James Nicoletti – ‘Impressive site’
In what would be one of the largest industrial real estate deals ever in Massachusetts, Stop & Shop Supermarket Co. is negotiating to develop a major distribution and warehouse facility in Freetown, according to industry sources.
I do hear they are going to that site, one source said of Stop & Shop’s reported intention to build up to 1.5 million square feet at the Riverfront Industrial Park. Another source concurred, adding that the company would likely relocate its longtime distribution facility on the Dedham/Boston line to the Freetown property.
It seems like that’s the plan, said the source. If so, the departure could be considered both a positive and a negative for the city of Boston. Residents of the Readville section of the city have long complained about the impacts felt from the massive distribution operation, but the relocation would most likely be costly in terms of lost tax revenues. The current plant, where Stop & Shop has operated for decades, includes about 500,000 square feet of space. A portion of the operation is located in Dedham.
Stop & Shop met with sharp local opposition when it proposed expanding the Readville property in 1999. Although the company insisted the expansion would improve conditions for those living near the property, residents disagreed, with critics charging it would exacerbate noise, fumes and truck traffic for the neighborhood.
The company’s continued expansion in the grocery industry has fueled the need for a bigger facility, according to observers. Today the largest food retailer in New England, Stop & Shop has stores throughout Connecticut, Massachusetts, New York, New Jersey and Rhode Island. It was acquired by Royal Ahold in 1996, a Dutch firm that employs more than 300,000 people and operates some 4,000 stores internationally.
Calls to Stop & Shop at the firm’s Quincy headquarters were not returned by Banker & Tradesman’s press deadline, while the real estate broker representing the Freetown property, Charles T. Francis, also did not respond to inquiries. Francis is president of CB Richard Ellis, NE Partners in Rhode Island. The site would be developed by a Rhode Island company, Churchill & Banks. Boston Mayor Thomas M. Menino, who lives near the Readville plant, was out of town Friday and unavailable to comment on the potential move.
Traditionally, Freetown has been on the lower fringe of the state’s industrial base in Southeastern Massachusetts, a market previously concentrated in such communities as Taunton and Mansfield. In recent years, however, there has been a migration south toward New Bedford and Fall River. Part of the reason, according to Insignia/ESG Managing Director Richard S. Borden, is the solid labor pool found in that region, while increasing land prices to the north have also had an effect.
Others said the lack of land has been another factor, with large sites almost impossible to find in other parts of the state. Stop & Shop supposedly was close to doing a deal in Norton, for example, even reaching the point of having design documents drawn up, but the parcel ultimately was found to be insufficient to accommodate the use. Freetown, in contrast, has about 600 acres, with just over half of that developable.
It’s a really impressive site, said Insignia/ESG Managing Director James Nicoletti, who has had clients tour the property. Located along the Assonet River, the property is a former gas plant that was shuttered several years ago.
‘That’s Big’
Riverfront is one of two large industrial properties located in Freetown, with Braintree-based Campanelli Cos. currently in the process of developing the Campanelli Business Park, a 133-acre parcel acquired in 1999. That project recently scored a coup with the signing of Weyerhauser Corp. for a deal that encompasses 22 acres of the site.
In any event, the Stop & Shop distribution facility would make for one of the largest such operations in New England, agreed Robert Nahigian, president of Auburndale Realty Co. That’s big by anyone’s standards, said Nahigian. His firm handled the Weyerhauser negotiation, one that also was difficult to place due to its size.
Borden said there are only a handful of properties in the state that could handle such large requirement specifications, but added there are efforts to create more industrial opportunities throughout the region. Fall River is looking to expand its industrial park, while the New Bedford Business Park is about to begin a sizeable expansion effort that would extend into neighboring Dartmouth. Using a $1 million state grant, the park’s operators will open up two new roads that will provide access to another 120 acres of land, much of which will be available by mid-summer.
As with the rest of the real estate industry, activity has been slow in recent months for industrial properties, although Borden said much of that sluggishness could be attributed to a normal seasonal decline in business. There are already signs that demand is starting to build, he said, especially in the New Bedford area.
I think we’ll start to see some real action in the early spring, he said. If the Freetown deal is consummated, that will further ratchet down the options for available sites, Borden noted.
