Chelmsford’s move two years ago to rezone more than 600 acres of commercial property to allow more varied uses – in an attempt to adapt to changing real estate times and to keep its property tax rolls up – is already paying big dividends.
Over the past year, two new multifamily projects totaling about 275 housing units have been approved by the town. A 13,000-square-foot retail proposal is now sailing through the planning process.
Meanwhile, Digital Federal Credit Union (known by its brand name DCU) has purchased an office building previously owned by tech company Kronos Inc. and has already moved 120 employees into the facility. Other office buildings formerly occupied by the departed Kronos and Mercury Systems have been purchased by new owners with various plans for possible repositionings, and other previously vacant office buildings in town have been filling up with new tenants.
The bottom line: Chelmsford, which has rechristened what was previously referred to as the “129 Corridor” into the “Cross Roads at Route 129,” seems to be successfully pulling off the transformation of single-use office parks into mixed-use areas at a time when companies and their employees are increasingly demanding more urban-like “live, work, play” settings for their operations.
Evan Belansky, director of community development for the town of Chelmsford, isn’t yet declaring victory in the latest battle by a suburban town to breathe new life into older single-use office parks that have fallen out of favor by tenants looking to get closer to Boston and its urban amenities.
He noted that the Cross Roads corridor still has about 600,000 square feet of vacant office space, out of a total of 6 million square feet. But that’s now around the 10-year vacancy rate average for Chelmsford – and Belansky expressed optimism that more housing and retail developments will eventually come along.
“We’re getting there,” said Belansky of Chelmsford’s mixed-used push. “Our strategy is: We know we’re a suburban market and we’re not trying to turn it into an urban market. But we want more urban-like amenities that will attract and keep companies.”
Luring Multifamily Developers to Town
Developers and others in the commercial real estate industry are praising Chelmsford for acting decisively two years ago when it approved a new business overlay plan that’s cleared the way for different types of developments, specifically multifamily housing and retail, in the area near the intersection of I-495 and Route 3.
“Our projects are a direct result of the overlay move,” said Katie Enright, a civil engineer and manager of the Chelmsford office of Howard Stein Hudson, a transportation, planning and engineering firm that’s representing Wescon Inc. on two projects in the newly renamed Cross Roads at Route 129. “Chelmsford is absolutely doing all the right things.”
Wescon, going under the development name of Kinloch, is currently clearing previously vacant land at 104 Turnpike Road in the overlay district as it prepares to construct 168 units of multifamily housing. Wescon has also proposed building a 13,000-square-foot retail-restaurant project at 197 Billerica Road (Route 129).
Princeton Properties also received town approval to commence construction of multifamily housing at 282 Mill Road, also on previously undeveloped land.
Meanwhile, Marlboro-based DCU, with nearly 1,300 employees and $8 billion in assets under management, late last year purchased a 3-story, 129,000-square-foot building at 297 Billerica Road for $12.4 million. The building was previously owned by Kronos, which three years ago decamped from several Chelmsford office buildings for Lowell’s updated CrossPoint towers.
John LaHair, marketing manager at DCU, said the giant credit union “looked up and down 495” for a new facility for back office workers and future expansion. It settled on Chelmsford because of the quality of the former Kronos building and because of the “huge plus” of Chelmsford’s commitment to make Cross Roads a more “live, work, play” setting for tenants.
DCU has already moved 120 employees into 297 Billerica and plans to add more in coming years, he said.
DCU’s purchase, and move into, the former Kronos building is particularly gratifying for town officials, since it was the departure of Kronos and Mercury Systems that acted as a “wake-up call” for Chelmsford to do something about its outdated single-use office parks, Belansky said.
“That spurred the community to the timely adoption of the overlay plan,” he said.
Kronos and Mercury Systems’s abandonment of Chelmsford initially pushed the town’s vacant office space to as high as 1.1 million square feet three years ago,” said Belansky. With recent moves by DCU and other tenants into the town, however, that vacancy space is now down to about 600,000 square feet.
Greg Klemmer, executive vice president at Colliers International, said that some of the office buildings previously occupied by Kronos, Mercury and other major tenants still remain vacant in Chelmsford, such as 300 and 330 Billerica Road.
The bottom line is that many suburban office buildings in the 495 area are still a “tough sell” for companies pining to get closer to Boston, he said.
But Klemmer praised Chelmsford for acting to change the real estate dynamics in its town – and he expressed confidence its commitment to the mixed-use strategy is the right move.
Email: jayfitzmedia@gmail.com
