Sept. 13 a day to celebrate
CitySquare project ceremony slated
By Nick Kotsopoulos TELEGRAM & GAZETTE STAFF
WORCESTER - It's been a long time coming, but ground will finally be broken for the $563 million CitySquare redevelopment project next month.
City Manager Michael V. O'Brien informed the City Council yesterday that a formal groundbreaking ceremony will be held for the long-delayed downtown project at 10 a.m. Sept. 13, more than six years after CitySquare was first envisioned.
While some preliminary construction activity has already begun, Mr. O'Brien said the groundbreaking ceremony will formally "celebrate the start of this key, catalyst project."
To facilitate the initial phase of the project, which includes razing the former Worcester Common Outlets mall and about half of the parking garage along Foster Street, Mr. O'Brien is recommending to the council for its Sept. 7 meeting some amendments to the District Improvement Financing Program previously approved for the project.
The manager said the amendments are needed to recognize new sources of funding for the project, and to adjust the timelines in the DIF and other tax incentives to align with the developer's construction plans.
CitySquare II Development Co. LLC, a development entity comprised of Opus Investment Management Inc. (an arm of The Hanover Insurance Group Inc.), took over the long dormant project in March when it signed a purchase-and-sale agreement with the original developer, Berkeley Investments Inc., to acquire 10.85 acres within the project site and become its new developer.
"My administration and I have worked very closely with the new developer of CitySquare to advance the demolition of the former mall, construction of a new 214,000-square-foot building to be leased by Unum Group, and construction of Mercantile Street, which will provide a direct connection from Major Taylor Boulevard through to Front Street and the Worcester Common," Mr. O'Brien wrote in a memo to the City Council.
"All of these amendments will strengthen the project and lay the groundwork for on-site construction activity," he added. "These required changes maintain and enhance our original goals of measured risk and protections for the taxpayer in this significant public/private redevelopment effort."
One of the recommended changes to the DIF reflects the state's decision to increase the amount of the Growth District Initiative grant it will be giving the city by $4 million, from $7.25 million to $11.25 million. The grant is intended to offset, in part, revenues the city will be losing as a result of tax incentives in place for the project. That money will assist the city in financing the construction of public infrastructure and other improvements.
The additional $4 million in grant money will be applied toward:
- $500,000 for site work along the portion of the East Garage property fronting Foster Street that was not completed during its recent reconstruction.
- $2.5 million for infill of those areas that will be cleared from the razing of the vacant Worcester Common Outlets mall building and part of the parking garage.
- $1 million for the creation of green space/parkland for that filled site.
Construction of the underground parking garage, the extension of Front Street to Washington Square, and the remainder of public improvements will not begin, however, until the developer satisfies the balance of the requirements called for in the general development agreement, according to Mr. O'Brien. No timetable has been set for that work.
Meanwhile, another amendment to the DIF modifies the payment period for a permit fee the developer has to pay.
Mr. O'Brien said CitySquare II requested that the second permit fee of $750,000 be pushed back from the commencement of work to the substantial completion of the construction of the core/shell of the new building that will be occupied by Unum Group. He said that will delay payment for about 18 months, ensuring that the project cash flow is in place to cover construction and other expenditures.
"It is important that we work together with the developer to make these appropriate and reasonable minor adjustments, timed with full commencement of phase one of the project," Mr. O'Brien said.
CitySquare is an ambitious plan to reinvigorate the downtown by tearing down the vacant mall, creating streets through the area and building offices, homes and stores. Unum is the first major tenant, having agreed to lease more than 214,000 square feet in a building to be constructed at Foster Street, across from St. Vincent Hospital.
That lease was considered key to trigger the release of $25 million in public money for infrastructure work associated with the project, including demolition of the mall.