Untapped Potential: 5 Central Mass. Business Properties That Need Developers
PHOTO/JACQUELYN GUTC
The former Worcester County Courthouse has been waiting for a developer for two years. Its listing on the National Register of Historic Places limits what a developer can do, but also provides it with tax credits.
As Central Massachusetts communities rebound from a recession that brought foreclosures, bankruptcies and budget cuts, they're looking ahead and working to bring in business. But many cities and towns are sprinkled with properties that need new owners or have vacant land waiting for developers.
The sites all have their own stories, setbacks and potential.
The potential many of them share is economic. Whether it's the 167-year-old courthouse in Worcester, situated just outside of a downtown that's experiencing a development explosion, or a former chemical manufacturer's 28-acre site in Fitchburg and Westminster that once employed roughly 200, those involved with these sites view them as major economic generators just waiting to be realized.
Here's a look at five of those sites.
WORCESTER: A Clash Of Past And Future
The former Worcester County Courthouse sits on the corner of Main and Highland streets. The first portion of the site, a 40,000-square-foot structure, dates back to 1845, while the second, at 214,000 square feet, was built in 1954. Situated on nearly 4.5 acres with overgrown shrubbery and boarded-up windows, the site has been vacant since 2007, when the new courthouse opened.
Owned by the state's Division of Capital Asset Management (DCAM) as a surplus property, it was supposed to go up for auction in early 2011. But after receiving just one bid, the auction option was shelved.
At the time, Mark Shear, president of Berman Auctioneers & Appraisers of Worcester, which was to have conducted the auction, said, "There's a real excitement and a real interest in building that area into something attractive. Someone is going to have a real win-win situation here."
James Glickman, principal with commercial real estate firm Glickman Kovago & Co. in Worcester, sees potential in the site, as well as challenges.
"I think it's made somewhat complicated because there's a building on it that was added onto several times and there's probably a historic portion to it that people don't want to see torn down."
The building is listed on the National Registry of Historic Places.
"It's just a question of what you can do with that (historical) asset," said Timothy McGourthy, Worcester's chief development officer.
Deborah Packard, executive director of nonprofit Preservation Worcester, noted that Historic Rehabilitation Tax Credits, which can cover up to 20 percent of a project's costs, are available.
DCAM and the city are trying to develop a better plan for the site. McGourthy expects to receive the findings of a DCAM study of the courthouse's environmental situation soon.
"Our goal is to have a much better sense of the cost of redevelopment, not yet knowing what the end user might be," he said.
Possible uses for the courthouse include a college site, loft apartments or business incubator space, with the newer portion of the building possibly being demolished to make way for new construction, McGourthy said.
Packard said redeveloping the site is critical since the area serves as a gateway into downtown. McGourthy agreed, although he said whatever redevelopment takes places must be in line with other recent developments around Lincoln Square, including Worcester Polytechnic Institute's Gateway Park.
SOUTHBRIDGE: Getting Out Of The Landlord Business
While state and Worcester officials work to bring a prime, multimillion-dollar property into the private sector, Southbridge Town Manager Christopher Clark has similar goals for significantly smaller parcels in his town on the Connecticut border.
One is a 10,992-square-foot building at 115 Marcy St. Built in 1998, the town leases the site to a Head Start program, but Clark wants to steer the town away from owning the building.
"Municipalities really aren't good landlords," he said. "We really lack the resources to put significant capital in."
He said an independent audit found the town is losing $50,000 a year on the building.
Clark said the difficulty in finding someone to take over the properties has to do with the state's procurement laws. They dictate that municipalities write a request for proposals, giving everyone who's interested a chance to bid, rather than sell it through a Realtor. "Theoretically, when you have had 10 bidders, that process works great. When you've got nobody, what do you do?"
In an effort to drum up interest, the town has agreed to allow bids of up to 33 percent below the property's appraised value and recently added triple-net lease options, meaning a tenant would be responsible for taxes, maintenance and insurance in addition to rent and utilities. Last month, Discover Southbridge hosted site tours for brokers, local officials and business owners.
GARDNER: Cleanup Issues
While government red tape may be to blame in Southbridge, Gardner's redevelopment efforts are benefitting from state and federal assistance. The city acquired the former S. Bent Furniture and Garbose Metal Co. sites on Mill Street as part of an urban renewal plan. Both were heavily contaminated from more than 100 years of manufacturing and were identified by the state as brownfield sites, requiring millions of dollars in remediation and cleanup.
The 21-acre S. Bent site was acquired by the city in 2007, seven years after operations there ended. In 1999, the city purchased the 10-acre site from Bernard Garbose after the company shut down.
"We took (the Garbose site) with the premise of cleaning it up and returning it to the private sector," said Trevor M. Beauregard, Gardner's economic development coordinator. He said it was important for the city to take over because of the area's environmental sensitivity due to its proximity to a river and wetlands, for safety, and for economic development. The cleanup of the Garbose site is expected to cost $1 million to $2 million.
"We've had some preliminary talks with developers. Given the amount needed to clean up the site, these developers have walked away," Beauregard said.
The city secured money from state and federal agencies. For example, a $200,000 Environmental Protection Agency grant allowed for the rehabilitation of the S. Bent site, and Beauregard said it has "a clean bill of health."
The completion of the Bent site cleanup lets the city focus on the Garbose property, which Beauregard said needs more work. The next phase there will be the demolition of two buildings and cleaning up the land. He said the city hopes to be done with cleanup within 12 to 18 months. Of the 55 acres the city includes in its Mill Street Corridor Urban Renewal Project, it owns about 37, with cleanup concentrated on the Bent and Garbose sites.
The city has preliminary plans for the area, including a possible solar panel installation on part of the Bent property.
FITCHBURG: Utility Cost Concerns
International Process Plants (IPP) also feels the pinch of low manufacturing demand. In 2007, the New Jersey company, which purchases and resells chemical plants and equipment, bought the former ChemDesign property divided between Fitchburg and Westminster, out of bankruptcy. The site is a 28-acre industrial park with 106,800 square feet of space spanning 12 buildings. It's also specialized for chemical manufacturing, which Dan Curley of the Fitchburg planning office said is the main issue with getting it developed.
But Stan Sackowitz, vice president of real estate for IPP, said he's shown the site often and the cost of utilities turns developers off.
"I can't say it enough: the price of the power there has hurt every customer who looks at it," he said.
Sackowitz said his 30-year-old company hasn't held another property for as long as it has this site, and it continues to pay for its 24/7 security and maintenance. He blames lack of interest in the site on the recession and that manufacturers are not moving into the area.
SHREWSBURY: Being 'Pad Ready'
In Shrewsbury, the 66-acre CenTech North project, formerly known as the Allen property, is getting the infrastructure officials say is critical to its development. But it hasn't landed buyers yet.
In 2002, Shrewsbury acted on its right of first refusal and matched a $6.1-million purchase offer of the farmland at South Street and Route 20 to prevent it from being developed for apartments and bring in more tax revenue.
The land has potential for 611,000 square feet of development.
Julie Holstrom, Worcester Business Development Corp. project manager, said her organization is working with Shrewsbury to help get the site "pad ready," meaning it will have the necessary infrastructure so a company would just have to erect a building.
She said sewer construction is expected to be completed in mid-to-late summer, bringing service to the Route 20 and South Street sides of the property. Of potential buyers "all of them have gone away," said Kristen Las, Shrewsbury's principal planner and economic development coordinator.
For example, she said Partners HealthCare approached the town about building a data center, but Shrewsbury didn't have necessary water capacity. Las said the town is working on amending its water use permit.
Stephen E. Woelfel Jr., associate director of Cushman & Wakefield, which is marketing the site, said market difficulties also are affecting CenTech North.
"It's difficult to get people in to a land development when there's so much existing inventory available," he said. "The market is 25 percent vacant."
Yet, Woelfel said he has shown the properties to about 10 developers in the last year and that the market has improved in the past three months.
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