BOA investment in Canal District could be far off
Are property owners asking too much?
It could be a long, long time before the Bank of America Community Development Corp. has anything to do with making improvements to Worcester's Canal District.
Despite reports that the corporation could "invest heavily" in the district and assertions by city officials that the economic development arm of Bank of America has a proposal in place for the district, Eugene Clerkin, the corporation's Boston-based vice president, said the bank's involvement is "a long way off."
The corporation is poking around Worcester the same as it does in any other New England city.
"We have nothing going on there," Clerkin said. "We've been looking at things, and we're trying to figure out if this is where we want to be."
For now, Bank of America has no site control over any property in the Canal District, a collection of neighborhoods along the Blackstone River just east of downtown and south of Union Station pegged by some as the location for a coming renaissance.
Opportunities
Julie Jacobson, assistant city manager, agreed that Bank of America has no real plans for the Canal District, but said the city is excited about the bank's possible involvement nonetheless.
"They're looking at what opportunities there might be in the area," Jacobson said. "They're looking at what property values are, and what a redevelopment scheme would look like."
According to local real estate brokers and city officials, property owners in the district could simply be asking too much for the properties they've neglected.
According to Jacobson, assessments in the district have increased by $276 million since 2001.
Timothy J. McGourthy, the city's director of economic development, said the Canal District "has a lot of assets," but "it would require some catalyst to realize the values people see down there."
Will Kelleher, a broker with Worcester commercial real estate firm Kelleher & Sadowsky, said, "In my opinion, what's happened down there is [properties] have gone for a long time vacant or nearly vacant, and that situation is very challenging for a developer to go in there and revitalize a property."
The cost of projects like that is so high that "possibly it could be more cost effective to raze the buildings and rebuild new," Kelleher said. Still, "there's a group of owners down in that area that sees it as prime for revitalization. There's a lot going on down there, and everyone's going to want to maximize the value of their real estate."
"From a real estate perspective," Kelleher said, anyone who "pours a lot of money into those buildings is going to have to get some pretty significant rent to justify the cost of the revitalization, and Worcester is mid-market. It's a challenge. It's a bit of a numbers game."
But Clerkin said the Canal District is too far from the Bank of America Community Development Corp.'s drawing board that asking prices haven't weighed too heavily on his mind.
Market measures
"The market is the market," he said. "We're willing to pay market price, and the market's been fine."
"Any of the large cities in New England, we're looking at constantly for development opportunities," Clerkin said.
But as far as the canal district is concerned, "we could be having this conversation 10 years from now."
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