The small towns surrounding the mixed-use retail development Sam Park is building in Littleton have grown significantly in the last two decades, showing the kind of strength needed to support the site as a retail destination.

Park is in the midst of constructing the first phase of The Point, a sprawling, open-air shopping plaza near the intersection of Interstate 495 and Great Road.

The first phase includes retail space anchored by a Market Basket supermarket and a Tavern in the Square restaurant, as well as office space and a Hilton hotel with just over 100 rooms.

The second phase of the project will include a freestanding office building, a cinema with between eight and 12 theaters and more retail. Altogether, the site will comprise some 540,000 square feet of new commercial space on four different plateaus, with an 80-foot grade change throughout the site. Park hopes the entire $80 million project will be finished by the end of 2015, with phase one complete by the end of next summer.

Beyond the commercial uses, there will be room for outdoor performances by local theater troupes, as well as outdoor firepits dotting the landscape.

“We have less of the large, open expanses of pavement” because the site is being broken up into four sections, “making it feel less like a strip mall and more like a European village,” said Park, head of the eponymous Sam Park & Co. development firm based in Boston.

If You Build It, Will They Come?

The big question since Park purchased the 90-acre property from Cisco Systems in 2011 has been if the purchase will pay off. While highway access and visibility are key components for many retail projects, Littleton is pretty far outside the usual shopping range for many in Eastern Massachusetts. Plus, retailers are still coming out from under the shadow of the Great Recession, with many reluctant to pull the trigger to open new stores.

Park paid about $6.5 million for the land two years ago. He is the first to admit that some of his peers in the real estate industry thought he overpaid, especially since none of the permits were in place to build the project, a usually time-consuming and expensive process.

“If we’re right, we paid just 50 cents on the dollar for the land,” Park quipped in a recent tour of the Littleton site. “If we’re wrong, well, then we overpaid. But I think without a doubt we were right.”

Despite winter stoppage, if the current pace of construction continues, Park thinks the progress to-date is significant evidence of a well-made strategy. Once he purchased the site, it took just six months to permit it for construction. Since then, the last 18 months have been spent in constant construction mode. The steel for the Market Basket is up and close to being buttoned-up for the winter, and Westborough-based Stateside Construction is working to erect the steel frame of a second building before the cold sets in.

But there’s more to the probability of a successful project than the pace of permitting and construction.

From 1990 to 2010, Littleton’s population grew to 8,924 from 7,051, according to the most recent U.S. Census Bureau data. Looking at a slightly larger picture, the four neighboring towns of Littleton, Acton, Boxborough and Westford also experienced significant growth at a rate far outpacing the state as a whole. In 1990, those four municipalities had 44,658 people. Today, that number has ballooned to 57,795. That’s a 29 percent increase, or 13,137 more people living in those four locations. During that same period, the state’s population grew just nine percent.  

Then, there’s the increased buying power in the area. Multiplying Middlesex County’s average annual per capita income of $41,453 by the growth in residents, the population growth creates an additional $545 million pouring into those four towns every year.

“That kind of economic purchasing power is just one reason why mixed-use including retail makes sense” for the location, said Brendan Carroll, senior vice president of research for the Boston office of commercial brokerage Transwestern, formerly Richards Barry Joyce & Partners.

Carroll’s firm tracks some 4.9 million square feet of office space in the four neighboring towns, which is about 19 percent vacant. However, the 1.1 million square feet of Class A office space is just 8.7 percent vacant, with that space leasing to tenants for about $18 or $19 a square-foot. And the tenants in the market certainly aren’t slouches; they include prominent operations for IBM, another Cisco location and Red Hat. Park’s firm, however, is getting an average of $35 to $40 per square-foot for its retail space, and quoting approximately $30 a square-foot for the office, which is not yet being marketed.

“These kind of mid-size, open-air facilities, that’s the trend,” said Jon Hurst, president of the Retailers Association of Massachusetts. “There’s developable land and certainly both the jobs and the residents to support these types of developments. Even so, our region has been slower than a lot of regions around the country in such new retail development.”

Plus, Hurst added, he couldn’t think of any other nearby significant retail centers to compete with The Point.

They Asked For It

Littleton officials amended its zoning in 2010 to allow for more flexible development on Park’s site, where Cisco had originally planned an office park. However, the firm decided to focus elsewhere and unloaded the property. So the town rezoned the site to allow for the kind of retail amenities and hotel uses that residents and corporate tenants clamored for, said Keith Bergman, Littleton Town Administrator.

After Park announced his intentions to the town, was awarded a $1.8 million MassWorks grant, plus other state funding totaling about $2.5 million for roadway and other infrastructure improvements. Park said he matched that amount with $2.5 million of his own for the upgrades to Route 119, which runs along the front of the project.   

Now, Bergman and his contemporaries in Acton, Boxborough, Maynard, Westford, Concord, Stow have created the CrossTown Connect initiative to create a transportation management association for the seven municipalities. Along with corporate partners, local leaders are trying to address the challenge of getting reverse commuters, people who take the MBTA’s commuter train to the suburbs, to their jobs from the train station.

The group is working to increase the number of shuttle buses available in the different municipalities and share resources, Bergman offered. One condition of the federal grant funding that has helped make improvements to the Fitchburg commuter rail line, including an upgraded Littleton station, is that the stop be served by a shuttle bus system.

Littleton’s commuter parking lot also was expanded under the improvements package, with an additional 200 parking spaces. Now, the lot is nearly at capacity, Bergman said.

Email: jcronin@thewarrengroup.com