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Wrecking ball near
HANOVER PUSHES CITYSQUARE
By Martin Luttrell, TELEGRAM & GAZETTE STAFF
The former Worcester Common Outlets mall and future site of CitySquare as seen from the 20th floor of 100 Front St. (T&G Staff / PAUL KAPTEYN)
WORCESTER — The stairs leading to the doorway of the former Worcester Common Outlets mall are partitioned off from Foster Street with Jersey barriers.
The faded lettering on the vacant building says mall entrance, but over the next year that location will become Mercantile Street, a new downtown roadway that will cut through the CitySquare project, linking Foster and Front streets.
Aside from the concrete barriers that arc along the easterly edge of the old mall and parking garages, and a few pieces of equipment staged in an adjacent lot, there is no outward sign of the work going on inside in preparation for the wrecking ball.
But that will change next month, with the removal of the exit ramp that extends from the second floor of the East garage across Foster Street from the Korean War Memorial.
Then, piece by piece, parts of the East garage and much of the mall property will come down.
"Now, it's going to feel like the front door to the downtown," said Frederick H. Eppinger, president and chief executive officer of The Hanover Insurance Group Inc., which paid $5 million in June to acquire about half of the 21-acre downtown parcel known as CitySquare.
Under Mr. Eppinger's guidance, the long-stalled CitySquare project, initially billed as a $563 million mixed-use project using public and private funds, is finally getting off the starting blocks.
Over the next few months, workers will be inside the former mall, separating electrical and other utility services that now supply the entire 21-acre CitySquare area from buildings retained by the former developer, Berkeley Investments Inc.
Cranes and bulldozers are arriving later than planned. But advocates believe the activity will generate momentum and create a sense of vitality downtown.
In his first detailed interview describing plans for the project, Mr. Eppinger, a native of Spencer, said he increasingly grew comfortable with making an investment in the city that serves as headquarters of his company.
He said it is not unusual for an insurance company to have assets in real estate, and the difficulty Berkeley Investments had in accessing capital created an opportunity. Hanover has $350 million in assets related to real estate, he said.
"We became a perfect partner," Mr. Eppinger said. "We could get comfortable with the idea that this would be good for the long term. Some investors are tied to what happens from one quarter to the next. We have a different view than some investors."
Mr. Eppinger's CitySquare II Development Co. LLC now owns vacant portions of the former mall and a parking garage. Berkeley Investments, whose president is Young Park, retains ownership of a 20-story office tower at 100 Front St., a two-story building at 90 Front St., a nine-story office building at 120 Front St., a 1,454-space parking garage at Foster and Commercial streets and an additional 200,000 to 300,000 square feet for future development.
First up for Mr. Eppinger will be a 200,000-square-foot office building that will take shape next spring at Mercantile and Foster — the new headquarters for the Worcester operations of Unum Group. Employees of Unum, a disability insurer, will move in by fall 2012. Unum has a 20-year lease for the property. The new building will cost $65 million, aside from the cost of creating Mercantile Street and extending Front Street out to Washington Square.
J. Christopher Collins, senior vice president and deputy general counsel at Unum's Worcester operations, said his company is coordinating with the developer on the building design. "There's obviously lots of contact," he said. "We're responsible for the interior of the building, and they're responsible for the exterior and the shell."
He said that Chattanooga, Tenn.-based Unum is now marketing its current property, a 400,000-square-foot complex off Chestnut Street where about 700 people work.
As for the project's second phase, Mr. Eppinger said he wants to complete as much street work as possible, but realizes that the release of public money for street work will depend on further lease commitments.
"There is no next step," he said, noting that Leggatt McCall Properties, as Hanover's developer, will determine when the markets for commercial or residential space are ready for more development.
"It's still the objective to have mixed use, apartments, offices and parking," he said, "but that's obviously in the future. There's lots of conversation with Leggatt at what comes next."
He noted that the project was envisioned before the housing market collapsed and pulled the nation's economy with it. So, the residential component will be slower, though it could include a hotel, he said.
"What we have to do now is create the reality," he said.
District 2 City Councilor Philip P. Palmieri, whose district encompasses CitySquare, said he is excited at the thought of Unum in a new building and new streets linking downtown to the city's East Side.
"Having the roof off and some sunlight there will make an enormous difference," he said. "These are the kinds of things, along with commuter rail, that will trigger enormous interest in Worcester."
When Berkeley and then-mayor Timothy P. Murray proposed CitySquare in 2004, the project called for building 650 housing units and more than 1 million square feet of space for stores, offices and entertainment.
While the timetable and specifics of further development are not clear, progress on the first phase will create jobs and support the investments in the downtown made by others, notably the Massachusetts College of Pharmacy and Health Sciences, Gateway Park and the Mayo Group, which is renovating buildings for residential and commercial use, said Mr. Murray, now lieutenant governor.
"The vision in my time as mayor was knitting the downtown together with the neighborhoods, and creating a downtown much more pedestrian friendly," Mr. Murray said.
"Through the creation of the CitySquare project, we're allowing it to be done in a way that will harness the energy and movement of Union Station, and the growth of Mass. College of Pharmacy, the DCU Center, and to bring in new businesses."
City Manager Michael V. O'Brien said that while he is pleased that the first phase is getting off the ground, he views CitySquare as one of many developments that are coming together to revitalize the city's core.
"The fact that Hanover, with time-tested business acumen, sees this catalyst project as a solid investment, is priceless," he said.
City officials said that while they are pleased CitySquare is once again moving forward, other development projects are also ongoing and part of a expansive development effort from North Main Street into the Canal District.
"It's connecting the dots, and CitySquare is the last part that allows it to materialize," Mr. O'Brien said.
Mr. Eppinger held a similar view, saying the project "is not Disney World, off by itself," but part of a broader redevelopment.
"Over time it will be successful for the city," he said. "I'm not a silver bullet guy. I believe in slow, steady progress. Move it forward."