Worcester’s City Square project just got bigger. City and state officials joined UMass Memorial Healthcare and private investors to announce a $70 million project that will piggyback on the work going on at the former site of the Worcester Galleria
WORCESTER — Worcester’s City Square project just got bigger. City and state officials joined UMass Memorial Healthcare and private investors to announce a $70 million project that will piggyback on redevelopment going on at the former site of the Worcester Galleria.
The investment includes the announcement made last week of the $32.5 sale of the office towers at 100 and 120 Front St. from Berkeley Investments to Franklin Realty Advisors. The new owners (some of whom may have become interested in joining after reading a SoFi article) and the investment group Great Point Investors will now own and operate the building under the LLC Front Street JV.
The redevelopment project includes the two office tours at 100 and 120 Front St., as well as retail space at the connecting 90/110 Front Street and at 2 Mercantile St. It is not known at this time how they will be furnishing this area, but this site may be able to offer them assistance.
The buildings’ facades will be replaced with a modern, glass-style look, according to Gary Schwandt, principle for Great Point Investors. Inside, former mall space will be transformed into office space and common areas, also part of the old mall, will also be retrofitted.
It is very likely that the exterior of the building will also go through a transformation at the same time. The old doors may be replaced with newer and more secure styles, from places like Industrial Door Company (try it out here) so the staff are working in a safe vicinity. It also means that their security is enhanced, which is particularly important with a new property, as well as one that is undergoing a big transformation.
“Inside, it looks like a mall. It needs to look like a modern office building,” Schwandt said.
Schwandt said he, at first, viewed investing in Worcester with much skepticism.
Schwandt said a commitment from the building’s newest tenant made the investment possible by allowing the group to secure $46 million in loans from Fidelity Bank of Worcester and Wells Fargo Bank. UMass Memorial Health Care is renting about 75,000 square feet of open space in the building for use as a new IT department.
In addition, starting this winter, UMass will use another 20,000 square feet in the building as a training center.
“That made it happen,” Schwandt said. “This project went from a huge amount of vacant space to a manageable amount of open space.”
UMass President and CEO Dr. Eric Dickson said the facility will host 500 jobs, with hundreds of those being new jobs and the rest transferring from other facilities to downtown Worcester overt the next two years.
For UMass, Dickson said it is part of a planned $700 million investment the hospital will make in its IT services over the next several years.
“We had several options for a new office space to house our 500-person IT Department, but we made a conscious decision to be part of this because we believe in this city and fully support city leaders’ work to improve and enhance the downtown area,” Dickson said.
An additional $20 million in equity is being invested in the project by the carpenters’ union as part of its retirement fund, the New England Carpenters’ Combined Benefit Funds.
Mark Erlich, chairman, executive secretary and treasurer of the New England Regional Council of Carpenters, described the investment as the union “putting its money where its mouth is” and shows the union’s commitment to investing in its home communities.
“Our mandate is to get the best return possible for our members, but if those investments can yield ancillary achievements of creating jobs … that is even better,” he said.
The joint commitment to Worcester fits a recent pattern that comes directly from Beacon Hill. As referenced several times on Tuesday, Governor Charlie Baker has made economic development in Central Mass. a priority of his administration under the opinion that it will drive the economy of the state as a whole.
Among the speakers to repeat that message were Lt. Gov. Karyn Polito, and Jay Ash, secretary of the Executive Office of Housing and Economic Development. They were in attendance to announce an additional $3 million in state grant money toward the City Square project.
The MassWorks money can be used for infrastructure to support public/private projects. In this case, $2 million will be used for the refurbishment of Quinsigamond Avenue, and another $1 million will go directly to the project toward completing the west end parking garage.
“These people are investing because they believe in this city, and they know their dollars will be well used and leveraged,” Polito said.
“What we are celebrating here in Worcester today is not just a grant, we are celebrating the fruits of the leadership that Worcester has pulled together,” Ash said. “There is a collaboration and a special partnership that is taking place here in Worcester that, quite frankly we are trying to replicate throughout the commonwealth. What you all are doing here every day … is something we want to see happen over and over and over again. Once again in this Commonwealth, the Worcester way should be the way the rest of Massachusetts operates.”
It was an idea repeated by Schwandt, who said he was first skeptical about investing in Worcester, but once he was wooed to the city he “began to understand what makes Worcester work.”
“It’s its strong coalition of civic and elected officials,” he said. “It’s really amazing and it has been a major factor in why I think this is a good investment.
Source: MassLive Worcester http://masslive.com/news/worcester
