Denholm Building proposals call for either $113M or $65M mixed-use redevelopments
Photo | Timothy Doyle
Worcester's Denholm Building
The rundown Denholm Building on Main Street in Worcester is slated to become either a $113-million, mixed-use housing development with an affordable component, or a $65-million mixed-use luxury apartment complex, according to proposals considered by the Worcester Redevelopment Authority on Thursday.
WRA revealed in its Thursday meeting the results of its request for proposals to redevelop the Denholm Building in downtown Worcester. The WRA purchased the building in August for $3 million and issued a request for proposals to redevelop the decaying property in November. Proposals were due on March 24.
Proposals were submitted by RMS Companies of Stamford, Conn., Washington-D.C. based The Menkiti Group, Criterion Group of New York City, and Joseph J. Corcoran Co. of Quincy. Two of four proposals submitted to the WRA to redevelop the former Denholm Building at 484-500 Main St. were moved on to the next step in the approval process, said Worcester Chief Development Officer Peter Dunn during the WRA meeting.
The proposals from RMS and The Menkiti Group were selected to move onto a comparative evaluation before WRA picks which of the two will buy and develop the building. WRA requested that construction begin within 18 months of the sale and be completed within 24 months of that period.
The Menkiti proposal: $113M mixed-use with affordable component
The Menkiti Group proposed 233 market-rate and affordable apartments in two adjoined 10- and 11-story buildings with a courtyard, along with 10,000 square feet of retail space.
The project would consist of 89 studios, 108 one-bedroom units, and 36 two-bedroom units, and 20% of the units will be income-restricted and 10% will be compliant with the Americans with Disabilities Act.
The company is proposing five retail spaces between 1,500 and 3,200 square feet, and 198 parking spaces including a surface lot on Chatham Street.
Menkiti’s proposal would be expected to cost $113 million with an anticipated equity requirement of $42.4 million. Funding sources are expected to include The Obsidian Catalyst Fund in Washington, D.C., which invests in urban real estate development led by predominantly Black and brown entrepreneurs, according to the proposal from The Menkiti Group.
Menkiti would expect to participate in state and local incentive programs, including a subsidy from the Massachusetts Housing Development Incentive Program and a tax increment exemption from the City of Worcester.
The Menkiti Group has several development properties downtown including the Chatham Lofts, the former Shack’s building, and a mixed use building at 554 Main St.
The RMS proposal: $65M luxury complex
RMS proposed approximately 200 luxury apartments, 130 parking spaces, and 6,500 square feet of ground floor retail, amenity, or co-working space, according to the proposal submitted to the WRA. There are two segments proposed of five and six stories.
RMS expects to negotiate a tax increment exemption and acknowledges it will comply with the inclusionary zoning laws as they are ordained. Of the units, 10% will be ADA-compliant.
The company anticipates the project would cost $65 million and would be funded 65% regional bank debt with the remainder being supplied by internal funds.
The RMS proposal said the the company may use the Chatham Street lot for parking or for further development.
RMS has developed several multifamily properties in Hartford, New Haven, and Stamford.
The rejected proposals
The Criterion Group of New York proposed to build two buildings containing 188 apartments, 128 one-bedrooms expected to lease for $2,400 a month, and 60 two-bedroom units leasing for $3,200.
WRA rejected the project because its proposal did not satisfy the RFP requirement to demonstrate an understanding of the WRA’s Responsible Employer and Inclusionary Participation Policy and include an affirmative statement relative to its commitment and past experience complying with related laws and policies, said Dunn.
In its other Worcester project, Criterion is seeking approval for a warehouse at 135 Brook St. at the former location of Showcase Cinemas Worcester North in the Greendale neighborhood. It also owns the former Primetals Technologies factory on Crescent Street and an industrial site at 140 Goddard Memorial Drive, both in Worcester.
Joseph J. Corcoran’s was the only proposal to envision an adaptive reuse of the property, but its proposal was disqualified because it declined to submit the required deposit as part of the RFP process.
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