When MassDevelopment recently pitched development opportunities in the state’s gateway cities to a room full of Boston developers, the agency had a shining success story to share: Worcester. The city, the developers were told, was evolving because it had figured out how to leverage growth out of its affordable housing stock and academic institutions.
City Manager Michael O’Brien is the man charged with pushing that growth forward, and he’s using every tool he can get his hands on. Worcester was the first city in the state to deploy Tax Increment Financing and District Increment Financing. It was the first to put an expedited permitting process in place, and the first to use receivership to staunch foreclosure-related blight. O’Brien recently sat down in his City Hall office to talk to Banker & Tradesman about moving forward in the face of an economic downturn.
Michael O’Brien
Title: City Manager of Worcester
Experience: 5 Years
Age: 43
What’s Worcester’s economic development strategy, and how have you gone about pursuing that plan?
It really is capitalizing on Worcester’s strengths and assets, and its success through time. Our goal is not to be Boston or Providence, but to focus on our greatest of strengths – historically, high-end manufacturing, finance, bio-sciences, life sciences, health, and colleges and universities. Combined, they provide a measure of stability through the years.
How do you build bridges that leverage institutional growth into public growth?
The institutions realize a successful mission on their part is tied to a successful community around them. You see something such as Dr. Mello, a Nobel Prize winner, with the research he’s done, working with UMass Medical, they’re looking for a research base here in the city, and you combine that with our work in Gateway Park, taking a former brownfields site and creating pad-ready sites for this type of activity – you see the connecting of the dots.
So is the success of Gateway Park tied to UMass Medical’s expansion?
It’s tied to [Worcester Polytechnic Institute]; it’s tied to the success of [RNA interference (RNAi)]; it’s tied to other commercial real estate development in downtown; it’s tied to the success and stability of our neighborhoods. It’s the circle of life. That’s what sustains the city. There’s not one piece that defines it.
What does the timing of CitySquare look like now?
Even in difficult economic conditions that we’re in, the project will proceed. It may take us more phases to get to the ultimate vision. You’ve got to break it down into achievable segments now. We’re all aware of the credit market challenges. We expect phase 1A will go forward, demolishing the existing mall and half of the garage. New streets and blocks will be created. We expect the first building of 180,000 square feet of new commercial space. That will start this summer.
Berkeley Investments’ Young Park has said a complex project like CitySquare needs to be a public-private partnership. How difficult was it to get to that point?
We still need to keep in mind that these are taxpayer dollars. They need to leverage defined goals like job creation and net new investment to create tax revenue. Checks and balances are key. In the not-so-distant past, there was a tendency to look at a project unto itself – like the mall project – as being a silver bullet. Thinking, “And if this happens, then success will be ours.” It’s got to be much more methodical. Even CitySquare is a catalyst. It builds off other strategic investments, public and private, but it won’t be a standalone.
What results have you seen since you started using receivership to fight foreclosures?
It’s not one dimension. It’s multi-pronged, and it has to be. It starts with our ability to track and monitor – watch where the trends are, where these properties are concentrated, how many more are coming online, how quickly – and retool government to bring about compliance wherever possible. When we do have tenants in the building more than willing to pay rent, they just want to know who to pay it to, they want to have a roof over their head, we see receivership as part of that multi-faceted multi-pronged effort. We’ve continued to stabilize the neighborhood in the short term: those families have a roof over their head. And we continue to unravel and sort through this disaster created by lack of regulation and complete denial of responsibility within corporate America and at the highest levels of government.
We’ve used the process of receivership to bring owners back to the table, and have them actually bring those properties back to standing – just, by the reality of us being willing to pursue this, it brings back to the table those that up until then lacked the very basics of ownership responsibility. It’s snapped them back to attention. It’s unfortunate that we’re in this predicament, but we’re not going to stand by and wait for others to sort this out. There’s too much at stake.
Michael O’Brien’s Top Five Development Projects In Worcester:
1.) CitySquare – a $560 million private/public commercial and residential real estate project in the heart of downtown Worcester
2.) Gateway Park – a state-of-the-art destination for life sciences and biotech companies, research and development and educational institutions
3.) Washington Square – the redevelopment of four new parcels of land for commercial use in and around the historic Union Station transportation center
4.) South Worcester Industrial Park – an 11-acre industrial development site for manufacturing re-use, including a 50,000 square-foot biomedical research and development facility
5.) Federal Square – the south end of downtown Main Street with the opening of the Hanover Theatre for the Performing Arts, loft-style apartments, new restaurants and outdoor café-style dining.
