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‘We Love Real Estate’

Architect’s renderings of the Clocktower Building and the Colonial Block (below).

Architect’s renderings of the Clocktower Building and the Colonial Block (below).
(Images courtesy of Pickard Chilton)

Colonial Block

Colonial Block

When Ed Woodbury was encouraged by close friend Tim Brangle, president of Chicago Consultants Studio, to closely consider the Clocktower Building project in Springfield, he immediately challenged him to back up that request.

“He said, ‘Ed … you should take a look at this,’” recalled Woodbury, president of Chicago-based McCaffery Interests, which has a wide and deep portfolio of urban development and redevelopment projects, many of them clustered in Pittsburgh, Washington, D.C. and Northern Virginia, and the Windy City, and considers hundreds, if not thousands, of requests for proposals each year. “And I said, ‘why? Why do you think this is for us?’

“He spoke very highly of the city and its leadership, pointed out the inherent attributes of the Basketball Hall of Fame and the casino, and then gave a brief history of how Springfield had turned the corner from previous down times, if you will,” Woodbury said of Brangle, who has consulted with Springfield officials on the design of the casino and economic development surrounding it. “Naturally, none of that was familiar to us, so we looked at it, and the story happened to be true. And we liked that story.”

That’s a brief synopsis of how the Clocktower initiative, which involves three properties owned by the Springfield Redevelopment Authority — the Clocktower Building (113-117 State St.), the Colonial Block (1139-1155 Main St.), and a smaller building on Stockbridge Street — came to be part of that impressive portfolio.

On the McCaffery website, the project is listed among others like in size and character, including 1600 Smallman, the historic renovation of a 1921 structure in the Strip District of Pittsburgh into office spaces with views of the downtown skyline and the Allegheny River, and the Cork Factory project, an award-winning restoration and redevelopment of the Armstrong Cork Factory, also in Pittsburgh (more on that later).

In many ways, the Springfield project, which will add more than 90 units of market-rate housing to the mix, fits right in with these others, said Woodbury, adding that it involves redevelopment of historic properties, but also represents economic development and efforts to revitalize that area of the city.

“This will require multiple sources — you don’t just make one or two phone calls and someone says, ‘yeah, I like that project; I’ll fund it with you. It’s going to take more than a village — it’s going to take a little city.’”

“It’s a neat little project — it’s not big in our world,” Woodbury said of the Springfield initiative. “But I think we’re adding something to the downtown, both by the restoration but also through our development approach and how we look at projects and think about them.

“We don’t look at the buildings themselves,” he went on. “We look at the context of the buildings and where they sit — in this case, across from the casino and across from the MassMutual Center.”

From what he’s heard and seen himself — he’s now visited Springfield a few times — the city is in what he called the early stages of a rebirth, and this project could help bring it to the next stage.

“One of the things that adds to a rebirth is, in some cases, retail, but in a lot of cases, it’s getting people to live back downtown,” he said, “rather than working there, leaving there, and going back to their home in another part of town or one of the suburbs.”

While there are opportunities with this project, with a projected price tag of $55 million to $60 million, there are challenges as well, especially when it comes to funding, said Woodbury, listing the current economy and rising interest rates among those challenges, factors that will require more creativity when it comes to what he called the ‘capital stack,’ or the blend of resources that will be needed to make this project reality.

“This will require multiple sources — you don’t just make one or two phone calls and someone says, ‘yeah, I like that project; I’ll fund it with you,’” he said. “It’s going to take more than a village — it’s going to take a little city.”

Armstrong Cork Factory in Pittsburgh

Ed Woodbury says restoration of the Armstrong Cork Factory in Pittsburgh is one of several projects in the McCaffery Interests portfolio similar to the Springfield undertaking.
(Photo courtesy of Ed Massery)

The company has vast experience assembling needed funding, he went on, adding that he’s confident that the ‘little city’ he mentioned can come together, and that this project will play a significant role in Springfield reaching the next stages of a rebirth.

For this issue and its focus on commercial real estate, BusinessWest talked at length with Woodbury about McCaffery Interests, the Clocktower building project, and how this Springfield initiative fits the company’s mission — “to transform underutilized urban assets into dynamic destinations that serve modern lives as they intersect at work, home, and play.”

 

Landmark Decisions

Woodbury said McCaffery handles a broad range of work, from development to property management. And in that first category, it focuses on both redevelopment of existing (again, usually underutilized) properties to new construction.

But the common denominator, if you will, is that essentially all this work is carried out in cities.

“The focus has always been in urban areas,” he told BusinessWest. “We like the life, the vitality, and even the grit of cities.”

Most projects are in larger cities, including Pittsburgh, Chicago, D.C. and the surrounding area, and, most recently, Denver, where the company has several projects in various stages, including T3 RiNo, a mixed-use, 250,000-square-foot office project in that city’s burgeoning River North (RiNo) District.

“The focus has always been in urban areas. We like the life, the vitality, and even the grit of cities.”

Formed in 1991 by Dan McCaffery (Woodbury said he joined him “almost immediately”), the company’s first signature project was the revitalization of a former Saks Fifth Avenue store on Michigan Avenue in Chicago.

“We renovated it, leased it out, and put in Nike, Sony, and Cole Hahn; it was the height of what we call Main Street retail,” he recalled, adding that the project set the tone for other initiatives to come.

These include restoration of another historic property, 400 Post St. in San Francisco’s Union Square, that was destined to be torn down. “It was a great piece of real estate that had been overlooked for years,” Woodbury recalled. “We said, ‘heck, this is a cool, old building; let’s restore it.’ We put in a Disney store and a Borders Books.”

Reliance Building in Chicago

Restoration and redevelopment of the Reliance Building in Chicago, now home to the Hotel Burnham, is another project in the McCaffery portfolio similar to the one in Springfield.

As he cited those names, he noted that retail has certainly changed over the past few decades and especially the past several years; thus, the company now focuses mostly on mixed-use projects, be they new construction or renovation of existing structures, with retail on the ground floor and residential in the floors above — which is what is proposed for the Springfield project, as we’ll see.

And while McCaffery does most of its work in larger metropolitan areas, the company considers projects in communities across the country.

“We’re opportunity-focused — we search for unique opportunities and chase them,” Woodbury said. “The other thing is, we love real estate — old buildings, new buildings, it doesn’t matter; we love real estate.

“For us, it’s about finding high-quality real estate and exploring and seeing what we can do — with the land or existing properties,” he went on, adding that, with Springfield and its Clocktower Building initiative, what it can do — what it wants to do — is bring that aforementioned mix of uses, specifically retail on the ground floors and residential on the upper floors.

 

Lofty Expectations

Indeed, architect’s renderings of both the Clocktower Building and the Colonial Block portray well-lit shops with sidewalks crowded with passersby, elements certainly missing from the current picture — and missing for the past several years, in fact.

To make those colorful images become reality, McCaffery Interests will call on 34 years of experience with dozens of projects in several different cities and high levels of creativity with putting together a needed funding stack.

As he talked about the Springfield initiative, Woodbury said there are several projects in the portfolio that are somewhat similar — maybe not in terms of overall size and scope, but certainly in terms of restoring landmark properties, using historic tax credits to finance the work, and creating higher levels of vibrancy in downtowns or other key districts.

These include restoration and redevelopment of the Reliance Building in Chicago, now home to the Hotel Burnham, which was built in 1895 and is listed among the 100 most historically significant skyscrapers in the world.

“It’s one of the original high-rises in Chicago and one of the first places where an elevator was utilized in high-rise construction,” he explained. “We renovated it, but didn’t return it to an office building; we converted it to a hotel with restaurants on the ground floor.”

His short list also includes restoration of the Armstrong Cork Factory in Pittsburgh, originally constructed in 1901, and converted into 297 loft apartments, a project that earned several awards, including an Award for Excellence in 2009 from the Urban Land Institute and a Western Pennsylvania Golden Trowel Award in 2007.

“We took a building that was old and abandoned and invested side by side with a great partner in Pittsburgh and put the property on the historic register,” he said, adding that the project is one of the key contributors to growing vibrancy in the Strip District.

Springfield’s Clocktower Building and Colonial Block are similar in that they both boast considerable amounts of history — and have been largely vacant for several years now.

And, in Woodbury’s estimation, they have a future that can be as significant as their past.

“The Clocktower Building has great bones to it, and it’s the same with the Colonial Block,” he said. “The Clocktower Building is older, and some of the renovations over the years have unfortunately disrupted its historic character, but it adds a nice scale to the street — State and Main — which is fun to say, because it’s literally State and Main.

“And the Colonial Block was originally residential on the upper floors, which lends itself nicely to converting it back to that,” he went on, adding that, overall, Springfield is “looking forward being optimistic about what a city can and should be — and those are the kinds of places where we like to work.”

As for the challenges ahead, especially funding, Woodbury returned to that notion of this project needing not a village, but a small city of resources contributing to the capital stack.

“Federal and state tax credits are going to be a big source — they will be the lead bell cow in our funding stack,” he explained. “But there will be some funding needed from the State House, there might be some funding needed from the city, and then there’s obviously some private monies to be put in place as well; all of those food groups will come into play.”

The overall goal is to start construction late this year or early next year, he said, adding that it will be 24 months from when the company submits final drawings until the first tenants — residential and commercial — can move in.

Woodbury is confident this goal can be met, and equally confident that this initiative can do what so many other projects in the McCaffery portfolio have: revitalize not only real estate, but entire neighborhoods and cities.