YOUNG K. PARK
‘Unique opportunity’
Broker David L. Pergola never had to get physical, but it proved quite a chore convincing client Young K. Park to consider buying in downtown Worcester.
“I said, ‘I’m not interested in anything outside [Interstate] 495,'” the president of Berkeley Investments recalled last week. But after Pergola “literally dragged us to Worcester” earlier this year to look at the failed Worcester Common Outlets Mall and several surrounding properties being shopped by Cigna Corp., Berkeley eagerly joined a dozen of investors chasing the asset, a pursuit that the Boston-based company ultimately won with a bid said to be in the low $30 million range.
Slated to close on the deal this week, Berkeley will hold a ceremony next Tuesday to fete its ambitious $300 million redevelopment strategy, a concept calling for a mix of retail, housing, office and entertainment uses to be constructed during the coming decade. Work would begin in earnest in the spring of 2005, Park estimated, with full build-out over seven years.
“It’s a unique opportunity to put a mark on a major city in New England,” Park said of his firm’s enthusiasm for the 22-acre complex, which is situated in the heart of the region’s second largest metropolis. Besides the prospect of improving a city torn asunder decades ago by urban renewal, elements promoting so-called smart growth design have helped win support at the state and local levels. The approach is in keeping with Massachusetts Gov. Mitt Romney’s goal of reusing urban sites to spare greenspace and promote public transportation, said Park.
“They have impressed people,” Worcester development chief Philip J. Niddrie said of Berkeley, explaining that the company’s vision is in lock-step with ongoing efforts to create an 18-hour environment. Market-rate housing is sorely needed to accomplish that feat, Niddrie said, adding that the mix of 900 units of housing and revitalized retail and entertainment space proposed by Berkeley speaks to the city’s plans. That was not by accident, he said, given that Berkeley staffers attended several planning sessions once interest in the property was piqued, including a two-day charette held to create a blueprint for future downtown development.
“The timing couldn’t have been any better,” said Niddrie, with the city having previously retained Sasaki Assoc. of Watertown to oversee that larger planning overview, an outlook covering an estimated 120 acres surrounding the Berkeley site. Arrowstreet Inc. of Somerville has been engaged to design the new complex for Berkeley. The undertaking includes demolition of some retail and parking spaces to make way for newer versions, plus construction of a 10-story residential tower and a pending 10-story office building made feasible by activity from the nearby Worcester Medical Center. According to Park, the firm is negotiating a possible lease of that entire building.
Relocation of Saint Vincent’s Hospital into a sprawling downtown facility was one of several initiatives aimed at breathing life into Worcester’s central district in recent years. Niddrie and others acknowledged that the effort faces its challenges, such as convincing the community’s 35,000 college students to utilize their backyard vs. eschewing Worcester for action in Boston or nearby Providence, R.I.. Worcester is restoring an old multi-plex movie theater to attract live entertainment, and has just received $6.8 million for overhauling the Worcester Common public space to encourage gatherings. An ice rink is among the plans, while Berkeley is developing a public park as part of its environmentally focused approach.
Sending a ‘Signal’
Worcester’s inherent drive to improve is among its drawing cards, said Park, citing the $38 million overhaul of historic Union Station and a number of capital and streetscape improvements as proof that the city is doing its part. Niddrie credited Pergola for securing a buyer that shared Worcester’s commitment, and for Meredith & Grew’s willingness to work with city officials throughout the process. For Niddrie and Mayor Timothy P. Murray, June will be a busy month. The Berkeley ceremony on Tuesday will be followed by groundbreakings for a $22 million Hilton Hotel and a 400,000-square-foot state courthouse. Construction of a new bus terminal and a parking garage are also on Worcester’s plate, while Sasaki is expected to produce its downtown blueprint by the end of the month.
Pergola, who represented Cigna in the sale, said he is not surprised by the smooth beginning to the relationship. Among the more complicated real estate properties available, Pergola said he felt Berkeley was the right buyer to juggle the complex, particularly given Park’s extensive background in city planning prior to launching Berkeley in 1990. Park “has a great vision for the project, and it fits in with what Worcester wants to do,” said Pergola. “I think [Berkeley] will do very well with it,”
Starwood Capital of Connecticut is buying the Worcester property in conjunction with Berkeley, continuing a longstanding relationship between the two entities. As for Park, he said he believes the redevelopment will go a long way toward reconnecting the various elements of downtown Worcester, a notion shared by Niddrie. Part of the overhaul, for example, involves the restoration of certain streets that had been there prior to the mall’s development by the Beacon Cos. in the 1970s. That will allow access between downtown and the city’s East Side.
“In essence, we are rebuilding the street network,” said Park, expressing a desire to kick the process off over the near term. Income from 450,000 square feet of existing office space and some retail will generate cash flow while pre-construction work continues, but Park said the new ownership wants to prove that it can be a factor in revitalizing the community. “Worcester needed a project to signal that it is a new city,” he said. “Our project will play that role, and we all look forward to that.”
