Lawrence’s mill makeover gets a second start
INTRO TEXT Monarch on the Merrimack, a mill makeover once viewed as a potential linchpin to the revival of Lawrence, is trying to get back on track. The massive redevelopment project, the focus of a CommonWealth cover story (see “Thinking Big,” CW, Summer ’07), lost its way last year, the victim of a downturn in the real estate and lending markets and, according to developer Bob Ansin, unfounded reports of asbestos in the former mill.
The project, retooled for the times, is now trying to rise from the dead. Originally slated to include 600 “eco-luxury” condominiums in a mixed-use development boasting a private park, cyber-café, and geothermal heating system, today it’s being reworked into a rental project of about 200 units, with monthly rents that will range from $1,100 for a studio apartment to $2,500 for a three-bedroom penthouse. The environmentally friendly aspects of the project remain intact, along with the retail and entertainment components, but the on-site park has been scrapped. In addition, a portion of the property has been sold to another developer for use as commercial and office space.
Five years ago, Ansin purchased the former Wood Mill, a 1.3-million-square-foot structure where the famous Bread & Roses strike took place in 1912, for $4.4 million, and plans for Monarch on the Merrimack began to take shape. In its original form, the project seemed to offer something for everyone: a market-rate, mixed-use, eco-friendly development that would bring hundreds of stakeholders to a city where affordable rental units are the norm. In addition to greatly expanding the municipal tax base by renovating an oversized mill in a prime location, the project was expected to spur the growth of nearby businesses. These, it was believed, would spawn new employment opportunities for local residents.
Construction was well underway last year, and about 60 buyers had made deposits on condos that ranged in price from $190,000 for a 900-square-foot studio to more than $500,000 for 2,300 square feet of space in a three-bedroom penthouse. Owner-occupancy of the units was the goal. Buyers needed to sign affidavits promising that only they or immediate family members would occupy their space; the condos could not be rented or sold to investors.
But when financing fell through, Ansin, who had already invested $25 million of his own money in the project, says he felt he was out of options because condo projects had lost favor with investors. The stranded buyers were refunded their deposits.
Construction is now scheduled to resume in November, financed through loans as well as state and federal historic redevelopment tax credits. Ansin received $1 million worth of state credits in August, but the credits require him to rent out the units for at least five years. After that he’ll be free to convert them to condos, which he says he’s open to doing if the market picks up and buyer interest is there.
Ansin also received $5.8 million for the sale of about 370,000 square feet of the property to developer Sal Lupoli, who owns the Riverwalk, an adjacent development with a mix of more than 200 commercial and office tenants. Ansin says Lupoli has also pledged to purchase an additional 400,000 square feet of the property by early 2009. He says the deal benefits both parties because it was costing him money to carry the unused space, and Lupoli was ready to expand. Ansin will continue to focus on the residential piece — along with about 80,000 square feet of nonresidential space — while Lupoli continues with his current emphasis on commercial and office space.
For his part, Lupoli says the Riverwalk will benefit from being located next to a building that is fully, rather than partially, occupied, and he states that he is now actively showing the space. “What we want is for the building to be leased out as soon as possible,” he says.
Dave Abdoo, a Lawrence city councilor who chaired the planning board when Ansin’s original project was approved, is one of many offering rounds of praise for the developer’s willingness to bring the project to fruition one way or another, and he cautions against making comparisons to what might have been. In his view, the benefits of the revised plan should be measured against the benefits garnered from the property as it is today. “We’ll realize far more tax dollars with rentals than we would have if the place remained what it is now, which is essentially cold storage,” he says.Abdoo also expects that the incoming tenants, whom he envisions as mostly empty-nesters and young professionals looking for a reasonable commute, won’t tap much into city services like schools. And since the building’s rents will be on the upper end of housing costs in Lawrence, he believes the newcomers will have money to spend on local restaurants and other amenities — a major promise of the original plan. What’s more, the project, located directly across from an MBTA station, will fill a vital need in the state, according to Dave Tibbetts, a former director of the state office of economic development and a co-founder of the Merrimack Valley Economic Development Council. That would be the creation of residential units for young professionals, which Tibbetts sees as a kind of workforce housing for commuters.
Still, Abdoo recalls that when he served on the planning board, he frequently sat before developers who wished to create rental developments in Lawrence. “I’d ask them, ‘Why not homeownership?’” he says. “The problem is that there aren’t state incentives to create homeownership [projects], and that’s an area where this city needs to make gains. Lawrence is 75 percent rentals, and that’s not where we want to be as a community.”