| A decade ago, the notion of turning a declining industrial neighborhood in Chelsea into a bustling hub of trendy apartments and lofts seemed like a steep uphill battle.
The housing collapse raised the hurdles higher, but a pair of private developers and a community development corporation pushed forward with a group of projects collectively known as the Box District. The nine-year endeavor has added nearly 250 apartments and condos to a quiet side street named Gerrish Avenue.
The buildout is culminating in The Flats at 22, the final phase scheduled to open in January, where two-bedroom apartments are expected to rent for over $2,000 a month. Developers are confident they can replicate the success of the Atlas Lofts complex that opened in 2010, where 53 apartments built in a converted mattress factory were leased in less than three months.
“Once people got here, they fell in love with the building and I imagine it’s going to be the same thing that will happen,” said developer Dave Traggorth, who is partnering with Boston-based Mitchell Properties on The Flats at 22.
The Box District’s transformation took a circuitous path. Plans were rewritten to reflect changing market conditions, and developers took advantage of a variety of public incentives. Some of the aging buildings were rehabilitated. Others were razed and replaced using the latest modular building techniques. It ended up giving the area the look of an old-fashioned city block rather than a master-planned development.
“It doesn’t feel like one property,” said Ann Houston, executive director of The Neighborhood Developers of Chelsea. “It feels like a neighborhood that was able to develop as separate spaces. It’s a more naturally-occurring community.”
Vision For A Neighborhood
The Box District was one of two projects recently recognized by an Urban Land Institute award as a model mixed-income housing development.
The Neighborhood Developers, a nonprofit community development corporation, began laying the groundwork in 2005. Previously the group had concentrated on individual affordable housing projects.
The vision for Gerrish Avenue was more ambitious: creating an entire new neighborhood containing a mix of market-rate and affordable apartments and condos.
TND brought on Mitchell Properties as the private developer for one key parcel that it had acquired for $2.5 million – the Spring Air Mattress factory, originally slated for a condo conversion starting in 2007. The housing collapse put those plans on ice, but Mitchell changed course and moved forward with a loft apartment concept.
Atlas Lofts hit the market in August 2010 and was 100 percent leased within three months. Average rents have risen from $1,400 to $1,600 in the past four years, and the property remains close to full occupancy.
“People recognize they can be 15 minutes from Boston and their rent starts with a ‘1,’” said Traggorth, the developer. “That is a huge draw.”
On the opposite side of the street, TND was moving forward with Janus Highlands, a 41-unit affordable apartment complex built at the site of a former metal fabricating plant that it bought for $530,000. That was followed in 2010 with the $1.3 million purchase of the Sudbury Brass Goods property, which would become the 32-unit Highland Terrace apartments.
Developer Goes Modular
For the final two projects, The Flats at 44 and The Flats at 22, Mitchell Properties used a combination of public incentives and modular construction techniques to make the financing work. A one-story warehouse was demolished to make room for the two buildings, made of components shipped from South Paris, Maine-based modular housing manufacturer KBS Building Systems.
Modular techniques cut the construction timetable to roughly eight months, Traggorth said, and reduced costs by up to 15 percent. He estimated the hard costs for the Flats at 22 at $150 per square foot.
The project also received tax credits under the state’s Housing Development Incentive Program, which encourages developers to build market-rate housing in the 26 post-industrial communities designated as Gateway Cities.
But perhaps the biggest boost for the Flats’ future prospects came in September, when state transportation officials approved the first construction contract for extension of the MBTA’s Silver Line dedicated busway from Logan International Airport to Chelsea. A station will be located steps from the Box District, with an estimated 15-minute commute to Boston’s Seaport District.
The prospect of transit-friendly commutes to downtown validates the strategy of building market-rate units, Traggorth said.
“In Chelsea, you used to need a lot more tax credits and public financing support than you do now,” he said. “The market has increased and Chelsea has become a really attractive place to live.”
Email: sadams@thewarrengroup.com
