Worcester's Original Incubator
Julius Palley tends to his tenants
Nestled among the bustle and promise of Gateway Park, behind the newly renovated mills housing biotech space on Prescott Street, Julius Palley is quietly running his farm.
Palley's pasture is the hulking, drafty, oddly charming former Washburn and Moen mill building at 100 Grove St., while the building's 65 tenants are his crops.
Palley, 82, bought the building 25 years ago with help from a mortgage secured from the Bank of Ireland, which at the time primarily lent to farmers and foresters, he said.
"They told me, 'Well, this is a farm,'" Palley recalled. "'This is a farm, and your tenants are your crops. If they do well, you'll do well.' And they were right."
A Light Touch
In the quarter century that has passed since then, Palley's farm has quietly proven itself a remarkably fertile place, a reminder that a strong sense of Yankee work ethic and common decency can not only produce good crops, but can be good business too.
Palley, much like the building he occupies, is a man from a long-broken mold. He's apt to interrupt you and compliment your shirt. He doesn't hold to traditional property management norms, such as charging a set rate per square foot, or creating a consistent formula for a space's value. He tries not to bump up a tenant's rent each year, or charge more for certain amenities. Like any good farmer, Palley knows that fostering growth sometimes requires a light touch.
"We try to leave folks alone for the most part," Palley said. "A lot of these businesses here are borderline businesses. If you push them, they don't just leave here, they might leave the business world altogether. So we try not to disturb them."
Palley understands that space on the first floor of his building probably has more value than similar space on the third floor, but it's not a rule he holds fast to. Instead of setting a tenant's rent based on cold square footage, he said he thinks more in terms of rough dimensions, of the space's location in the labyrinthine building, and of the tenant's own circumstances before striking a deal.
He admits the policy, or lack thereof, isn't easy, and sometimes wishes he did it differently. But the relationships he's built with his tenants are worth more than a clean balance sheet at the end of the month. While he doesn't hold fast to a set rate, space can go for as little as $6 per square foot. That's a deep discount compared to most office space in the city, which can go for as much as $30 per square foot.
"It's a labor of love," Palley says of his own version of agri-business. "It has to be. Nobody is going to get wealthy doing it the way we do, but it's nice."
The Rabbit Warren
"The word we usually use is the rabbit warren," said Christopher Tutlis, an associate at Bolton & Dimartino Inc., a structural engineering outfit located on the third floor of 100 Grove. He said a lot of people get lost near his little corner of the farm, often looking for the offices of Palley Advertising, operated by Julius Palley's cousin, Warren Palley.
"If you can get them to the right floor, they can usually find their way around using those signs," Tutlis said.
The arbitrary nature of the space almost turned Michael Sacco, president of Sacco & Associates, a tax-consulting firm, away from the building when he moved into a space on the second floor, towards the rear of the building, in 2001. He was worried his customers would never find him.
Sacco's roughly 1,500 square feet is bright and open, belying the cold corridor it opens into. Palley and his team helped with the company's build out of its space, and Sacco attributed most of the design to Palley.
Palley said Sacco's office suite used to be part of a bowling alley on site. The transition from bowling alley to CPA office is just part of the routine, he said.
Many tenants, rather than moving out to find more functional space as they grow, instead grow within the confines of 100 Grove St. Palley said he regularly helps accommodate growing tenants by moving them to larger vacant space, or by renovating their existing space, knocking down walls and erecting new ones as necessary. Decades-long connections and cooperation with the City of Worcester help him get necessary permits and licenses in a timely fashion.
The building currently has between 4,000 and 5,000 square feet of vacant space, said Palley.
Crop Rotation
Tutlis, whose company moved from larger space on Franklin Street about two years ago, is content in the small office he shares with Joe DiMartino, the company's owner. Packed with blueprints, project binders and equipment, the engineering office is cluttered, but functional. When it comes time to expand sometime down the road, DiMartino said he will try hard to make it work at 100 Grove.
"It's kinda like inter-family arranging," Palley says of the constant musical chairs act. "We all do it together."
This constant crop rotation might create a headache for any other property manager. But Timothy Maloney has been at Palley's side for 31 years, and he's seen it all.
Maloney and his team spend most of the day on-site, responding to about three or four maintenance calls per day, ranging from leaks to minor HVAC issues. Both Sacco and Tutlis said Maloney's team is always exceedingly prompt and efficient in responding to maintenance requests.
The sheer density of businesses in the building lends itself to certain business partnerships, which Palley heartily encourages. When told that two engineering firms in the building, Graves Engineering on the second floor and B&R Engineering on the third floor, had to walk through the building and down around several winding corridors to sit down with each other, Palley had Maloney install a metal spiral staircase between two corridors, to help cut down travel time.
"You just do what you do. Why fight it?" Maloney said of the ins and outs of his job. "You've got to keep the tenants happy."
When not keeping the tenants happy, Maloney keeps himself happy by engaging in his hobby - restoring, renovating, or otherwise bringing the creaky old building back to some semblance of its former self.
The restoration work began when Palley first bought the derelict factory, and continues to this day. Given the time, Palley said he would like to next restore the exterior of the building to its former grandeur, but can't justify the cost if it doesn't really help his tenants.
The devil is in the restoration details at 100 Grove St. Hardwood floors, though dinged with decades of abuse, look clean enough to eat off of, and practically gleam from regular oiling. Palley took pains to make sure the steps on a recently installed staircase matched the pre-existing hardwood floors.
Palley said the building's existing elevators were originally installed by a man afraid of heights, and as a result were built with double-redundant safety systems, making them safer than any elevator in the city.
In Palley's mind, they don't really build them like they used to, which is kind of his whole point.
"I look at it like the days when I went to public school," Palley said. "In those days, the floors were always well-oiled, the banisters were shiny. Well, that's the atmosphere we like here. That's how we take care of this old place."
The attention to detail is time-consuming, but Palley's insistence on keeping things all in the family, and letting Maloney finish the work as part of his larger maintenance duties instead of bringing in an outside contractor, helps keep costs down, another important point for Palley.
For Palley, it comes down to three things when he tends to his crops - service, value and a family, cooperative atmosphere.
"If there's a method to our madness it's this: to offer a somewhat sophisticated property at a minimum cost. And we've succeeded to an extent," he said.
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