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Cover Story Top Entrepreneur

Towering Achievements

Dinesh Patel and Vid Mitta Are Reimagining a Springfield Landmark

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

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

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

Probably too candid, in his mind.

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

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

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

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

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

Demetrios Panteleakis stands in the space in Tower Square now occupied by Country Bank

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

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

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

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

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

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

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

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

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

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

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

 

Background — Check

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

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

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

The new façade on the hotel at Tower Square

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

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

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

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

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

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

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

cover of BusinessWest’s Top Entrepreneur issue

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

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

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

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

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

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

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

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

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

 

Building Momentum

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

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

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

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

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

Previous Top Entrepreneurs

2020: Golden Years Homecare Services
2019: Cinda Jones, president of W.D. Cowls Inc.
2018: Antonacci Family, owners of USA Hauling, GreatHorse, and Sonny’s Place
2017: Owners and managers of the Springfield Thunderbirds
2016: Paul Kozub, founder and president of V-One Vodka
2015: The D’Amour Family, founders of Big Y
2014: Delcie Bean, president of Paragus Strategic IT
2013: Tim Van Epps, president and CEO of Sandri LLC
2012: Rick Crews and Jim Brennan, franchisees of Doctors Express
2011: Heriberto Flores, director of the New England Farm Workers’ Council and Partners for Community
2010: Bob Bolduc, founder and CEO of Pride
2009: Holyoke Gas & Electric
2008: Arlene Kelly and Kim Sanborn, founders of Human Resource Solutions and Convergent Solutions Inc.
2007: John Maybury, president of Maybury Material Handling
2006: Rocco, Jim, and Jayson Falcone, principals of Rocky’s Hardware Stores and Falcone Retail Properties
2005: James (Jeb) Balise, president of Balise Motor Sales
2004: Craig Melin, then-president and CEO of Cooley Dickinson Hospital
2003: Tony Dolphin, president of Springboard Technologies
2002: Timm Tobin, then-president of Tobin Systems Inc.
2001: Dan Kelley, then-president of Equal Access Partners
2000: Jim Ross, Doug Brown, and Richard DiGeronimo, then-principals of Concourse Communications
1999: Andrew Scibelli, then-president of Springfield Technical Community College
1998: Eric Suher, president of E.S. Sports
1997: Peter Rosskothen and Larry Perreault, then-co-owners of the Log Cabin Banquet and Meeting House
1996: David Epstein, president and co-founder of JavaNet and the JavaNet Café

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The rooftop area at Tower Square

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

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

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

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

 

Landmark Decision

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

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

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

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

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

 

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

Daily News

SPRINGFIELD — Springfield residents and motorists on I-91 will soon see the full name and logo of Wellfleet, a Berkshire Hathaway insurance company, prominently displayed on the city’s skyline.

Signage installation began last week on the western side of the 28-story Tower Square office building at 1500 Main St., at the center of Springfield’s downtown business district.

Agnoli Sign Co. of Springfield is responsible for planning, fabricating, and the complex installation of Wellfleet’s name and logo about 300 feet in the air.

Wellfleet relocated its corporate headquarters to Tower Square in 2019, occupying 80,000 square feet within three floors. Wellfleet has about 210 employees, with the majority based at the Tower Square office.

Founded in 1993, Wellfleet is one of the leading providers of health and accident products to the higher-education market, and its Wellfleet Workplace division offers businesses supplementary health coverage and income-replacement products for their employees.

“After a delay due to the pandemic, we’re excited to be installing the Wellfleet sign on the Tower Square building,” said Drew DiGiorgio, Wellfleet President and CEO. “We take pride in our Springfield roots, and our state-of-the-art offices at Tower Square are the perfect home for our growing company.”

Tower Square is owned by investors Vid Mitta (managing partner), Dinesh Patel, Rohit Patel, and Kamlesh Patel.

Women in Businesss

Urban Oasis

mani-pedi area

Leanne Sedlak (right) and Kim Brunton-Auger renovate the mani-pedi area of their new location.

When spas were allowed to reopen several months ago following a statewide economic shutdown, clients of SkinCatering, LLC were happy to return — even if booking became a little trickier.

“I haven’t been able to meet the demand,” owner Leanne Sedlak said, noting that some staff couldn’t return during a raging pandemic because they or a family member were immunocompromised, while fewer clients than normal were allowed in the space, and extra time had to be added in between appointments for cleaning and sanitizing.

“I feel like we’ve been limping along in a way,” she added. “It is frustrating for the client, and it’s hard to tell them, ‘no, we’re booked up for the next three weeks because we have two people working.’”

Meeting that demand will be easier now that SkinCatering has moved downstairs to the main level of Tower Square in downtown Springfield, in a larger, renovated space offering massage, skin care, hair and nail treatments, among other services.

“It’s nice coming down here,” she said. “We can offer them more relaxing experiences, and we have a little more space as well to keep everybody spread out, so we can have more services happening at the same time.”

Sedlak and Kim Brunton-Auger, a licensed aesthetician who joined the company in 2012 and now serves as vice president of skin-care development, celebrated the move downstairs with a VIP event last week, taking time amid the bustle to recognize the challenge of keeping their enterprise not only alive, but thriving during a year of unprecedented challenge for small businesses.

“We’re definitely blessed because we know other businesses had the opposite experience, so our heart goes out to them for sure,” Sedlak said. “We’re very grateful; we know how fortunate we are in that regard.”

 

Hit the Road

Like many who start down the path of entrepreneurship, Sedlak did so out of necessity. In 2010, the U.S. was dealing with a different sort of economic crisis, the Great Recession, and both she and her husband were laid off from their jobs.

So, when she finished her time in massage school, she went into business for herself with a venture she would call SkinCatering. At first, it was a traveling enterprise, with Sedlak taking her massage table door to door.

“We can offer them more relaxing experiences, and we have a little more space as well to keep everybody spread out, so we can have more services happening at the same time.”

“I’d load up my Tahoe with all my stuff and drive to my first appointment of the day, and that would pay for my gas the rest of the day,” she recalled. “To be in this space now, to build something like this, and to be in business for 10 years, feels validating.”

Since opening a salon in Tower Square toward the end of 2013, the company — mainly focused on massage and skin care — has grown significantly over the years, and the new space will allow for a salon and nail services, which had been a dream of Brunton-Auger’s for some time.

These days, SkinCatering offers massages, body wraps, waxing, Reiki, facials, an infrared sauna, and more. The company formulates its own line of skin-care products that don’t use harsh chemicals and are vegan, gluten-free, and ‘cruelty-free,’ meaning they’re not tested on animals.

“That’s been the mission all along,” Sedlak said of the company’s ‘clean’ products. “It’s a big trend now, and I hate using the word ‘trend’ because it’s not going away; it’s a way of life now. I love it when other estheticians discover our products and their clients have great results.”

Indeed, SkinCatering sells its products in other salons, and is also commissioned by other companies to create private-label products. Both Sedlak and Brunton-Auger would like to see the skin-care line grow in the future.

While retaining its original location upstairs for offices and a product-development laboratory, the new space downstairs is completely dedicated to client services, including four rooms for massages — including always-popular couples massages — and skin care, as well as two hair stations, two stations for manicures and pedicures, and an infrared sauna for one or two people. The latter is perfect, Sedlak said, for people who might want to try a sauna experience, but are intimidated by a larger, group sauna at a gym.

Equally important is a comfortable, subtly lit ‘tranquility area’ where clients can sit between appointments for multiple services, or while waiting on a friend, while sipping tea or water — a more important amenity now that each piece of furniture and surface must be well-sanitized between treatments. “It’s part of the spa experience now instead of there being an awkward pause,” Sedlak said.

“We have to take extra time to super-sanitize,” Brunton-Auger added. “Back-to-back isn’t what it used to be.”

As for other COVID-related changes, staff wear masks, aprons, goggles, and — except in the case of massage — gloves, all of which are changed out between appointments.

The pandemic led to other pivots as well, including a switch to making hand sanitizer in the lab back in the spring. It was hard to find materials and containers at times, Sedlak said, but a small salon like SkinCatering was able to make the production switch more quickly than a large company could. In the meantime, even when the shop was shut down, product orders soared, as people still wanted to treat themselves.

“We had more skin-care orders in the first two weeks of the shutdown than we ever had in the pre-COVID days,” Brunton-Auger said. “It saved the business in some ways.”

 

Moving On Down

She and Sedlak both expect the move downstairs to boost their business further, especially after the pandemic is in the rear-view mirror, whenever that might be. For one thing, they can stay open seven days a week; because the upstairs space was tucked amid offices, the floor essentially shut down on the weekends, and they would have to call to security to turn on the lights every Saturday; they kept it closed on Sundays.

Now, with a shop right next to the hotel entrance that draws more foot traffic, SkinCatering will be open seven days a week.

“We have been working on this project for almost two years, so to see it finally realized and ready to open is a great feeling of accomplishment, especially in the middle of a pandemic,” Sedlak said. “Tower Square has a history of being a hub of activity for Springfield, and we’re very excited to be a major part of why people are coming back into the city.”

And perhaps, eventually, not just the city, as the partners have explored the possibility of franchising their model.

“It’s a duplicatable system that works,” Sedlak said, especially in conjunction with hotels. “It’s an amenity for the hotel and the rest of this tower. It’s convenient, but I don’t want to be known as a convenience spa. I mean, I want it to be convenient, but when you come in, you also have an incredible luxury experience.

“And I don’t mean luxury like stuffy,” she was quick to add. “We want you to be relaxed. It’s the idea of lush, but you feel so comfortable here, you want to stay for a long time. The theme is an urban oasis. Modern, clean, funky, cool, but comfortable.”

While expanding a business during a pandemic may not be the most comfortable move for a small business, so far, Sedlak and Brunton-Auger are proving it’s the right one.

 

Joseph Bednar can be reached at [email protected]

Commercial Real Estate

A New Anchor

Drew DiGiorgio discusses Wellfleet’s move

Drew DiGiorgio discusses Wellfleet’s move, backed by, from left, Demetrios Panteleakis, Dinesh Patel, Springfield Mayor Domenic Sarno, Vid Mitta, and state Rep. Carlos Gonzalez.

Tower Square has seen its ups and downs over the years, but its new owners have been aggressive about selling potential clients on the renovated space, convenient parking, downtown amenities, and simply being part of an economic renaissance in Springfield. Wellfleet took that pitch to heart, which is why it agreed to become the tower’s anchor tenant.

Vid Mitta, managing partner of Tower Square, called Wellfleet’s relocation to the downtown Springfield office tower “a big thing.”

It’s even bigger when one considers how far the company has come, said Drew DiGiorgio, Wellfleet’s president and CEO.

“When we started, it was five employees,” DiGiorgio said. “My office was not an office — it was a desk and a chair located at the bottom of the stairs at a barbershop in Wilbraham. We would open up envelopes, and I would lick them because didn’t even have the little spongy thing. We answered the phones when they rang; we did everything. To go from that to this is pretty humbling, and I appreciate everyone’s support to get us here.”

“If this was five years ago, the issue might have been safety in the downtown. But the dynamic has changed. The downtown is attractive, there are all kinds of venues and attractions nearby, and security doesn’t appear to be an issue any longer.”

Wellfleet, a Berkshire Hathaway company providing accident and health-insurance products, recently staged a press conference to announce the relocation of its national corporate headquarters — and 150 of its employees — to the 10th, 11th, and 12th floors of Tower Square in August.

Wellfleet — which has built a national niche insuring college students, handling more than 100,000 students at more than 200 colleges and universities — has outgrown its current office space on Roosevelt Avenue in Springfield. The new offices at Tower Square will give employees up to 80,000 square feet of class-A office space and provide ample room for Wellfleet’s new and growing Workplace Benefits division.

“To me, Wellfleet is a home-grown, small, Springfield-based company which has grown to this size today, and we should applaud their success,” said Mitta, who announced that Wellfleet’s name will be placed on the tower as its anchor tenant.

Rethinking the City

Demetrios Panteleakis, principal of Macmillan Group, the real-estate firm that represents Tower Square, said his team was in discussions with Wellfleet for about a year as Wellfleet searched the suburban market for a home.

“We were the alternative. They were kind of weighing it against what the suburbs had to offer,” he said, adding that he was able to pitch a downtown headquarters as much more than a fallback. In fact, the more Wellfleet’s leaders considered Tower Square, the more it made sense.

“If this was five years ago, the issue might have been safety in the downtown,” Panteleakis told BusinessWest. “But the dynamic has changed. The downtown is attractive, there are all kinds of venues and attractions nearby, and security doesn’t appear to be an issue any longer.”

In short, a thriving urban center is simply more attractive than the suburbs to many companies. But that shift in perception didn’t happen overnight.

“I think it’s a culmination of everything the folks at City Hall, the Business Improvement District, and all the economic-development folks have been working on, rowing in the same direction, for the last four or five years,” he said. “The result is not only attracting new tenants, but bringing tenants from Westfield, West Springfield, Northampton, Agawam … these are folks saying, ‘Springfield is the heart of the economic engine in Western Mass., and that’s where we need to be; that’s where our employees need to be.’”

DiGiorgio said Wellfleet employees, when asked what’s appealing about Tower Square, cited the modern, renovated space itself, with its natural light, city views, and covered parking, as well as the food options downtown and the fact that the district has been emerging economically in recent years.

“In New England, it’s not a lot of fun when the snow and rain come, so having a secure garage, and having the ease of a building that kind of provides you everything you need over the course of the day, that’s highly attractive,” Panteleakis added.

Drew DiGiorgio called Wellfleet’s new home in Tower Square “inspirational” space.

Drew DiGiorgio called Wellfleet’s new home in Tower Square “inspirational” space.

Formerly known as Consolidated Health Plans, Wellfleet branded under its current name in January, uniting its insurance carriers and claims-administration organizations under one marketing name. It boasts approximately 175 employees, 150 of whom work in Springfield; others work remotely or from satellite offices in Florence, S.C. and San Rafael, Calif.

“We believe being part of Springfield is important,” DiGiorgio said, noting that the company has long been involved in efforts like the Memorial Spring Cleanup, Link to Libraries, Friends of the Homeless, Rays of Hope, and Open Pantry. “We are active in the community. Our name is not well-known, but we think that will change in the future.”

Springfield Mayor Domenic Sarno noted that Tower Square’s owners have been aggressive and creative in bringing an eclectic mix of businesses to the facility, from Wellfleet to the YMCA of Greater Springfield to White Lion Brewing Co.

“A lot of people, years ago, said, ‘what can you expect? It’s Springfield.’ More and more people are saying now, ‘why not Springfield?’” the mayor said. “I won’t say the downtown is re-emerging as much as it is reinventing itself. Springfield is getting on the map. And my administration continues to be business-friendly because it brings jobs.”

Towering Presence

At the end of the day, Panteleakis said, Tower Square is becoming an easier sell.

“When you walk people through the space and they consider the economics of it — for a few dollars more, they can have parking at their leisure, then the level of security and the amenities a class-A building has to offer — it sells itself.”

That’s why he enjoys those tours of the building with prospective tenants, and hopes more companies and organizations request them.

“What they need to understand is what Wellfleet understands — the level of the buildouts of the existing spaces in Tower Square rival anything you’d see in Boston or New York City,” he told BusinessWest. “These are class-A, high-tech buildouts, and there’s a difference between being in a class-B or suburban market and being in a state-of-the-art, class-A office space with spectacular views of the Pioneer Valley.”

At the press conference, Panteleakis said welcoming Wellfleet was “a special day” for the city and the office tower.

“It’s quite remarkable to have another insurance company that’s growing at the rate this company is growing, and it’s only fitting it makes its home in the marquee building in the center of the city, bringing its people, its energy, and its vitality to the downtown,” he noted. “It’s just a great day to see it happen to our city. I think it’s going to be one of many great announcements Tower Square has for you over the coming months.”

Joseph Bednar can be reached at [email protected]

Nonprofit Management

Y’s Plan of Action

Dexter Johnson

Dexter Johnson says the Springfield Y’s move downtown is a significant cost savings, but there are other reasons why it makes sense.

The YMCA of Greater Springfield has had a long-standing policy: once someone has logged 50 years of continuous membership, their days of paying to work out are over.

Dexter Johnson, CEO of the nonprofit, told BusinessWest that there are at least a few dozen people currently taking advantage of this benefit, including one who recently crossed that threshold. “He was counting down the days until April 15, and kept reminding us,” said Johnson. “It’s a badge of honor for them.”

Some of those in this exclusive club can trace their membership back to when the YMCA was located a few blocks to the south of its current home on Chestnut Street, in the heart of the city’s downtown. And most all of them will be turning back the clock in a way and staying with the Y when it makes its move back downtown — to Tower Square — in a matter of weeks.

Johnson hasn’t officially polled these long-time members, but he has gathered some feedback on this move, one that has been accompanied by no end of questions concerning everything from where people will park to why this relocation was necessary, to where people might be able to swim a few months from now.

We’ll get to all those later. First, back to Johnson and those in the ‘membership is free’ club.

“We’re hoping that they stay with us through this transition, and most are keeping an open mind,” he said. “They understand that transition has to happen, it has to happen in life in general, and all businesses go through it some point. Our message to them has been, ‘just wait and come check it out; there’s no need to run somewhere else.’”

And this is the mindset — especially that open-minded part — that Johnson hopes all current members, prospective members, and the community at large will take as the Springfield Y, one of the oldest such institutions in the country, embarks on what will certainly be one of the most intriguing chapters in its history.

“We’re hoping that they stay with us through this transition, and most are keeping an open mind … Our message to them has been, ‘just wait and come check it out; there’s no need to run somewhere else.’”

The lease with Tower Square is for 10 years, and the ensuing decade will be spent exploring and perhaps implementing any of a number of options for securing long-term sustainability for the Y, a nonprofit that has struggled financially not only for the past several decades, but most of its existence, said Johnson, who has researched the matter thoroughly.

However, the fiscal picture became even darker in recent years, said Johnson, adding that the Y essentially reached a point where it needed to get out from under a half-century-old facility that had become an untenable money pit.

But while the move to Tower Square will ultimately save the Y roughly $150,000 a year, the relocation and sale of the property on Chestnut Street should be looked upon not merely as a cost-saving measure, but as a real opportunity for the agency.

Indeed, Johnson estimates there are at least 2,000 people working in Tower Square and the other office buildings abutting it, and within those ranks are undoubtedly people who could benefit from having a well-equipped gym just a few hundred feet from their office or cubicle. Likewise, there are parents perhaps looking for day-care services more convenient than the one they’re using.

Meanwhile, the Y will have a front-row seat for, and perhaps play an important role in, the revitalization of Springfield’s downtown.

“There’s a lot of activity happening downtown right now, and this gives us the opportunity to be part of that rejuvenation that’s going on,” he said.

These are just some of the ‘glass-more-than-half-full’ takes that Johnson has concerning the Y’s new home. For this issue and its focus on nonprofits, he offered much more on how and why this step was taken and what it means for this institution.

Positive Steps

As he talked with BusinessWest in his office at the Chestnut Street facility, Johnson said the Y recently received an appraisal ($1.3 million) on the building — or, to be more specific, the non-residential component, with the five-story living quarters having already been acquired by Home City Housing — and said the property will go on the market later this month.

When asked to speculate on possible future uses, potential buyers, and degree of retrofitting likely to be involved, he obliged.

“If it was a school that really wanted a pool and a basketball court, then there wouldn’t be as much repurposing to do,” he explained. “But if someone wanted to turn it into office or retail space, then obviously there would be significantly more repurposing.”

But at present, Johnson has his mind on many other matters beyond what will hopefully be a quick sale, especially the work to get the Y’s new digs, especially the child-care component, ready for primetime, meaning August by his calculations.

But before we go there, we need to go back and discuss the many factors that brought us to this moment. Recapping, albeit quickly, Johnson said a number of factors and circumstances in recent years — everything from escalating competition in the fitness business to the miscalculation that was the Y branch that opened in Agawam in 2014 and subsequently closed less than two years later, to the ever-rising costs of operating and maintaining the Chestnut Street facility — brought the Y to the point where something needed to be done, and soon.

He said a number of options have been considered in recent years, from new construction — pegged at $12 million to $15 million — to renovation of the existing structure, to retrofitting another building. But the numbers didn’t seem to work with any of them.

A different kind of option presented itself when the new owners of Tower Square — even before they actually owned the property — approached Johnson about the prospects of the Y moving there.

“There’s a lot of activity happening downtown right now, and this gives us the opportunity to be part of that rejuvenation that’s going on.”

And the talks quickly escalated to action.

“The opportunity at Tower Square was chosen because it did allow us to make a quicker move than any other options we explored,” he explained, adding that, as those talks continued, a plan emerged that would bring the old Y, or at least most of it, to two different locations within Tower Square. The childcare unit would be relocated to an area on the ground floor, formerly occupied by Valley Venture Mentors, a travel bureau, dry cleaners, and other businesses. Meanwhile, the wellness center would be located in a large space across from the Food Court, perhaps best known in recent years as the home to the Boys and Girls Club’s Festival of Trees.

The two sides came to an official agreement in the spring, and work has been ongoing at the childcare facilities and, more recently, the wellness center. Meanwhile, logistics have been worked out regarding parking — members can park for free in the Tower Square parking garage — and for the dropoff and pickup of children at childcare in a designated area created along Bridge Street.

The Y will be trading its current 85,000 square feet of space for less than half that (35,000 square feet), said Johnson, but a good portion of the existing footprint is unused or underutilized anyway, including the basketball court and squash courts, which in recent years have been put to other uses. And there are options available for adding more space in the future.

The move is somewhat unusual, but not without precedent, he added, noting that, as the retail scene changes and many YMCAs face fiscal challenges and upkeep expenses at aging facilities, some have found new homes in closed malls and supermarkets, and others, like Hartford’s, have found their way back downtown.

Space Exploration

But while a move to Tower Square was the most sensible option on many levels, it obviously comes with a good amount of risk, Johnson acknowledged, noting that the downtown location brings with it questions, challenges, and limitations.

Starting with the obvious lack of a pool.

Johnson said there are a number of members who make use of the pool at the Chestnut Street location — just how many he couldn’t say — but these individuals will certainly be among those who won’t be going with the Y to its new home.

“The question about the pool is the one that’s raised the most, and that’s a loss for us, no question about it — especially for the adults who use the pool for lap swimming,” he noted. “But for us, that’s not a huge number right now. The pool sees more activity from youth swim lessons and exercise classes happening in the pool, and we’re looking to continue those at other sites.”

Elaborating, he said the Y is exploring partnerships with a number of entities, including Boys and Girls Clubs, schools in Springfield, and other facilities.

As for the membership in general, Johnson said there have been a lot of questions and some anxiety about the move, both of which were expected. But he believes when the dust settles — literally and figuratively — most will stay with the Y.

“There are a lot of great members who have been here 40 and 50 years — we have some long-term members who are used to being here,” he said. “Once they’ve seen the renderings of what the new place will look like and they understand that it’s the same great staff … they’ll realize that, if everyone goes over, then the small groups that have formed and the friendships that have formed can continue.

“We’re not looking to change any of that,” he went on. “We’d just like to change the location and create something that’s more attractive to new membership.”

Overall, Johnson is expecting an attrition rate of perhaps 20% among the Springfield Y’s roughly 1,100 members, a number he admits is a calculated guess based on the feedback he’s received.

That’s a big number, but he’s optimistic when it comes to the prospects for recovering those losses with new members, especially from the ranks of those working in and around Tower Square, a number that will climb by roughly 200 with the arrival of Wellfleet in August (see related story, page 39).

Johnson acknowledged there are already a few gyms downtown — one at the Sheraton hotel in Monarch Place and another just a block down the street at 1350 Main St. — but none right in Tower Square. And none that have the far-reaching mission of the YMCA, where dollars spent on a fitness membership ultimately wind up helping fund a number of youth programs within the community.

He’s already reached out to those at the UMass campus located on the second floor of Tower Square and plans to do the same with Cambridge College, located on the ground floor. Meanwhile, the Y is planning a membership drive and grand-opening specials, to help spur interest in the new facility, as well as half-hour classes designed specifically for business people on tight schedules.

The Shape of Things to Come

In discussing the move to Tower Square, Johnson refrained from describing the new mailing address with the term ‘temporary,’ although he hinted strongly that it probably won’t be permanent.

“As we looked to our future, we saw this as a great opportunity for more immediate stability,” he told BusinessWest. “Our options are open to continue once we get this move done and stabilize ourselves a little bit. I wouldn’t call this ‘temporary,’ but I also wouldn’t say it doesn’t mean that we’re not going to explore standalone ownership somewhere else in Springfield down the road.”

In other words, the move buys the Y some precious time and, by all accounts, a much better chance than it previously had of putting itself on better financial footing for the short and long term.

Which means that, in most all respects, this was a gamble worth taking.

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

Features

Complex Equation

Dinesh Patel, left, and Vid Mitta in the soon-to-be-renovated lobby of the Tower Square Hotel.

Dinesh Patel, left, and Vid Mitta in the soon-to-be-renovated lobby of the Tower Square Hotel.

Both the office/retail complex known as Tower Square and the hotel that sits on the property would be considered somewhat risky investments, given their recent history. But the investment group Springfield Hospitality believes otherwise — in both cases. The new ownership group has announced an ambitious plan to get the Marriott flag back on the hotel, and it is confident about gaining a wide range of new tenants on the retail side of the equation.

As they talked about their plans for Tower Square, the downtown Springfield landmark they acquired last year, and the hotel that is a prominent part of the complex, Vid Mitta and Dinesh Patel had to be careful, even cryptic, with some of their comments.

Especially when it came to the long-rumored signing of the YMCA of Greater Springfield as a major new tenant. That deal has not been finalized, said the partners as they talked with BusinessWest following a press conference late last month on their plans for the complex. And when it is, that news will be announced by the Y.

But also when it came to the small park across Main Street from Tower Square. They hinted quietly that this acreage — dubbed the ‘Little Park for a Little While’ after the Steiger’s department store that sat on the site was torn down (yes, that was 24 years ago now) — will likely become the site of another “hospitality-related business,” probably a boutique hotel.

“We really can’t say anything about that at this time; that’s for … later; that will be phase two,” said Mitta, president and CEO of Mitta’s Group and a partner with Patel and also Rohit Patel and Kamlesh Patel of Maine in the Tower Square project.

As for what’s happening now, Mitta and Patel were not at all cryptic or even careful as they talked about Tower Square, the hotel, their plans for both, and their optimism when it comes to achieving progress and profitability at the office/retail complex that has certainly seen better days.

Peter Marks

Peter Marks says a long list of renovations and upgrades must be undertaken to get the Marriott flag back over the hotel, and the new ownership group is committed to making them.

“When we looked at Tower Square as a possible investment, we saw opportunity where perhaps some didn’t,” said Patel, owner of the Hampton Inn on Columbus Avenue in Springfield, a Quality Inn in Chicopee, and other hotels across the region, adding that, while there is a good deal of vacant space in the complex, especially on the retail side, there is a solid foundation on which to build, with two colleges, UMass Amherst and Cambridge College, assuming large footprints in the building.

And there are already some new building blocks in place, including White Lion Brewing, which is constructing a brewery and tasting area in the long-vacant Spaghetti Freddy’s space along Bridge Street.

As for the hotel, the press conference was called to announce that the ownership group is on schedule and on target to get the ‘Marriott’ name back on the façade. It was removed and replaced with ‘Tower Square Hotel’ in the summer of 2017 as the complex’s former owner, MassMutual, was putting the property on the market.

“When we looked at Tower Square as a possible investment, we saw opportunity where perhaps some didn’t.”

To get that brand name back, the owners must complete a comprehensive renovation and upgrade, said Peter Marks, general manager of the hotel, adding that plans have been blueprinted, considerable infrastructure work has already been completed, and the owners are committed to spending “tens of millions of dollars” to return the hotel to prominence and make it a vital cog in the ongoing resurgence in downtown Springfield.

For this issue, BusinessWest talked with Marks and members of the ownership team about Tower Square and its future (or at least the subjects they could talk about at this time) and why they believe this was a solid investment for them, and the city.

New Lease on Life

Mitta acknowledged that, to the casual observer, anyway, the glass at Tower Square probably looks more half-empty (at least) than half-full.

But the total amount of vacant space (perhaps 20% of the complex) is less than most would think, and there has been, as noted, some progress made toward bringing that number down further.

White Lion will make Tower Square its mailing — and brewing — address, he said, adding quickly that a staffing company and AT&T have come on as tenants recently.

And there is that solid foundation of education facilities on which to build, he said, adding that there are a number of different ways the space may be repurposed in the future.

This is what the new ownership group — operating under name Springfield Hospitality Group — saw when it began looking at Tower Square as a potential investment in 2018. The group paid $7 million for the 25-story office tower and attached retail space, parking garages, and the Steiger’s parcel. The hotel, a separate purchase, was acquired for $10.5 million.

“With Tower Square as a prominent landmark in the city’s downtown, we think we can bring all kinds of businesses, not just retail, to this location,” he told BusinessWest. “We think we can transform the mall into different kinds of uses.”

As an example, he said the complex could become an ‘educational hub,’ or a bigger one, given that there are already two institutions with classrooms and other facilities there.

“We’re working with two other local colleges,” he said, adding that he could not disclose their names because the talks were very preliminary. “Meanwhile, we want to bring in some basic amenities such as a nail salon or a massage parlor or banking. Overall, there are many ways we can fill the available spaces, and we have already started implementing them.”

By that, he meant the AT&T store, the new staffing agency, and the fitness center and daycare components of the YMCA’s operation, which, as noted, have not been finalized.

Overall, flexibility will be the watchword moving forward, he said, and while there are certain visions that have developed for what might the Tower Square complex might look like in a year, or five years, the shape it takes will ultimately be determined by the marketplace and the types of opportunities that present themselves.

“With Tower Square as a prominent landmark in the city’s downtown, we think we can bring all kinds of businesses, not just retail, to this location. We think we can transform the mall into different kinds of uses.”

“We didn’t have a full plan for Tower Square, because as a businessman, you have to take what is available and turn it into opportunity,” Mitta noted, adding that the business plan calls for being profitable “from day one,” and more so with each passing quarter and year.

As for the hotel, it was “unflagged” — yes, that’s the industry term — when Marriott presented a long list of needed renovations and upgrades to the previous owner, MassMutual, which decided those expenditures were not worth making.

As with Tower Square itself, the Springfield Hospitality Group saw things differently, said Patel, adding that he and his partners believe the sizable investment — whatever it will be — will ultimately translate into enough room bookings, weddings, meetings, and other events to justify the expense of getting the Marriott name back over the front desk.

Mitta agreed. He said new construction of a Marriott would require an investment of between $200,000 and $300,000 per room, based on where this building project was taking place. Between the acquisition price of the hotel and the cost of the planned renovations and upgrades, the Springfield Hospitality Group is in that ballpark and probably just below.

“And if those new construction projects are going to work, why not renovations at this prestigious landmark?” he asked, before answering that question himself, in the affirmative.

Plans call for what Marks called an ‘inside-out’ concept, where elements of the city are incorporated into the design and décor of the renovated hotel. Specific improvements call for renovations to each room and the addition of one room, a suite, bringing the total to 266, said Marks. Also, the sixth floor, familiar to most area business owners and managers because it’s home to the banquet space and conference rooms, will get a makeover that includes a new fitness center with glass walls overlooking the rooftop garden.

A new, much larger bridal suite will be added, he went on, noting that the lobby will be given a new look as well.

“There are a lot of exciting changes,” he said, adding that the hotel will become part of what’s called the ‘Reimagined Marriott World,’ a comprehensive survey of customers and potential customers to determine what they want in a hotel — and a Marriott.

“The feedback was, ‘we want more than a place to sleep,’” he told BusinessWest. “They said, ‘we want a place where we can connect, relax, entertain, and do all the things we want to do.’”

And this led to the conceptualization of what he called a ‘great room’ in the lobby.

“The entire great room is the one place to be,” he said. “There’s a bar there, you can eat anywhere in that whole great-room area, and technology will allow our staff to deliver unsurpassed hospitality in the market by going out and greeting the customer with tablet in hand and checking them in the lobby.”

Model rooms will be available for viewing this spring, he went on, adding that construction, already underway on infrastructure systems, will move to more visible areas in the coming weeks.

Staying Power

“We’re going to be the number-one, most prestigious hotel in Western Mass.,” said Mitta, adding that the planned renovations and improvements should position the hotel to fully capitalize on the momentum being seen in downtown Springfield.

He noted that the arrival of MGM Springfield, as well as the performances and events it will bring, add up to considerable opportunity for a name-brand hotel located in the heart of downtown.

“Usually, a casino like this has 1,000 rooms, and some have 1,800 or 2,000 rooms,” Mitta explained. “This one has 250 rooms. That’s not enough when you bring events like Stevie Wonder and Cher to your city. This creates opportunities. If we make this hotel business-friendly with a lot of amenities, people will stay downtown.”

That was the thinking behind this large investment, and the partners who made it are confident their investment will soon start paying real dividends.

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

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