GEOFF MILLERD
Brokered sale
After selling their stake for $66 million, Taurus Investments of New England is finally gone from the Assembly Square Mall in Somerville, but they will not be forgotten, according to Thomas M. Garesche, who helped Federal Realty Investment Trust take over the 39-acre property last week.
“They worked hard with the city and did their best to meet the needs of the neighborhood,” said Garesche, who oversees acquisitions from New England to northern New Jersey on behalf of Maryland-based Federal. Permitting and approvals for the ambitious mixed-use plan his firm is about to undertake were forged due to the tenacity of Taurus and its latter-day partner, Gravestar Inc., noted Garesche, while much of the construction slated to occur will be based on the $700 million plan the sellers envisioned through Goody Clancy architects.
Garesche, who previously worked for the Flatley Co. and HRPT Properties Trust, said he is quite familiar with the Assembly Square Mall site, having evaluated its prospects when the property first began to struggle in the early 1990s. Those woes began barely 10 years after the one-time Edsel assembly plant was converted to a mid-sized regional shopping center anchored by a KMart. Although that formula failed miserably, Garesche said he believes the right approach will allow a range of commercial and residential uses to succeed.
“It’s great real estate, and we have high hopes in getting [the master plan] completed,” said Garesche. Prior to the sale, which Banker & Tradesman was first to report on its Web site, www.BankerandTradesman.com, last Tuesday, the Assembly Square LP formed by Taurus and Gravestar had already begun converting the mall into a power center format, with the firm having leased 250,000 square feet of space in the past six months to such retailers as the Sports Authority, Staples and the Christmas Tree Shops. Bolstered by the leasing campaign from broker David Nugent of American Retail Properties, the renovated mall is slated to open in September.
Ancillary retail will be constructed across the street, along with 240 residential units in an attempt to create a 24/7 environment, said Garesche, while an even larger development will be launched closer to the Mystic River. Located on two properties acquired from Taurus/Gravestar on Sturtevant Street and a city-owned parcel to which their Sturtevant Partnership was given development rights for in 2001, that undertaking will create another 1,400 residential units and millions of square feet of office and research space while reshaping the gritty area with new streets and landscaping.
Assembling the Pieces
Redevelopment of the Assembly Square Mall site has been “a long time coming,” said Garesche, who praised the area’s strong demographics and location close to downtown Boston. Cut off from the hulking Interstate 93, which split Somerville in half decades ago, the Assembly Square area is already benefiting from recent infrastructure changes such as the Big Dig and a new exit at Route 99, while Garesche said he thinks it will be greatly served by a new transit stop on the MBTA’s Orange Line that will be built as part of the Sturtevant Street plan. Heretofore difficult to reach on foot, that area known as Yard 21 will be accessible to the public when the station opens, with Garesche noting that the concept supports the state’s recent support of so-called smart-growth development.
Garesche referred specific questions about the Assembly Square development timetable to Federal Realty’s Maryland headquarters, but efforts to contact officials there by press deadline were unsuccessful. Garesche did unveil that the firm will be opening a Boston office, partly due to the Assembly Square venture, but also reflecting the firm’s continued interest in the region, which already includes ownership of several other retail centers in eastern Massachusetts. Joined in partnership with an ING investment group, Federal owns property in Bridgewater, North Reading and Weymouth, and is said to be eyeing other opportunities in the market as well. Although he would not provide details, Garesche acknowledged his firm’s interest in considering other deals locally.
Prior to last week’s bombshell deal for Assembly Square, the public real estate investment trust was an unfamiliar name locally, Garesche acknowledged. “People are just getting to know Federal,” he said, even though Garesche is quite familiar in Hub real estate circles for his retail expertise.
While concurring that Taurus often found itself at odds with certain factions Somerville during its seven-year run at Assembly Square, including one instance where the relocation of a Home Depot to the property was quashed by a neighborhood lawsuit, Garesche said he has no trepidations about dealing with the community. The firm, he said, will stand on its laurels, including several award-winning mixed-use developments created in the mid-Atlantic region in recent years that contain many of the elements planned for Assembly Square.
Taurus President Peter A. Merrigan also predicted smooth sailing ahead for Federal, maintaining that the biggest battles have already been waged and praising the new city administration led by Mayor Joseph Curtatone for helping the process along. And while it may have been tiring at times, Merrigan said he is “thrilled” by the economic outcome of the sale. After buying the mall itself for $18.9 million and the Sturtevant parcels for about $11 million, the holdings sold for about $66 million, said Merrigan. The deal was brokered by Cushman & Wakefield of Massachusetts President Robert E. Griffin Jr. and retail specialist Geoff Millerd.
