Where does a homegrown, ostensibly agrarian organization like the New England Farm Workers’ Council get the greenery to purchase some prominent properties in downtown Springfield?
As it turns out, the money comes from an extensive real estate portfolio the group already owns, as well from a multitude of services offered to low-income families and individuals in Western Massachusetts and beyond.
The council’s several real estate holdings provide cash for those programs, which include the largest childcare voucher program in Western Massachusetts, job training for migrant and seasonal workers, and a federally funded youth mentoring program.
Now, the farm workers’ council is planting itself even more firmly in Springfield as it moves to purchase additional properties in the commonwealth’s third-largest city. A deal to acquire Springfield’s Paramount Theater is scheduled to close later this month, according to John Motto, the group’s chief financial officer. He declined to disclose terms.
Making The Investment
In October, the council bought a 56,000-square-foot property at 10 Fort St., which houses the city’s famed Student Prince restaurant, for $2 million. With the addition of the Paramount, the group will own a portfolio of six Springfield properties.
“I’m glad to see that they’re making the investment downtown,” said Kevin Sears, 2010 president of the Massachusetts Association of Realtors and a Springfield-based broker. “We need folks that are willing to invest in downtown to keep it vibrant. You’re seeing activity in the properties downtown, and that will only help out with the Main Street corridor.”
The addition of the Fort Street building marks the third property in their portfolio that will be entirely leased to companies without ties to the council’s programming. The farm workers’ council is still deciding whether it will develop the building into retail, office or mixed-use space, Motto said. It is also unclear what the council plans to do with the Paramount once it acquires the building.
“The Student Prince was abutting to [our Hampden Street headquarters] and we felt it was a good deal to buy it for the price, and we’re still trying to formulate the plans on what we’re going to do with the building,” Motto told Banker & Tradesman. “We’re still trying to figure out what we’re going to do with [the theater]. We own basically two square blocks of buildings in the area. We’re seeing what we can do to revive this end of the city. We want to bring the city back to life. It needs some stimulus.”
The council has spent about $12 million on property acquisitions and equipment in Springfield and nearby Holyoke, where it owns the six-story 225 High St. The group has spent about $10 million in Springfield alone, Motto said. When asked if the council has plans to purchase anymore properties, Motto said that currently they do not.
“But tomorrow that could change,” he added.
Removing The Shadow
Not all social services-oriented organizations see themselves as landlords or drivers of local economic development initiatives. The Springfield-based Center for Human Development, which serves persons with disabilities, owns 22 properties – only three of which are for non-organizational uses. Most serve as residences for clients, said Hank Drapalski, the nonprofit’s vice president for business planning and analysis.
“It’s not our primary business,” to be a landlord, Drapalski said. “We acquire property for our primary use, which is our programs.”
But Doug Macmillan, president of Macmillan and Son, a Springfield realty services firm, said there are benefits to groups purchasing their own properties, including the elimination of uncertainty over what would happen to the buildings otherwise.
“It’s a good thing that [the farm workers’ council] purchased both [the Paramount and Fort Street properties],” Macmillan said. “It kind of takes away that shadow of what’s going to happen with the buildings … versus them just sitting there as [assets] without a purpose.”
Both properties could also serve beneficial uses for the city, in addition to housing commercial tenants and council programming, Macmillan added.
“The theater lends itself well to some forms of continued usage for entertainment, and I think Springfield is ripe for continuation and the expansion of arts themes, whether that means a gallery or performing arts studio or concerts,” he said. “It’s right in central downtown.”
