several years has restricted the angle of ascent because, among other factors, homeowners looking to relocate to urban centers are still having trouble selling their homes, and market-rate housing builders are still being challenged in their efforts to finance such endeavors.
Like a dam holding back water, these factors are effectively bottling up demand, he continued, adding that, when conditions improve and that figurative dam breaks, cities properly positioned to capitalize on the trend could benefit significantly.
And in many ways, the tornado has helped put Springfield in such a position, he went on, acknowledging that the city still faces a number of challenges in this regard — including crime, the perception of same, and a concentration of subsidized-housing projects in both the downtown and South End — and that progress certainly won’t occur overnight.
But the city has many of the key ingredients to join the list of other success stories, he said, listing a decent “walkability index” — more on that later — a solid existing inventory of buildings that can be converted into market-rate housing, and, thanks to the tornado, some vacant acreage on which to build such housing, as well as businesses to sustain an urban population.
Dixon acknowledged that many are skeptical that such urban living could help transform Springfield’s downtown area, but he’s seen enough evidence of the trend in other parts of the country to believe it could certainly happen here.

Walking the Walk
As he talked with BusinessWest, Ron Mallis, a senior planner with Goody Clancy, was using his iPhone to see how well several downtown Springfield addresses fared on a Web site called walkscore.com. The site essentially assesses a location based on one’s ability to walk to amenities ranging from coffee shops to entertainment venues to banks, and gives it a score from 1 to 100, with the latter being the best.
The DevelopSpringfield office at 1182 Main St. earned an 89, while the Red Rose restaurant just a few blocks south notched an 82. Those statistics are not to be discounted, said Mallis, because many constituencies, from young artists to aging Boomers to business owners, are looking at such numbers with greater interest.
“People are more health-conscious than they were years ago,” he explained. “People have woken up to the fact that walking and health have a direct correlation, and that certainly plays a part in the decisions people are making about where they want to live.
Dixon agreed. “If you look at surveys about how much people want to drive, it used to be that, the younger you were, the more you liked getting in the car and driving; now it’s the reverse, and some of it is health-driven; it’s viewed as unhealthy to be in a car a lot.”
But there’s more to this trend than exercise, he continued, adding that many individuals within different age groups, when queried about what they want from a residential address, put that intangible ‘community’ high on their list. “And people think of urban areas as offering much more opportunity for community — to run into each other and meet each other.
“When you look at the top-10 criteria that people listed for where they wanted to live, from the ’60s up until probably 2003, or at least through the ’90s, it was golf courses, near golf courses, on a golf course, and as far away from work as possible,” he went on. “None of those are on the list in 2011. Surveys now show it’s proximity to Main Street, diversity, the ability to walk to work … and even telecommuters are much more interested in living in denser, walkable areas, perhaps because they spend the day by themselves.”
Dixon and Mallis have seen such trends emerge as they’ve helped Goody Clancy compile an extensive portfolio of work in older urban areas. The firm has taken part in a number of downtown projects, from guiding 12 million square feet of mixed-use development around the Massachusetts Institute of Technology to revitalization plans for communities as such as Baltimore, Akron, Ohio, Jamestown, N.Y., and, locally, Greenfield.
To illustrate his point on urban living and add a measure of credibility to the argument, Dixon pointed to Wichita, a city of about 900,000 and a downtown still fighting its way back from decades of disinvestment and an out-migration of people and businesses.
“Even the lawyers moved out of the downtown, which is unusual,” he said. “Compared to many parts of downtown Wichita, Springfield’s South End would look cool — it would look like an arts district. But downtown is beginning to take off; there are several hundred units of new, cool lofts — they’re rentals right now because the condo market isn’t there yet; one was rented out before it was finished, and another, more expensive building is almost rented out.
“Meanwhile, there’s another, more conventional project with larger, more expensive units that’s just sitting there because that’s not what the market’s going to come back to,” he went on. “The market’s about cool, urban, walkable living spaces. It’s more about living near a cool bakery than it is about giving a view.”
In Springfield, the firm has been assigned the task of coordinating efforts to develop strategic initiatives focused on the downtown and South End, one of three areas, or districts, of concentration involving neighborhoods impacted by the tornado. Since being hired in September, the firm’s representatives have undertaken a general inventory of this sector’s assets and liabilities, said Dixon, adding that there are more of the former than many people might think, and some could help the city take advantage of the pendulum moving back toward urban living.
And in many ways, the city is already making some strides, said Mallis, noting efforts to attract artists to the Morgan Square apartment complex (see BusinessWest, Aug. 29), and other initiatives to create more market-rate housing at several downtown-area properties.
As for the South End, Dixon said it has the potential to be “a hip place,” given its diversity, solid walk scores, proximity to many restaurants and cultural attractions, and decent inventory of properties that could, with some imagination, entrepreneurial flair, and requisite demand, be retrofitted into housing units.
As he walked with BusinessWest down Main Street, Dixon pointed out several such buildings near an already-thriving market-rate complex, the Willows, created from the former Milton Bradley manufacturing complex off Union Street. He gestured to everything from office and retail properties with large vacancy rates to abandoned or underutilized manufacturing and warehouse structures.
“You can just look at those properties and see that, if the market is there a half-block away,” he said, “it can be at those sites as well.”
There are also several currently vacant parcels, including the former Gemini site and some others created by the tornado, which provide opportunities for developers with vision.
Beyond vacant lots, though, the tornado has provided a spark for the city, said Dixon, when pressed about why market-rate housing and related developments haven’t happened sooner.
“As horrible and painful as the tornado has been for many people,” he said, “it has sort of galvanized the moment; it has the community focused, the city focused, everybody focused on how to rebuild better.”

Building Momentum
This combination of focus and determination has arrived at the intersection of rising interest in urban living and pent-up demand. It’s an intriguing situation that could make Springfield’s downtown the right place at the right time.
“Put all these things together, and Springfield, like many cities, has opportunities that it hasn’t had for a very long time,” said Dixon. “They don’t happen automatically, though. Cities have all these problems — fragmented land ownership, zoning, tax structures — which are not necessarily geared to the kind of development you want, and crime and the perception of crime.
“But there are lot of cities that have been very patient over the past 10 years, looking at what’s happening, removing the obstacles, investing in downtowns, and getting tremendous payoffs. Springfield has that opportunity; something like the tornado is a kind of wakeup call that it’s not just time to change, but to take stock. And when you take stock, you can take advantage of these opportunities.”
In other words, this could a silver lining that makes Springfield a shining example of how urban centers can be revitalized.

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

Involvement, Strong Leadership Called Keys to Rebuilding Effort

Bobbie Hill

Bobbie Hill says plans and process are important, but involvement and leadership are the keys to revitalizing a city.

Bobbie Hill was asked about process, plans, and potential projects.
And she said there will be all three when it comes to the task of rebuilding Springfield in the wake of the June 1 tornado. However, none will be the real key to a successful effort.
Instead, the most vital component — and she says she’s learned this from considerable experience — is getting the residents of the community in question to take a real ownership stake in the recovery initiatives.
“It’s the relationship-building, the community-capacity-building, the taking-ownership piece,” said Hill, a consultant with the New Orleans-based planning and architecture firm Concordia, which is heading the team of companies coordinating Springfield’s rebuilding-plan process. “Those are the keys; it’s ownership, and holding yourself, your neighbors, elected officials, and developers accountable to doing it and doing it right.
“That engagement component, that people component, is as important if not more important than individual concepts,” she continued. “This can’t just be about development projects; that’s not what transforms a community.”
What does, she stressed again, is a willingness on the part of residents to get involved and stay involved, and not give in to the theory, or temptation, that government will take care of things. And it comes through leadership, she went on, noting that, in most every community where the 11-person firm has lent its disaster-response, planning, and design expertise, leaders from the community have emerged.
The process of getting the community involved in the rebuilding effort began earlier this month with neighborhood meetings in the three identified sectors involving areas of the city damaged by the tornado. Sector 1 is the metro center (downtown) and the South End, while Sector 2 is composed of Six Corners, Upper Hill, Old Hill, and Forest Park, and Sector 3 includes Sixteen Acres and East Forest Park.
Those neighborhood meetings were followed up with a city-wide gathering a few days later, and two more sessions of neighborhood meetings and another city-wide session are scheduled for November and December, said Hill, adding that the four firms collaborating on the endeavor will present an implementation and financing plan to a community congress on Jan. 5.
That’s the process, in simple terms, she said, adding that it’s too early to discuss specific potential redevelopment projects, although plenty of suggestions — from a supermarket to market-rate housing projects to reforestation proposals — have come forth at the neighborhood sessions.
In subsequent neighborhood meetings, the suggestions will be discussed at greater length, and eventually priorities will be established, and consultants will “put numbers” to potential recommendations in an effort to determine which ones make sense and which ones don’t.
More importantly, though, the initial sessions have yielded evidence of the requisite level of involvement, leadership, and community spirit that will be necessary for a successful recovery effort.
“I was really encouraged by what I saw and heard the other night,” she referring to the neighborhood meeting in Sector 2. “There was definitely a strong sense of community, people really caring for other and celebrating diversity — that really came across.”
There are four firms involved in the process of coordinating the neighborhood meetings and compiling the report to be completed Jan. 5. They are:

• Corcordia, which, among other projects in its portfolio, led coordination for the Unified New Orleans Plan after Hurricane Katrina that included selection and management of 12 national, regional, and local planning firms that created plans for 14 planning districts and an overall city-wide recovery plan;

• Goody Clancy, a Boston-based urban planning and design firm that has coordinated revitalization efforts in a number of major cities (see related story, page 60);

• Berkebile Nelson Immenschuh McDowell Inc. (BNIM), considered the most experienced firm in the country when it comes to helping tornado-impacted communities engage in a transformative recovery planning process; and

• The Project for Public Spaces (PPS), a nonprofit planning, design, and educational organization dedicated to helping people create and sustain public places that build stronger communities.
For more information on the process or to submit ideas online, visit www.rebuildspringfield.com. The schedule for future neighborhood and citywide meetings is as follows:

• Six Corners, Upper Hill, Old Hill, and Forest Park: Nov. 15, 6:30 to 9 p.m. at the J.C. Williams Center, Florence Street;

• Sixteen Acres, East Forest Park: Nov. 16, 6:30 to 9 p.m. at the Holy Cross gymnasium, Plumtree Road;

• Metro Center, South End: Nov. 17, 6:30 to 9 p.m. at the Gentile Apartments Community Room, Williams Street;

• Metro Center, South End: Dec. 6, 6:30 to 9 p.m. at the Gentile Apartments Community Room, Williams Street;

• Sixteen Acres, East Forest Park: Dec. 7, 6:30 to 9 p.m. at the Holy Cross gymnasium, Plumtree Road;

• Six Corners, Upper Hill, Old Hill, and Forest Park: Dec. 8, 6:30 to 9 p.m. at the J.C. Williams Center, Florence Street;

• City-wide: Dec. 10, 8:30 to 11:30 a.m. at the MassMutual Center; and

• Community Congress: Jan. 5, 6:30 to 9 p.m. at the MassMutual Center.

— George O’Brien

The Court is Now in Session

By
Commercial Real Estate Sections
Historic Building Has a New Lease on Life

Opal Real Estate Group and city officials want to turn a neglected space into a vibrant, mixed-use facility.

For the partners at Opal Real Estate Group, the historic block in Springfield known as Court Square is more than just another real-estate redevelopment opportunity. Before the passage of years, they say the building and its surroundings were one of the most vibrant developments in the city. The Springfield Redevelopment Authority, which owns the site, is hopeful that the players, funding, and vision are in place to return Court Square to that status once again.

Hanging on the wall behind Demetrios Panteleakis’ desk is a large painting of 31 Elm St. in Springfield, a building that most know simply as Court Square.
This historic block across from City Hall and Symphony Hall has remained vacant for decades. While the city has been diligent in keeping the property secure, time and nature have taken their toll on the elegant structure. Two other smaller buildings, Byer’s Block and the brownstone on the corner of Elm and Main known as the Chicopee Bank Building, are also part of a larger project that in recent months has city officials excited for the future of Springfield’s center.
Panteleakis is the managing partner of Opal Real Estate Group, the preferred developer for the site. The company, owned by Peter Picknelly, was one of the finalists back in 2008 to redevelop the property, but lost the bid to Connelly and Partners from Boston.
However, when that developer’s plans fell through, only a couple months old and a fast and furious victim of the economy, Opal was asked if it would like a second chance at bat.
The property is owned by the Springfield Redevelopment Authority (SRA), and in June of this year, Opal was named the preferred developer at Court Square. It was granted 120 days to come up with plans for funding and redevelopment, by all accounts a comprehensive and laborious process which examines every system of the structures, their history, and their potential future.
It’s an interesting moment of happenstance how Panteleakis came upon that painting, by the same artist responsible for the murals in the elevator lobbies of the very same building. Because, in many ways, the chance encounter with that work of art in an antique store is a metaphor for the larger forces now underway in the revitalization of the property. It’s a story of the right people in the right place at the right time.
Recently, BusinessWest had a chance to sit down with both Panteleakis and Brian Connors, the city’s point person for the property from the Office of Planning and Economic Development. The story they told is not one that has an easy answer. As Connors said, “if this project were a simple fix, it would have been done long ago.”
The difference this time is that, for Picknelly and his partners at Opal, the building is more than just another real-estate redevelopment opportunity. “Court Square was once the most vibrant part of the city,” Picknelly told BusinessWest. “Today, this is the best of New England — the grandeur of the historic buildings married to the modern structures nearby. Springfield is our home, and this building is at its core. In order for our city to be revitalized, this building can’t be abandoned.
“I believe, if done correctly, Court Square can be an important part of our city’s future,” he added. “Springfield simply cannot completely rebuild itself with this grand building left vacant.”

Center of Attention
Connors called the location “one of the most significant civic spaces in the entire Commonwealth,” and of the Court Square buildings themselves he simply said, “buildings that look like this just aren’t built anymore.”
The SRA also owns Union Station just a few blocks away, and he called both these sites key properties for Springfield’s future. Opal had been committed to the Court Square project for months before their preferred status, he said, and meets with city officials on a weekly basis to hammer out the ongoing issues that arise with a project of this scope.
“You don’t just hand over the keys and start construction,” he said. “It’s really a lot of due-diligence work. Opal, meanwhile, is getting all their applications in, their historic tax credits, their financing. We’re very excited to have a private partner advancing this as quickly as they can, with the best of all their expertise. They know Springfield, and they’ve worked on historic redevelopment.”
Patting his hand on a ream of Opal’s paperwork, only a fraction of the documents and reports that will chart the project’s course, Connors added, “this is already making far more progress than ever before.”
But he acknowledged the hard work ahead for both his office and the people at Opal. Between environmental and structural assessments, neither of which is tossing any unforeseen obstacles, and the funding sources, all parties involved will be kept busy before a hammer or shovel hits the site.
Funding is a crucial piece of the puzzle. “A project like this requires every sort of alphabet soup of incentives that are possible — federal, historic, and state tax credits,” he said. “And these are all competitive funds, so those applications are going in now. In a financial environment like there is today, funding is difficult. Banks aren’t loose with their money. City governments don’t have a lot of money.”

Family Ties
Although Connors said that Opal’s preferred 120 days ends in November, if the SRA board is satisfied by the developer’s efforts, the agreement will be extended.
“I can say from our experience, on a staff level we’re working with Opal on a weekly basis, and we’re very satisfied with the progress that’s been made,” he added.
Right now, Panteleakis said, the biggest obstacle his office faces is time.
“We’re in a race to take all the knowledge we’ve accumulated and verify it,” he said. “Because there’s been an RFP for the last ten years, there’s been a lot of study on the building. But for our grant purposes we need to go back and reassess all of it — mechanical, electrical, environmental.”
Opal is no stranger to historic redevelopment; currently it is at work on an historic property in the center of Westfield destined to be student housing for the state university there. At Court Square, Panteleakis said that a careful look at the past success of the buildings can indeed map out a bit of their future.
“You have to look at it less than conceptually,” he said, “and realize that, 25 to 30 years ago, this building had a viable commercial population. And that has a lot to do with location, location, location.”
The plans as they exist now aren’t to reinvent the uses of the building. Although the top floor is presently envisioned as market-rate housing, with apartments of up to four bedrooms, the first floor will remain retail- or service-oriented, with amenities that would cater to a residential or professional population that lives and works in the area. Middle floors are to be mixed commercial use, and there has been great interest in that space, both Panteleakis and Connors said.
Panteleakis, in fact, said the response has been “tremendous.”
“The development process that takes place in a building this size clearly has a point before hammers start to swing where you get a minimum level of commitment in order to have an economically viable project,” he explained. “We are in those conversations now, and we’re trying to firm up some of those commitments by January.”
Responding to criticism of what some may perceive as a surfeit of vacant office space in the city, Panteleakis waved off the possibility to naysay. “There’s a larger philosophical issue that needs to be examined. Anyone can say, ‘there’s too much office and retail space already,’ but it’s the quality of the product that brings people to the downtown. The bottom line is that, when you improve the quality of the product and create competition in that product, it forces everyone to get better.”
Here, he credited the redevelopments that the Dennis Group has made downtown, and how they raised the bar for those sections of Springfield where their historic buildings have been renovated.
Like Picknelly, Panteleakis said that Court Square resonates in his own remembrance of Springfield’s history. And that connection to the past is an important aspect to rebuilding for the future.
“If you have any commitment at all to the city of Springfield, or if you’ve been in the real-estate business and owned property in Springfield,” he said, “you’d know how important this location is. To come to what is probably the most architecturally significant building in the heart of the city, and to see it in disrepair, it makes an immediate statement to visitors to the city, and that has to be reversed.”
This is the type of project that comes along once in one’s career, he said.
“This is Springfield’s legacy,” he went on. “If buildings like this aren’t preserved, future generations are only going to see them in photographs.”
Pointing to the painting over his head, he added, “this is one that will be saved.”

Activating the Downtown

By
The lobby at 1550 Main
Commercial Real Estate Sections
Arts Initiative Strives to Breathe New Life into Springfield’s Central Business District

Evan Plotkin and Annie Waters

Evan Plotkin and Annie Waters in the soon to be “activated” courtyard at Morgan Square. At top, one of Waters’ sketches of what the rejuvenated block would look like.

Evan Plotkin is a firm believer in the power of the arts as an economic driver. He says he’s utilized the creative economy to improve the ‘quality of life and experience’ for the tenants in two downtown office buildings — One Financial Plaza and 1550 Main — and now he’s planning to take his so-called “downtown revitalization through the arts” initiative to another dimension with ambitious plans for the Morgan Square area. As with those other properties, his plan is to take dormant or underutilized facilities, and “activate” them.

Evan Plotkin needed both hands as he gestured to various components of the spacious courtyard within the Morgan Square apartment complex in downtown Springfield — the ornate clock, the large shade trees, the walkway to the back door of the deli that’s been closed for nearly a decade, and an alleyway that would connect the courtyard with Main Street, except the gate at the front is always locked.
“It’s a beautiful area, but very underutilized,” said Plotkin, president of Springfield-based NAI Plotkin, which recently won a contract to manage the property. “It’s asleep … and we need to wake it up.”
He would use similar language as he discussed other aspects of the massive Morgan Square/Armory Commons complex — including a host of vacant storefronts, another courtyard behind a building along Taylor Street, and a traditionally large inventory of vacant residential space — and other properties in that section of downtown.
The word he used most often, and pointedly so, as he talked about various properties and assets was “activate.”
That’s what he intends to do through the expansion of an ambitious project he calls the “downtown revitalization through the arts” initiative, which, as that name suggests, attempts to use the arts as an economic driver to change the look and feel of that part of Springfield. There are many moving parts, but the concept is fairly simple — to incentivize artists to live and work in that area, and to provide them with vehicles for showcasing — and selling — their work.
Plotkin is quite optimistic about the prospects for the Morgan Square property, which would be rebranded as the “Art Space at Morgan Square,” because he’s already conducted a good amount of ‘activation’ in other buildings managed by NAI Plotkin, and with considerable success in his estimation.
He pointed to 1350 Main St., the office tower also known as One Financial Plaza, as an example. There, a long-dormant fountain has been restored, a café has been opened on the ground floor, the lobby’s walls have become artists’ galleries, and a small patio area has become a venue for performing artists. These changes and added amenities have no doubt contributed to a higher occupancy rate and success in turning on the lights within several previously dark floors, said Plotkin.

The lobby at 1550 Main

The lobby at 1550 Main, rebranded as the 1550 Gallery, is one of many locations downtown, where artists can now display their work.

Similar activation has occurred at 1550 Main St., the former federal building now occupied by the Springfield School Department, Baystate Health, and other tenants. Outdoor performances, art in the lobby (now branded as the 1550 Gallery) and imaginative landscaping have helped improve quality of life for tenants while bringing vibrancy to a location that for years had been cordoned off by Jersey barriers following the Oklahoma City bombing.
The Morgan Square project represents the latest and most comprehensive activation effort to date, said Plotkin. Based on models created in Pittsfield, North Adams, Washington, D.C., and other communities, the arts initiative calls for attracting artists to the vacant retail spaces in Morgan Square through reduced or forgiven rent, and using downtown office buildings, such as 1550 Main, One Financial Plaza, and others, as well as perhaps the downtown hotels, as galleries to showcase the art.
The broad objective is to use the arts to create energy in the downtown and make it a true destination, said Plotkin, who has spent the past several years advancing his theory that the creative economy is one of the keys — and perhaps the key to revitalizing Springfield’s central business district.
“This is the culmination of a lot of thinking, a lot of thought about the creative economy,” he said. “It’s a chance to really make something happen in the city; I almost look at this as the great Springfield experiment.”

Works in Progress
Plotkin told BusinessWest that the arts initiative amounts to a manifestation of a philosophy that defines the Plotkin company’s approach to property management.
“While most management companies can perform the perfunctory physical aspects of managing the property, our approach also focuses on improving the quality of life and experience for the individuals who live and work downtown,” he explained. “This is achieved in part by programming events, and improving downtown parks, neighborhoods, and other public places.”
The Morgan Square initiative contains all these elements, said Annie Waters, a Smith College student, artist (some of her work is currently hanging in the lobbies at 1550 Main), and summer intern at Plotkin who nonetheless has her own business card, complete with the title “chief imagination officer.”
Waters has been involved in many arts-related projects over the past few months, including a proposal to use scrap metal from Springfield junkyards to create industrial- history-themed sculptures — depicting the Duryea brothers’ car, the monkey wrench, and other Springfield firsts — that would be displayed at 1350 and 1550 Main St.
But most of her time has been spent blueprinting a plan of action for Morgan Square, an initiative aimed at removing those ‘Now Leasing’ signs from storefronts (some of which have been in the windows for years) and otherwise activating dormant or underutilized properties.
The broad goals are to inspire more artists to live and work in the complex, she explained, adding that the endeavor is modeled after a number of successful programs, such as Mather Studios in the Penn neighborhood of Washington, D.C. The 10-floor building has 50 loft-style condos occupied exclusively by artists, and it has become a destination, not simply a mailing address.
Moving past images from D.C., North Adams, and Pittsfield on a Powerpoint presentation she’s shown to many in the area, Waters stopped at images of the vacant storefronts in Morgan Square. Outlining the plans for the complex, she and Plotkin said these commercial spaces will be offered at reduced rents to qualified artists.
There will be a lottery of sorts, said Plotkin, noting that applicants must complete a questionnaire and impress those reviewing them with answers to such questions as ‘how do you plan to utilize the studio and gallery space if accepted?’ and ‘how do you plan to actively participate and contribute to the creative economy at Morgan Square?’
Other components of the initiative call for development of a restaurant/coffee shop (probably on the site of the former deli) and reactivation of that aforementioned courtyard through outdoor seating for the restaurant, decorative lighting, sculpture, art, and music.
In addition, the apartments would be marketed to teachers who work in the city’s public schools and Baystate employees working at 1550 Main. “The goal is to develop market-rate apartments that will attract talented professionals to housing in downtown Springfield,” he said. “The new workforce and talent pool will eventually attract site selectors and new businesses downtown.”
Still another component is to create gallery space in the downtown’s office buildings and perhaps its hotels, said Plotkin, adding that the overarching goal is help artists and their ventures become more economically viable.
“What we’re trying to do is offer artists living space, studio space, and gallery space,” he said. “They need all three to be successful.”
Plotkin told BusinessWest that he’s optimistic about the plans for Morgan Square, and this positive outlook is fueled by what has transpired at 1350 and 1550 Main St., but also by other developments currently unfolding or on the drawing board.
These include the ambitious development projects launched by the New England Farmworkers Council and its president, Heriberto Flores — the expanded portfolio now includes the Hippodrome and the Bowles Building (home to the Fort restaurant), across Main Street from Morgan Square — and the planned redevelopment of Union Station, which can be seen out the windows of some of the apartments.
“If I was a single person and an artist, I couldn’t think of a cooler place to do my work,” he said, expressing the hope that others will be saying such things in the not-too-distant future.

Brush with Fame
Time will tell how Plotkin’s great Springfield experiment, or at least the Art Space at Morgan Square component, shapes out.
But he believes that in time, and probably not much of it, the project will become a poignant symbol of how the creative arts have helped revitalize the downtown area.
Always the optimist, Plotkin said there is already plenty of evidence that the arts can improve the experience of working and living downtown, and he’s energized by the prospects of creating more.
“This is a very exciting project for Springfield that could really change the feel of this area,” he said, while standing in the Morgan Square courtyard. “All we have to do is activate the many assets we have.”

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

What’s in Store for the Westinghouse Site?

By
WestinghouseDPart
Commercial Real Estate Sections
O’Connell Development Envisions Mix of Uses for Sprawling Complex

WestinghouseDPartThe former Westinghouse Electronics complex in East Springfield was slated for redevelopment into a large retail Mall, with perhaps two dozen stores, but then the recession sent that sector into a deep tailspin and eventually scuttled those plans. The O’Connell Development Group, creator of Holyoke Crossing in Holyoke, among other area retail complexes, acquired the property last fall, and is advancing plans for a mixed-use facility — although there is uncertainty about what that mix might entail.

As he talked about the sprawling former Westinghouse Electric manufacturing complex off Page Boulevard in East Springfield, and the prospects for redeveloping it, Andrew Crystal drew a number of comparisons to another project orchestrated by the Holyoke-based O’Connell Development Group, which he serves as vice president.
That would be the transformation of the former H.B. Smith boiler plant in the center of Westfield into a massive Stop & Shop supermarket and accompanying parking lot.
“That was a large industrial site that was demolished, cleaned up environmentally, and then turned into a retail location,” said Crystal, adding that this is the plan for the Westinghouse site, located just off I-291, as well. Actually, it’s been the plan for some time, and the fact that the 40 or so acres in question are still home to several buildings in the process of being razed points up a big difference between this initiative and the one in Westfield.
The H.B. Smith project unfolded in 1997, when the economy was humming and most major retailers were in an aggressive expansion mode. A planned transformation of the Westinghouse site into a $45 million retail complex with a mix of stores, undertaken by Newton-based Packard Development, was put on the drawing board more than three years ago, or just before the start of the worst recession in 80 years.
That downturn prompted the closing of thousands of retail establishments across the country and back-burnered a number of projects like the Westinghouse endeavor, said Crystal, adding that, while the retail sector is still reeling from the downturn in many respects, that segment of the economy is expected to eventually recover. Meanwhile, the Westinghouse complex has that most precious of real-estate qualities — location.
These factors and others prompted O’Connell Development, one of the O’Connell companies, to acquire the complex for $4.2 million last November and quickly commence with the process of razing the many buildings and cleaning up environmental contamination.

promising possibility for the site

Andrew Crystal says retail is one promising possibility for the site, although the sector isn’t as healthy as it once was.

“We think the site has a lot of potential, and clearly some of that is for retail uses,” he said, “because it is within a fairly dense residential area and has such easy and immediate access to 291. That access accounts for much of the site’s appeal, but there’s also the visibility from the highway.”
For this issue, BusinessWest takes an indepth look at the prospects for the Westinghouse property, identified as one of the key economic-development priorities in the City of Homes and a big piece of the ongoing revitalization puzzle.

Back to the Future
In its heydey during World War II, the Westinghouse Electric complex, opened in 1915, employed as many as 7,000 people in the manufacture of white goods and other products. The plant was part of a large industrial corridor where Rolls-Royces were once assembled and Smith & Wesson later became a huge part of the landscape.
The Westinghouse operation eventually wound down in 1970, and since then the cluster of buildings has become home to a number of warehousing and distribution tenants, said Crystal, adding that the site has long been considered an attractive location for a retail center, given its size and location only a few hundred yards from the East Springfield exit off I-291.
And in early 2008, Packard Development, a subsidiary of New England Development, which has developed a slew of retail centers across the Northeast, including several in Eastern Mass., put plans on the table for such a center, one that would be home to perhaps two dozen stores and a total of 450,000 square feet of retail. Formal plans were submitted, an environmental impact report was filed with the state (addressing, among other things, traffic issues), and the company met several times with neighborhood residents to hear and address their concerns.
All systems appeared go, but then … the recession hit, and the East Springfield project, like many planned retail developments, was first delayed and then scrapped.
“New England Development is a good firm, and they had a pretty aggressive development plan — they just got caught by the recession,” said Crystal. “It was a time when even the big national retailers were pulling back, and some didn’t make it through the recession; there were many casualties.”
But O’Connell saw enough potential in the property to make that $4 million roll of the dice last fall, said Crystal, adding that he considers this property to be a gamble well worth taking, considering the site’s size, location, and potential for a number of possible uses.
Crystal told BusinessWest that demolition will likely be concluded by the end of this year, clearing the way for what he calls mixed-use development, “although, at this point, we’re just not sure what that mix of uses is or would be.”
The property is zoned commercial, he continued, adding that this designation doesn’t permit some specific uses, such as a large distribution center, but does allow almost all others.
Retail is certainly at or near the top in terms of preferred uses, he said, adding that there is a recognized need for more retail in that part of the region, and dense population centers within a few miles of the site that could be attractive to major players in the industry.
But retail is still in a relative holding pattern overall as a sluggish recovery from the downturn continues, and Crystal acknowledged that many questions remain about when and to what degree the sector will bounce back.
“Retail is doing better than it was a year or two ago, certainly,” he said, “but it’s not like it was five years ago, and it likely never will be again. There are fewer national retail tenants now — the bankruptcy filings provide ample evidence of that — and the sector is still making its way back. Things are better, and consumer confidence has improved tremendously, but it’s certainly not like it was.”
The O’Connell Development Group has extensive experience in retail development, with several such projects in its portfolio, including the Westfield Stop & Shop initiative; Holyoke Crossing, its best-known retail effort, and one that has certainly felt the impact of the downturn; the Bernie’s store across Whiting Farms Road from Holyoke Crossing; and several CVS locations across the region.
Meanwhile, the company continues its work to redevelop the former Atlas Copco property just a few blocks from Holyoke Crossing and the Holyoke Mall into a retail facility; it is currently being used for distribution.
But there are several other potential uses for the Westinghouse site, said Crystal, listing everything from office space to health care services; from entertainment venues to a satellite post office. All are permissible uses under the zoning, and all are viable alternatives given the location just off the highway.
In the meantime, O’Connell is working to lease out space in the Westinghouse office facility fronting Page Boulevard, which is not slated for demolition at this time. Approximately 30,000 square feet across two floors is leaseable, said Crystal, adding that the company is still gauging demand for that space while deciding its ultimate future.
Marketing of the site will commence once O’Connell has a firmer grasp of just what it wants to do with the location and what the market will bear, said Crystal, adding that the site simply has too much going for it to remain dormant for long.
“You just don’t find close to 40 acres in an urban environment like this,” he said, “that has such close proximity to the highway and such high visibility from the highway.”

The Bottom Line
The H.B. Smith project succeeded in changing the look and feel of downtown Westfield. It removed a decaying, contaminated factory complex and brought retail — and some vibrancy — to the downtown.
Whether history will repeat itself in East Springfield remains to seen, but Crystal is optimistic that another location known mostly for what transpired in the past will have a different, and quite compelling, future.

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

Make the Most of Rental Real-estate Losses

By
Carolyn Bourgoin
Commercial Real Estate Sections
Know the Rules to Avoid Any Unintended Consequences

Carolyn Bourgoin

Carolyn Bourgoin


Maximizing one’s current tax deduction for rental real-estate losses requires planning and an awareness of the maze of rules that must be considered in order to avoid any unintended consequences. Focusing on some of the more overlooked areas will help taxpayers to avoid some of the potential pitfalls in the passive loss rules.
The passive-activity-loss rules were enacted in 1986 as a means of discouraging taxpayers from investing in activities whose primary purpose was to generate losses to offset various sources of income. The PAL rules prohibit offsetting passive losses with income from non-passive activities, such as salary, professional fees, interest, dividends, or income from a business in which the taxpayer materially participates. As a result, losses from passive activities can only be used to offset income from other passive activities. If there is an excess of passive losses over passive income in any tax year, the excess loss is suspended and carried forward indefinitely, until passive income is generated or the property is sold.
One way taxpayers have tried to generate passive income in order to utilize passive losses is by leasing their personally owned commercial property to a related business. Under the passive-loss rules, it would seem that any net rental income generated by this arrangement would be classified as passive income. However, if the taxpayer materially participates in the trade or business to which the commercial building is being rented, then a set of rules known as the self-rental rules will cause the rental income to be recharacterized as non-passive.
The self-rental rule holds that an otherwise-passive rental activity will be treated as non-passive if the activity generates net income and the taxpayer rents that property to a trade or business in which the taxpayer materially participates. A taxpayer is considered to materially participate in an activity if he or she is involved in the activity on a regular, continuous, and substantial basis. This is determined when a taxpayer’s involvement falls under one of seven tests defined in the IRS regulations.
Though net rental income from such an arrangement is recharacterized as non-passive income, a loss from such a related-party leasing activity would not be subject to the self-rental rule and would be considered passive.
Due to the inconsistent results of the self-rental rule, its validity has been challenged by taxpayers in the courts. However, the courts have upheld the self-rental rules, and so taxpayers must plan accordingly taking these rules into account.
Actively participating in a rental real-estate activity may allow taxpayers to deduct a loss of up to $25,000 against non-passive income. A taxpayer will be considered actively participating if he or she makes key management decisions, such as deciding on rental terms, approving new tenants, or approving capital expenditures. The term ‘active participation’ does not require regular, continuous, and substantial involvement.
Additional requirements to qualify for the $25,000 loss allowance include owning at least 10% of the rental property (can aggregate ownership with spouse) and having AGI that doesn’t exceed specified levels.
Taxpayers may want to consider selling an activity that continually generates passive losses. Disposition of an entire interest in a passive activity in a fully taxable transaction will permit the taxpayer to deduct any suspended losses from the activity.  Where the disposition is by gift, however, a different set of rules applies. First, the donor loses the benefit of the suspended losses; second, the tax basis of the transferred property is increased by the amount of any PALs allocated to such interest. In the case of a partnership interest that has been gifted, a donee must increase his outside basis by an amount equal to the donor’s suspended PALs. Thus, the transfer of an interest in a passive activity by gift does not allow the donor to take a deduction for any suspended losses associated with the property.
Qualifying as a real-estate professional is another option that should be explored. If a taxpayer qualifies as a real-estate professional, rental real-estate interests are not automatically treated as passive activities. This testing is done annually. The following requirements must be met in order to qualify as a real estate professional:
• More than one-half of the personal services performed by the taxpayer in trades or businesses during the tax year are performed in real property trades or businesses in which the taxpayer materially participates; and
• The taxpayer performs more than 750 hours of services during the tax year in real property trades or businesses in which the taxpayer materially participates.
A taxpayer does not have to work full-time in real estate to qualify as a real-estate professional. However, a taxpayer must be able to establish by any reasonable means, such as calendars, appointment books, etc., that he materially participates in the operation of a rental real-estate property in order to treat that property as non-passive. Each rental real-estate interest is treated as a separate activity for purposes of the material participation testing unless an election is made to group interests.
This article provides a few considerations for planning how to maximize passive loss deductions from rental real estate. As always, you should consult your tax advisor or legal advisor regarding applying this general information to your specific situation.

Carolyn Bourgoin is a senior manager in the Tax Division of Meyers Brothers Kalicka, P.C., a public accounting firm in Holyoke; (413) 536-8510.

Beyond the Fine Print

By
Stephen Shatz
Commercial Real Estate Sections
Tenants Must Beware of the Hidden Costs Often Found in Leases

Stephen Shatz

Stephen Shatz

In this day of concern about operating costs, tenants should be wary of hidden expenses in leases.
Basic rent is not the only cost. In fact, the items often labeled as “additional rent” may approach, if not exceed, basic lease payments.
Additional rent expenses such as real estate taxes, special district taxes, insurance, and other operating expenses are often charged and apportioned based on a tenant’s proportionate share of the square footage of a building. There are several items of concern with additional rent. Here are some that all business owners should be aware of, and they are often in the form of questions that must be answered:

• How is proportionate share calculated? If based on square footage, what system has been used (BOMA or other standard)? Has the space in fact been measured? Tenants should attempt to have the space measured or reserve the right to do so, and if there is a variance of say 3% of the lease square footage, the landlord should pay for the measurement, and, of course, the payments should be adjusted.
Also, are these costs to be calculated as an increase above an agreed base year and, if so, is it a calendar year or a tax fiscal year?
• Are “operating expenses” clearly defined in the lease? Are they for services provided by unrelated third parties? Not infrequently, these services are provided by a related company at costs that exceed market rates. Do operating expenses include depreciation or replacement of capital elements of the property? If they do, these costs might easily exceed basic rent.
What is of further concern is that the lease may say the landlord is responsible for capital repairs, but yet the additional rent provisions will attempt to pass on these costs to the tenant.  Furthermore, tenants should reserve the right to audit all operating expenses, and again, if there is a 3% or more variance, the cost of the audit should be paid by landlord, and, of course, the payments should be adjusted.
• Tenants need to be careful in negotiating maintenance, repair, and replacement obligations. The elements of the leased premises that the tenant is required to maintain need to be carefully detailed. Avoid provisions that say the “interior of the leased premises and all elements therein” as a standard for the tenant’s obligations. This standard could easily require maintenance and repair to major mechanicals and HVAC systems, the costs of which could far exceed basic rent.
Care should be taken not to agree to “replace” the interior elements, because the cost of doing so for plumbing, HVAC, and electrical equipment could be quite high. In addition, replacement provides a windfall for landlords, because the elements so replaced easily could have a useful life far exceeding the lease term.
• Lastly, but not finally, care should be taken when agreeing to have either basic rent or operating-expense rent increased by rises in the so‑called “cost of living.” The standard measures for these increases are published by the U.S. Bureau of Labor Statistics and vary by region and by a description of the items in the shopping cart that are being measured.  Energy costs and medical expenses tend to artificially inflate these indices, and every attempt should be made to use an index that does not use these highly volatile categories.

Though it is difficult to anticipate all potential hidden costs in a lease, a careful reading of the document and a successful negotiation can limit a tenant’s exposure to them and avoid unpleasant surprises.

Attorney Stephen A. Shatz, a shareholder with the Springfield-based firm Shatz, Schwartz, & Fentin, concentrates his practice in the areas of real estate development, real estate finance, and commercial leasing. He is a New England Super Lawyer in the field of real estate, 2004-present; (413) 736-0375.

Building Blocks

By
Martin Kane
Commercial Real Estate Sections
Race Street Project Embodies Progress in Holyoke’s Innovation District

Martin Kane

Martin Kane says the Race Street building that has become the Holyoke Professional Arts Center has “great bones.”

It’s called the Holyoke Professional Arts Center, or PAC, a retrofitted old mill building on Race Street in Holyoke that was once home to a company that made slitter knives. Soon, the Providence Prenatal Center of Holyoke and Tapestry Health will be tenants and thus part of a revitalization that is helping to change the look and feel of the city’s downtown and a section known as the Innovation District.

The banner gracing the front of the building at 306 Race St. in Holyoke is 25 feet wide, and it needs every bit of that length to contain all the information crammed onto it.
If one has the time and inclination, he or she could stop, read, and learn that the more-than-century-old, two-story, 18,000-square-foot building is now called the Holyoke Professional Arts Center (PAC) at Mahoney Place, with the latter part of that name referring to family members of the property’s owner, Jeff Cunningham. One could also see the creative logo for this facility, with a flywheel, similar to the ones that can be seen in the ceiling on the second floor, inside the ‘C’ in PAC.
Reading on, one could learn that the Providence Prenatal Center of Holyoke, a component of the Sisters of Providence Health System, and Tapestry Health, an agency that provides a wide range of health services to women through several locations in Western Mass., will be the first new tenants in the center. And, when seeing the name of the brokerage firm (King & Newton) handling the building — as well as a phone number and Web site — one could surmise that there is still space to be leased — roughly 10,000 square feet of it, to be more specific. Reading still further, one would note that Southbridge Savings Bank financed this endeavor, and also see some commentary in the form of a line that announces this project as “a new era in the rebirth of Holyoke.”
But while this banner tells much of the story concerning this downtown landmark and what its reuse means in the larger scheme of things, it doesn’t tell it all. Indeed, there is a lot of history to this building, and an intriguing series of developments that led to an elaborate construction kick-off ceremony on April 7, said Martin Kane, the broker with King & Newton who has handled the building for years and worked with Cunningham to give it a new start.
Meanwhile, this project is just one of several that are changing the look and feel of this section of downtown Holyoke — a few nearby buildings have been converted into artists lofts and a new convenience store recently opened — and there is the promise of much more to come.
That’s because 306 Race St. sits directly across the canal from the property that will be transformed into the Green High Performance Computing Center that is expected to fuel additional development in the downtown area, across Holyoke, and perhaps well beyond.
“We’re seeing a lot of interest in properties in that section of the city,” said Kathy Anderson, director of the Holyoke Office of Planning and Development. “We’re meeting with people and talking, and in the meantime we’re looking at what we need to do to spark private development there.”
Anderson said there are more developments — from new stages of the city’s canal walk project to the possible reintroduction of commuter rail service after a more-than-40-year absence, that could spur more progress in the central business district of the Paper City and a section now known as the Innovation District. Taken together, the initiatives are a classic case of public-sector investments designed to inspire private-sector spending.
“There’s private development happening, and that’s what we were hoping for,” she said of the Race Street project and others like it. “The Innovation District Task Force is charged with creating ways to leverage the high-performance computing center, to take advantage of it and make something more happen in Holyoke and the region because of it.
“This is just one small project taking shape across the canal,” she said of the PAC. “They’ll be seeing what’s going on outside their windows; people are getting excited about this — there’s a lot of interest in downtown Holyoke.”
For this issue and its focus on commercial real estate, BusinessWest takes an indepth look at the Race Street project and how it is just one small example of progress in Holyoke’s downtown, and evidence of that new era in the rebirth of Holyoke that the banner announces.

Building Momentum
“Great bones.”
That was the descriptive phrase Kane used at least a few times to describe the L-shaped Race Street building as he gave BusinessWest a tour of all three levels. “Rock solid” was also tossed out a few times for emphasis.
Such language was deployed to convey the sentiment that while this property has seen better days, it certainly has intriguing ones ahead of it, and has the foundation, in more ways than one, for new and intriguing uses.
Tracing the history of the property, Kane said it dates back to the late 19th century, and has housed a number of different manufacturing operations over the years. Most recently, it was home to Service Machine, an outfit that made slitter knives, which was purchased by Cunningham, a Worcester-based real estate developer, several years ago.
After that business and its equipment were moved to another facility owned by Cunningham, the property stood vacant for some time, said Kane, adding that Cunningham approached him in early 2008 to explore new options for filling the square footage.
“He asked me what I thought the highest, best use was,” Kane recalled, “ and I told him I thought it would be a good location for offices and service businesses.”
Plans to lease out the property for such purposes hit a brick wall in the form of the Great Recession, which created a huge glut of manufacturing, office, and warehouse space in Holyoke and across the region. But when Kane offered the site as a possible option for administrators at the Providence Prenatal Center of Holyoke, who were looking to trade up from space on High Street, there was strong interest.
“We explored it, and it got to the stage where there were lease negotiations, but nothing came from them,” said Kane, adding that by the spring of 2010, Cunningham was ready to put the property on the market, when the SPHS was approached one more time.
This time, a deal was struck, he said, adding that several months later, Tapestry Health, which has an office on Main Street in Holyoke, signed a letter of intent to relocate to the Race Street facility. Those two agencies will occupy the first floor of the building, said Kane, adding that the 6,000 square feet on the second floor and roughly 4,000 square feet in the lower level have a number of potential uses.
As he gave his tour, Kane gestured out an open window on the second floor to the buildings across the canal that will become the high-performance computing center, and expressed the hope — and expectation — that the much-anticipated project would attract a number of technology-related ventures to the downtown area.
“This would be an ideal site for a Web-development company,” he said of the longer leg of the ‘L,’ which has several of those aforementioned flywheels in the ceiling. “The computing center could generate a lot of interest in this space.”
The same could be said for the whole of Holyoke’s so-called Innovation District, said Anderson, adding that the HPCC is the largest of several developments that could bring new businesses — and greater vibrancy — to the downtown.
Another is the potential for the return of commuter rail, last seen in Holyoke in the late 1960s, she said, adding that the Paper City would be part of service that would run from New Haven into Southern Vermont.
City officials are currently looking at two options for a train station — the former station on Bowers Street, designed by HH Richardson, built in 1883, now owned by the Holyoke G&E, and vacant for some time, and a site for new construction at the corner of Dwight and Main Streets.
“We’re trying to get a train station up and running by the time the train goes by,” said Anderson, adding that the larger mission is to make infrastructure improvements that will connect the recently opened intermodal transporation center on Maple Street, as well as the canal walk, to that train station, wherever it is located.
Meanwhile, the canal walk project is bringing more vibrancy to the downtown area, said Anderson, adding that open studios conducted by groups of artists now located in buildings on nearby Dwight Street are creating more foot traffic in the area. One goal, long term, is to utilize a section of Race Street between Appleton and Dwight Streets for open-air festivals.
Overall, city planning officials are talking with developers now making inquiries about downtown Holyoke and its Innovation District, while also working to determine what additional steps can be taken to inspire and facilitate private-sector spending.
“We’re looking at it from the prospective of what we need to do to create more growth in that area,” she explained. “What type of public investments do we have to make in order to spur private development? We’re looking under the street, on top of the street — do we need to work on our water-supply system or fiber optic infrastructure? We’re preparing for the future growth of the city for the next 30 to 50 years.”

Positive Sign
The banner across the front of the Race Street building provides some good reading, and the expectation is that there will be more of these to appear on downtown properties in the months and years to come.
In many ways, it is a sign of the times, a sign of progress, and a sign of how public investment can spur private development — in both a figurative and very literal way.

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

Progress Report

By
Commercial Real Estate Sections
Ludlow Mills Project Takes Several Big Steps Forward

Kenn Delude says that, when officials at Westmass Area Development Corp. announced their intentions to acquire the former Ludlow Mills property in July 2008, they expected that it would take considerable time to secure the financing and handle the myriad other details needed to make the complex deal happen.
And they were right.
But most of the work on this phase of the ambitious project — amassing the $13.1 million in state grants, private debt financing, and equity investments for needed infrastructure improvements, site-remediation work, and acquisition of the buildings and land — can now be relegated to the past tense, said Delude, president and CEO of Westmass. He told BusinessWest that a purchase-and-sale agreement on the sprawling complex, identified by the clock tower that has become, in many ways, a symbol of Ludlow, should be completed in a matter of months.
And then … well, thus begins the next, probably equally challenging phase — re-tenanting the more than 1.4 million square feet of existing mill space in 66 buildings and developing more than 100 acres of adjacent green space. It is in many ways the most ambitious undertaking, and certainly the largest brownfields yet, for Westmass, which celebrated 50 years of doing business last fall, and an effort that will play out over at least the next 15 to 20 years and create and retain 2,000 to 2,500 jobs, said Delude.
“We knew it would be an exceptionally long lead time, but things should move much faster now,” said Delude, who expects the property to be ready for the marketplace by early 2013.
So, in a way, the protracted acquisition and site-preparation process should actually work to the benefit of WestMass, he continued, noting that, while the economy is in recovery mode and there is some pent-up demand for distribution and manufacturing space (which is what most of the Westmass inventory is targeted for), there should be much more by the time the Ludlow Mills project is fully ready for the market.
“We’ve been below the radar in a lot of ways on this project,” he explained. “During this recession, we’ve been doing our homework on this site; this is the time to get the i’s dotted and t’s crossed, and be prepared so that, when the economy does turn around, you’re there in the marketplace with a fresh resource that is hopefully attractive enough to spur economic development.
“I’m not going to suggest that we were market-timing by any means,” he continued, “but this was a prudent use of our time and resources in this recessionary period when we haven’t seen a great deal of activity.”
Breaking down that $13.1 million, where it came from, and how it will be allocated, Delude said the key to getting things moving was the securing of more than $5 million in state grants for road improvements, other infrastructure work, and site remediation.
“And that was the catalyst for us being able to go to private lenders, area banks, for a development loan for the project, and this request was well-received,” he explained, adding that Westmass borrowed from the scripts for previous projects, ranging from the Agawam Regional Industrial Park (built on the site of the former Bowles Airport) to the Chicopee River Business Park, and sought to involve a consortium of local banks.
At present, six such institutions are involved, he continued, adding that negotiations have been finalized with all but a few.
“With their participation comes the ability to share the risk that’s involved in a project of this type,” he said. “This is the model we’ve used in the past, one in which the local lenders would take portions of a project that had strong community benefits and regional impact.”
Delude said subsurface environmental and geotechnical investigations at the property were scheduled to commence on March 21 as a final step in advance of the acquisition of the property, with that work expected to be completed in early May, putting Westmass on track to acquire the property in June. Permitting, a zone change, and infrastructure commitments will be worked on simultaneously over the next two to three months.
These infrastructure improvements include the reconstruction of State Street, which runs parallel to the property, as well as water-distribution system upgrades, bringing a natural gas line down through the property so it can be converted from oil to gas, storm drainage, sidewalks, street lighting, and other amenities.
Marketing of the complex has already begun in some forms, said Delude, adding that it will become more comprehensive over the next several quarters, and, as with all Westmass projects, it will be local, regional, national, and even international in scope, with the efforts of the Economic Development Council of Western Mass. accounting for most all of the work in the latter two categories.
And with the Ludlow initiative, there will be one unique constituency to target, he continued, referencing the approximately 30 existing tenants in the mill complex, ranging from some warehouse and distribution operations to a kitchen-remodeling business to a fire-restoration company.
“We have businesses there that we need to work with and find accommodations for, and hopefully they can be the seeds for success moving forward,” he explained, noting that roughly 35% of the square footage is occupied with ventures employing a few hundred employees. “These businesses have strong potential for us; we want to sit down with them and talk about options we can make available to them that perhaps haven’t been available. If they fit the mold, perhaps this means new construction or owner opportunities as opposed to leasing.”
Meanwhile, with the acquisition, Westmass will assume property-management responsibilities, he continued, adding that this is another new challenge for the agency and will require additions to the staff.

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

Center of Attention

By
Ken Vincunas
Commercial Real Estate Sections
Northampton Project Moves Off the Drawing Board

Northampton/I-91 Professional Center

Northampton/I-91 Professional Center

Development Associates, which has a portfolio boasting 1.5 million square feet of office and mixed-use facilities across Western Mass. and Connecticut, is adding a new facility to its product mix — a Class A office facility to be known as the Northampton/I-91 Professional Center. And as the name suggests, it promises access and a host of amenities.

Ken Vincunas says that considerable time and energy were devoted to coming up with a name for his company’s latest commercial real-estate endeavor.
And he considers it all very well spent.
Indeed, he believes ‘Northampton/I-91 Professional Center’ effectively conveys not only where his next project will take shape, but what it will become.
The two-building, 80,000-square-foot Class A office complex will be located in Paradise City and, more specifically, just off exit 18 off I-91, adjacent to the Clarion Inn and Conference Center, where it will be quite visible from the highway. Meanwhile, it is a facility being designed for professionals, and while the health care sector is certainly one target, he believes individuals and firms across several sectors will be attracted to this site’s combination of access and amenities.
And in time, the site will become a center of business activity, he predicts, noting that the location makes the complex accessible to points well north and south of that I-91 off ramp, and thus perfect for professionals that do business across the region.
“In the end, everyone involved thought this name captured the fact that it was in Northampton and on the highway, which are the two biggest features,” said Vincunas, president of Agawam-based Development Associates Inc., which is spearheading the project for the owner of the Clarion complex, Atwood Drive, LLC, which has assembled the needed acreage over the past several years. “There were options, incorporating phrases like ‘Mountain View,’ that were a little more touchy-feely, but we wanted to emphasize our strengths and what sets this project apart.”
He described his company’s latest venture as a ‘partial-spec project,’ meaning that work will not commence until commitments have been received for probably 60% to 70% of the available square footage. But there is some risk involved, he continued, adding that there are still some question marks concerning when and to what degree the economy will turn around in the months to come.
The professional center is the first undertaking by Development Associates in Northampton, and is the latest in a series of office and mixed-use ventures across Western Mass. The portfolio, which totals 1.5 million square feet in facilities stretching from New Haven to Greenfield, currently includes the 31,000-square-foot Agawam Crossing professional building, the 85,000-square-foot North American headquarters for Convergent Lasers in the Chicopee River Business Park, the 190,000-square-foot Greenfield Corporate Center, the headquarters for Seahorse Bioscience in Chicopee, and dozens of other single- and multi-tenant facilities.
Vincunas believes this will be a worthy addition to that portfolio and, more importantly, an economic driver for the Northampton area and the region as a whole.

Paradise Found?

Ken Vincunas

Ken Vincunas says that, in addition to location, his project would seem to have timing in its favor.

As he talked with BusinessWest about the Northampton/I-91 Professional Center, Vincunas said be believes this endeavor, the first Class A project to be built in Northampton in several years, has more going for it than an effective name and an attractive location.
Indeed, he’s also of the opinion that the timing is good, especially with regard to the laws of supply and demand. Elaborating, he said that, while the economy is still very much in recovery mode, there are certainly signs of progress and higher confidence on the part of business owners, including those in the health care sector.
“If we get the pre-leasing in place and get started soon, the timing could be perfect,” he said, citing what he considers a good amount of pent-up demand for such facilities within the health care sector and other professional groups. “We’d definitely be ahead of the curve because there’s not a lot of things being proposed for this kind of use.
“In the Northampton office market, while there is space,” he continued, “it’s mostly in the downtown where it’s hard to find parking and it can be challenging getting in and out of the center of town, traffic-wise. This gives people with a regional perspective a location that they can get to from all quarters very quickly. You can draw from all areas. You don’t have to be just a local office; you can be a regional office.”
Meanwhile, many of the office projects created for the health care market, such as a series of developments on Wasson Avenue in the North End of Springfield, near Baystate Health, are at or near capacity, said Vincunas, as are many of the rehabbed former mill buildings in Northampton, Florence, and Easthampton. And as the medical sector, one of the mainstays of the local economy, continues to grow, Class A space will be in demand.
The professional center has been on the drawing board for roughly two years ago, or since Atwood Drive LLC completed the task of acquiring additional adjacent parcels, including a former Mobil gas station and a small auto-repair venture, and assembling a parcel totaling just over four acres.
The timing certainly wasn’t as appropriate then, he noted, referring to both the economy as a whole and the fact that two major potential players, Baystate Health and Cooley Dickinson Hospital, were involved with other initiatives. Also, the project had not gone through the involved permitting process in Northampton, he continued, adding that the cart was essentially put before the horse.
“This time, we received the permitting first, so we know what we can offer,” he said, “and we know we can build it as soon as we’re ready.”
The center will consist of two buildings, one with 39,000 square feet of leasible space, and the other with 43,000 square feet. Full floors are approximately 12,000 square feet, and spaces as small as 1,000 square feet will be available.
The exterior of the buildings features a high proportion of glass, complemented by natural brick and EFIS (exterior insulation and finishing system) effects, said Vincunas, adding that the major entrances of the buildings feature a two-story glass lobby. Meanwhile, green materials and high-efficiency mechanical systems will be implemented throughout the project to reduce energy and improve overall quality.
Vincunas said marketing of the professional center has begun in earnest, and initial interest is solid and crosses several industry sectors. Pricing is currently being finalized on the shell and interior spaces, he continued, adding that these numbers will contribute to lease rates, which have not yet been determined.

Space Exploration
While Vincunas exudes confidence while discussing his latest endeavor, he noted that there are still many variables when it comes to the economy and its ongoing rebound, and that time will tell just how much demand there will be for this new supply of Class A space.
At this moment, though, he believes he has the right product in the right place at the right time.
And the name is pretty good, too.

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