City working hard to fill empty mills
By MICHAEL LAFLEUR
Sun Staff
LOWELL When it comes to reclaiming the city's old
mill buildings, there is one overriding factor that can
sway a developer from leaving his former factory
vacant to transforming it into new condominiums or
commercial real estate: Money, and lots of it.
The math is simple, said Matthew Coggins, Lowell's
assistant city manager for planning and
development. If a developer can get more rent
money per square foot than he'll spend on building
rehabilitation, renovations begin.
If not, they won't, he said.
"One of the problems is that many of these buildings
have deteriorated to the point where they most
likely are not viable without a massive amount of
public subsidy," Coggins said.
While Lowell has come a long way from the 1980s,
when even the Market Mills site that is now home to
the Lowell National Historic Park was empty and
open to the elements, there are still some
high-profile eyesores in the downtown area.
"The city has made significant progress, but the problem is that the
projects that are left are the ones that are the most difficult to do," said
City Councilor Bill Martin, who has requested an update on mill
developments for sometime later this month.
Included on that list are:
Canal Place III, whose broken windows and crumbling facade hide a
virtually unsalvageable interior amidst the successful Canal Place I and II
condominium developments on Market Street.
Massachusetts Mills III, the lone vacant portion of the thriving condo
community between Merrimack Street and the waterfront. The mill lies at
the scenic confluence of the Merrimack and Concord rivers, but
construction costs at the site have been prohibitive, city officials say.
Lawrence Mills, which sits on prime real estate, sandwiched between the
Tsongas Arena, LeLacheur Park and the Merrimack River. After years of
lying empty following two large fires that gutted the building, there are
signs of development life at the seven-building complex.
Plans called for turning Canal Place III into a $13 million mix of
state-funded low-income units and market-rate housing, but Coggins
said the joint venture between the city and Boston-based Winn
Development Co. recently fell through when the developers concluded it
lacked enough market-rate units to make ends meet.
"Unfortunately, if you try and strike a balance, the numbers don't work,"
he said.
Massachusetts Mills III lacks the parking necessary to serve additional
residents. One of its two buildings must be knocked down to create
parking space, Coggins said. Such a proposal had an estimated price tag
of $17 million three years ago.
"Obviously, rents are the best they've been, but chances are you still
couldn't float a $17 million loan," Coggins said.
Mass Mills owner Joseph R. Mullins could not be reached for comment.
Developers who want to turn their mills into commercial space face a
different challenge, as well.
To get a bank loan, they must line up tenants beforehand, but most
potential tenants want space right away, not years down the line.
"It's tough," Coggins said.
All is not gloom and doom, however.
Wannalancit Mills, 425,000 square feet of office and research space next
to the Tsongas Arena, is 90 percent occupied and thriving, said John
Dayton, its general manager.
"When we came here, there was no Tsongas Arena," Dayton said. "That
was an old mill. There was no ballpark. ... These things were being
planned, but there's a difference between being on the planning board
and actually being done. There was a lot of risk."
More than six years later, Dayton sees many positive changes and much
promise for Lowell's old mills.
Ed Barry, an owner and manager of the Boott Cotton Mills, a
500,000-square-foot mill complex off French Street, agrees.
His complex consists of three mills the fourth is owned by the Lowell
National Historic National Park and houses the Tsongas Industrial History
Museum forming a quadrangle around a quaint interior courtyard.
Already, Boott Mills has renovated and occupied all 90,000 square feet of
the South Mill, the complex's smallest. About 7 percent of the
200,000-square-foot West Mill has been turned into commercial office
space, which is partially occupied. Plans call for renovating the remainder
of the building within two years.
Work on the vacant, 224,000-square-foot East Mill is expected to begin
this year. Barry said 150 market-rate residential units are planned for
that site.
"There's a strong demand for housing in Lowell right now, and the office
market is relatively soft, but whatever we have built for offices is
occupied, " he said.
Indeed, if not for the steady increase in Lowell housing prices, projects
like the Boott Mills' East Mill may never have gotten off the ground,
Councilor Martin said.
"The market has never been at a point where the costs would justify
doing this, but now you've seen a strong residential market for many
years," he said. "That's what spurred the interest in these developers."
City officials hope such demand will help transform the Lawrence Mills a
13-acre site housing 400,000 square feet of space into a coveted
condominium complex.
In April 2000, Riverfront Properties LLC, a partnership between Boston
developer Edward A. Fish and the housing development arm of the
National Association of Government Employees, submitted a $39 million
proposal to build housing at four buildings on the site.
Under an agreement between the city, state and the developers, the
remaining three buildings would become part of UMass Lowell, which
purchased the mills for expansion in 1990 before the project became
stonewalled by fire damage.
Diana Prideaux-Brune, a UMass Lowell economic development adviser,
said the largest mill will be home to the new $20 million Graduate School
of Education and related operations. The mill's former administration
building will be turned into a $3 million faculty-alumni club.
There currently are no plans for the third university-owned building.
Riverfront Properties has yet to formally ink a deal for the property, and
city officials propose giving the developers a loan of up to $3 million loan,
from a pool of federal seed money to which Lowell has access, to grease
the project's wheels.
City councilors must give final approval to the deal and are expected to
vote on it later this month.
Michael Lafleur's e-mail address is mlafleur@lowellsun.com .
This story ran in The Lowell Sun on 1/5/03.
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