CitySquare, a $564 million redevelopment of a former downtown mall, remains the cornerstone of Worcester’s hoped-for downtown revitalization despite a lack of interest in offices at the proposed transit-oriented location.
No takers.
The cornerstone of the city’s latest effort to rejuvenate the downtown is CitySquare, a $564 million redevelopment of the former mall. Berkeley Investments has held out the hope of replacing the shuttered shopping center with a mix of medical and professional office space, condominiums, restaurants, retailers and theaters within steps of the MBTA’s commuter rail.
But a lack of interest in offices at the proposed transit-oriented location has forced the Boston-based developer to cut the project’s initial Class A space component in half.
Worcester Mayor Konstantina B. Lukes, who has expressed skepticism over the project, said she is unhappy with the latest setback.
“Taxpayers are clearly frustrated,” she noted. “Many of us thought it would have moved forward by now, but the fact that the mall is still standing is a symbol that the project is stalled.”
In October 2006, Michael V. O’Brien, Worcester’s city manager, and Young K. Park, Berkeley’s president, signed a 392-page agreement that touted $470 million in private investment and $94 million in public financing. At the time, they said the document was “a significant milestone,” and that “CitySquare and Worcester are poised for success.”
Under the proposal, the empty mall and a portion of the parking garage would be razed. In its place would stand a medical office building, multifamily apartments, loft-style condominiums, senior housing, and retail spaces to accommodate restaurants, outdoor cafes, a multiplex movie theater and a health club.
In addition, new roads would reconnect the downtown with Washington Square, Union Station, and Front and Shrewsbury streets. A 1,025-space underground parking garage also is planned.
But the three-phase development, which is expected to take up to eight years to complete, remains on the drawing board. O’Brien and Park did not return calls seeking comment.
Barbara Smith-Bacon, a Berkeley vice president, said construction was to begin once tenants were found for 500,000 square feet of office space. The project was hindered, however, when St. Vincent Hospital determined it no longer needed a new 275,000-square-foot medical office building at CitySquare.
“If you want to put a negative spin on it, you can,” Smith-Bacon said. “But we’re facing economic realities and working with the city so that we can put tenants into the project in smaller bits. In this way, the city gets the same security of making sure they don’t have to put money into the deal until tenants are lined up.”
Smith-Bacon noted that it is not unusual for large development projects to take years to launch. Columbus Center, the planned $800 million air-rights project to be built above the Massachusetts Turnpike between Boston’s Back Bay and South End neighborhoods, has yet to break ground despite being approved in 2004.
Smith-Bacon said factors that may have contributed to the CitySquare delays include the cost of real estate construction, where prices have increased 25 percent in the past three years, and a double-digit vacancy rate in Worcester. As a result, she said, they will try to start with a 250,000-square-foot building.
“We are feeling very good about getting this started,” she added. “But I cannot say it will start in six months because there’s lots of work to do. We are having discussions with 10 to 20 potential tenants. The point is everyone at all levels is working extremely hard together to get the project launched.”
‘Fewer Challenges’
CitySquare has been touted as the largest public-private partnership outside of Boston in the Bay State’s history. The project, which would be set on 20 acres in the heart of Worcester, would total more than 2 million square feet of mixed-use development and reunite downtown streets that were taken during an urban renewal effort in the 1970s.
Philip DeSimone, a managing director for the global real estate services and money management firm Jones Lang LaSalle, and a leasing agent for the project, refused to concede that CitySquare is in jeopardy.
“There are fewer challenges with this site than there are with others because it’s permitted, ready to go and has broad support,” he said. “If there is a challenge, it’s finding someone who wants to locate in downtown Worcester and make it a signature spot for them.”
For DeSimone, the project is personal because his grandfather owned a haberdashery in the downtown and his father still practices law on Main Street. He disputed suggestions that time could run out and the developer might withdraw.
“Why does there have to be a deadline?” he asked. “What else are you going to do there? This is a pivotal project to transform the downtown. A few years ago I visited New York City’s Times Square and noticed all the corporate headquarters there. That place used to be a dump. Now, it’s alive and vibrant. Maybe if CitySquare gets built, suddenly college kids will go there and it becomes the place to be.”
Momentum for a fresh start for the downtown took shape in 2001 after Timothy P. Murray was elected mayor. By 2004, longtime City Manager Thomas R. Hoover resigned and O’Brien, the city’s former Parks and Recreation Department commissioner, was tapped as the new manager. O’Brien had developed a reputation for strong leadership during his time at City Hall, city councilors said.
That summer, Murray called on the Worcester Common Outlets’ owner to explore alternative uses for the site and threatened to take the property by eminent domain if a reuse plan was not devised. Berkeley stepped in and purchased the failed retail center and two office towers for $30 million from Hartford-based Cigna Corp.
Since then, Murray has been elected lieutenant governor. In an interview with Banker & Tradesman, he said razing the mall and a portion of the parking lot is pivotal.
“It’s not real until the first wrecking ball hits,” said Murray.
