Developer Normandy Real Estate Partners recently sold the new TripAdvisor headquarters in Needham for $133 million and now proposes an additional $300 million mixed-use project on nearby parcels.
Needham changed its zoning to allow taller buildings along Route 128 and snagged TripAdvisor as a trophy tenant for a tired business park.
A subsequent $300-million phase of development would transform a three aging research and development buildings into two office buildings totaling 423,000 square feet and a 128-room hotel, with plans for 390 apartments waiting in the wings.
Normandy Real Estate Partners’ latest plans are part of a continuing effort to update low-density office parks and create some of the energy and walkability of downtown neighborhoods. It’s the largest in a series of development projects along the N2 Innovation Corridor, a 500-acre section of Needham and Newton just east of Route 128. TripAdvisor’s old Newton offices are being converted into retail space, while Newton officials and a developer are clashing over an attempt to build housing in the Wells Avenue office park.
TripAdvisor’s new global headquarters, which opened in June, is the most visible symbol of the N2 Corridor’s changing landscape: a 282,000-square-foot monument to hip office space and tech employment growth in the suburbs.
“The environment that has been created there and the buzz that’s been created by TripAdvisor opening, people have taken notice,” said Mark Roopenian, a principal for Normandy.
The Elkus Manfredi-designed collaborative offices are a contrast to the surrounding buildings within Needham Crossing, a 185-acre former Needham Business Park built by developer Cabot, Cabot & Forbes in the 1950s. The older single-story structures are occupied by a wide range of tenants from life science researchers to day care facilities, a FedEx shipping center and Coca-Cola bottling plant.
Aided by a $1.8-million local property tax break spread over 13 years, Normandy developed the TripAdvisor parcel before selling it to an affiliate of U.S. Realty Advisors for $133.2 million in June.
Normandy is now turning its attention to the adjacent General Dynamics Mission Systems’ R&D facility, which it acquired late last year for $54.5 million.
A special permit application submitted to the town’s planning board in late July calls for redeveloping the existing buildings at 77 A St. and 189 B St. into two office and R&D buildings totaling 263,653 and 160,000 square feet, respectively. The office building at 156 B St. would be demolished for a 91,335-square-foot hotel and 19,000 square feet of retail space.
Needham selectmen already have endorsed the developers’ plans for a 390-unit 40B apartment complex on 5 acres. The developers are awaiting state approval before seeking local permits.
“A part of Needham’s vision is that we understand you have to have housing to attract economic development,” said Devra Bailin, the town’s economic development director. “It can no longer be viewed in a vacuum.”
A Corridor In Transition
The development activity moves forward while the N2 Innovation Corridor, a public-private initiative to encourage economic growth in the market, prepares to begin a year-long competitiveness study. This month the group received a $50,000 grant from the U.S. Economic Development Administration, which will be matched by $50,000 from developers, businesses and nonprofits along with the two communities.
The study will assess which industries have the most potential to grow in the market and promising locations to recruit new companies from, said Greg Reibman, president of the Newton-Needham Chamber of Commerce.
Lack of direct public transit access is one obvious drawback in an era when many companies consider it a non-negotiable requirement to recruit qualified young employees.
But two highway projects have the potential to ease auto commutes. Completion of a new exit ramp to Kendrick Street is expected by October 2016, offering direct access to Needham Crossing from Route 128 northbound traffic.
And the Boston Regional Metropolitan Planning Organization recently accelerated the timetable for a $14-million upgrade to two miles of traffic-snarled Needham Street and Highland Avenue, with work beginning in 2018. The project would widen the two streets from Webster Street in Needham to Route 9 in Newton.
Developer, Newton At Odds Over Wells Avenue
In contrast with Needham officials’ support for housing at Needham Crossing, Newton aldermen have opposed a 334-unit Chapter 40B project in its Wells Avenue office park. The board has challenged developer Cabot, Cabot & Forbes’ plans for the Boston Sports Club site at the state Housing Appeals Committee.
In May, Cabot, Cabot & Forbes offered $2.75 million in exchange for the aldermen dropping their opposition. The money was earmarked for a new intersection of Wells Avenue and Nahantan Street, a known bottleneck, along with a private shuttle service and support for affordable housing. The city has not responded to the offer.
“If you look at Wells Avenue park, it has no amenities, it has no workforce housing, it has no thoughtful in-place transit connections. We think there can be a robust shuttle connection there,” Cabot, Cabot & Forbes CEO Jay Doherty said.
Dori Zaleznik, the city of Newton’s chief administrative officer, declined to comment, citing the pending appeal of the 40B project.
Doherty said the park’s office rents reflect its decline, with most of the recent lease renewals in high $20 per square foot gross range.
“Some people say Wells Avenue is healthy because it’s 100 percent occupied,” Doherty said. “My answer is I can 100 percent occupy anything if I give it away.”
Nancy Hyde, Newton’s economic development director, estimated the park’s occupancy at 90 percent and said the low vacancy rate is generating demand for expansion.
At 2 Wells Ave., collection agency CCS Cos. received the aldermen’s approval on Aug. 10 to expand its office building from 68,740 to 132,598 square feet. The additional space will be leased to new tenants, Hyde said. Another property owner has indicated preliminary interest in expansion, she added.
On Needham Street in Newton, Waltham-based Crosspoint Assoc. is moving forward with repositioning of the three-building former TripAdvisor headquarters. The two office buildings closest to the road will be converted into primarily retail space. Kerry McCormack, Crosspoint’s director of development, said the company is close to finalizing leases with two anchor tenants.
