Cancer center for CitySquare
St. Vincent Hospital commits to build $21M facility
By Lisa Eckelbecker TELEGRAM & GAZETTE STAFF
WORCESTER - St. Vincent Hospital will build a $21 million cancer center in the downtown CitySquare development, making it the second entity to commit to putting operations there since new developers took over last year.
The hospital reported it has signed an agreement with CitySquare II Development Co. LLC that will allow it to acquire a parcel of land on Foster Street and build a two-story, 40,000-square-foot building that would open in January 2013.
St. Vincent's existing radiation services at the hospital's former campus in the Vernon Hill neighborhood will relocate to the new building, according to officials. The hospital also plans to move other cancer services there, such as chemotherapy.
St. Vincent chose CitySquare for a new cancer center over other parcels it already owns after City Manager Michael V. O'Brien pushed for it and CitySquare developers agreed to meet the hospital's budget, according to Dennis L. Irish, a spokesman for St. Vincent Hospital.
"Frankly, we're buying land to build this building when we didn't have to do that, because we already owned land on Summer Street," Mr. Irish said. "That comes out of available capital, but we found a way to make it work."
Hospital officials expect construction to start in September.
The project's budget is expected to be tight, and St. Vincent Hospital will be seeking tax incentives, according to Mr. Irish. Mr. O'Brien declined to say how much he will be asking city councilors to approve in a tax-increment financing package, which would reduce the cancer center's property taxes over a specific period of time.
"When you look at the pro formas, it is an extremely tight budget," Mr. O'Brien said, referring to financial statements calculated to reflect projections. "In order to make this work, I expect to recommend a TIF to the City Council."
CitySquare is a development that aims to turn a shuttered shopping mall into space for offices and other possible uses. Berkeley Investments Inc. of Boston proposed the project in 2004, and city and state officials lined up $94 million in public money to pay for new roads and infrastructure.
Demolition of the mall and new construction languished until 2010, when an investment arm of Hanover Insurance Group Inc. bought about 11 acres of the project area from Berkeley Investments for $5 million and took control of unoccupied mall space and a large parking garage. Berkeley retained two office towers and other buildings and spaces.
Unum Group, a Tennessee-based disability insurer that had been negotiating with Berkeley for space, became the first to sign a deal with the new CitySquare developers when it agreed last year to a long-term lease of office and parking space for its Worcester operations. Unum will relocate from an older downtown complex. Hanover is spending about $85 million to develop the 200,000-square-foot Unum building.
Workers have been making way for demolition and new construction at CitySquare in recent months by shoring up the parking garage along Foster Street and preparing utility lines, according to Frederick H. Eppinger, Hanover chief executive. The deal with St. Vincent Hospital was the first one Hanover and its development partner, Leggat McCall Properties LLC, worked on from the start, he said.
"This is a great next step," Mr. Eppinger said. "This is a concrete thing. It was the first thing we worked on. It was a unique parcel. It was an important parcel."
St. Vincent Hospital's new cancer center will sit on a parcel south of the hospital, at the intersection of Foster Street and a new road to be built extending Front Street toward Washington Square. Symmes Maini & McKee Associates of Cambridge has been hired to design the building.