As a wave of multifamily investors targets the city of Lawrence, Mayor Daniel Rivera is seeking to leverage their arrival and revitalize smaller blighted properties.
Boston-based Trinity Financial has plans to redevelop the vacant Van Brodie Mill into a 102-unit mixed-income loft housing project. While Rivera supports the $48 million project, he asked Trinity executives to find ways to benefit the city beyond the property line: specifically, buying and redeveloping three vacant eyesores into market-rate housing.
“A lot of developers are focused on one specific mill and project, but the benefits of the development don’t spread beyond that,” said Dan Drazen, project manager for Trinity Financial. “The mayor asked us to make a more broad-based investment in the city.”
The first step took place in January when Trinity acquired a vacant three-decker at 80-82 Inman St. in the Arlington section of South Lawrence. A second acquisition closed in March at 17-19 Eutaw St., and Trinity is working with a real estate agent to identify a third vacant property, Drazen said.
Rivera said the program will be applied to future large-scale developments to generate more housing and reduce blight.
“We’re going to keep using this formula: tying the big developers to the small developers to stabilize the neighborhoods in the core,” he said. “If we can get a developer who’s going to put 100 units in a mill to do nine units in the core, that helps the neighborhood. For us, it’s close to a win-win.”
Following renovations, Trinity would sell the three-family properties to an owner for condo conversions or rentals, Drazen said. And the city would make a financial contribution to Trinity’s rehabilitation of the 140,000-square-foot mill complex, combined with state and federal historic and low-income tax credits. The Massachusetts Historic Commission awarded $400,000 in tax credits for the project Thursday.
Trinity would reserve 75 percent of the units for income-restricted housing.
Blighted and abandoned properties are a persistent problem in Lawrence, according to a 2015 study prepared for the city by Karen Sunnarborg Consulting, Charleen Regan Consulting and Abacus Architects + Planners. At least 250 residential units had no water usage, an indicator of a vacant property.
Uncertain Future For Polartec Property
Shoring up the city’s housing also depends upon stabilizing a job market reeling from the year-end shutdown of Polartec’s operations at the former Malden Mills complex. The company’s decision to shift manufacturing of its cold-weather apparel to New Hampshire and Tennessee meant the loss of 200 jobs – and a potential new chapter in the life of its 560,000-square-foot, two-building complex at 46 Stafford St., built in 1976 and 1996.
Polartec parent Versa Capital Management has hired Boston-based Avison Young to market the 14-acre property, which contains 85 percent warehouse and manufacturing space and 15 percent office space. Current ownership has invested over $6.2 million in capital upgrades since 2007, according to marketing materials obtained by Banker & Tradesman, and the buildings can be subdivided for multiple users. An online auction with a starting bid of $1.5 million will begin May 8.
Another major employer, Boston-based New Balance, appears to have designs on growth in Lawrence. The athletic shoe manufacturer in 2015 acquired a 222,680-square-foot mill building at 200 Merrimack St. next to its existing factory. And the company has indicated it will add another 100 jobs in Lawrence over the next two years, he said.
New Balance has 836 employees in Lawrence, spokeswoman Amy Dow said, and it “continues to look at additional hiring opportunities.”
“At this point we have not done any specific build-out at 200 Merrimack but are excited to have the opportunity to restore Ayer Mill to its intended architectural splendor,” Dow said in an email.
Low Rents Deter Market-Rate Development
With an average per-capita income of $17,167 and average apartment rents below $1,100, according to U.S. Census Bureau figures, Lawrence has struggled to attract market-rate housing development.
“We’ve definitely seen a gradual increase in the rents that market-rate units can command and there’s been more product coming online, so there’s more comps,” Drazen said. “It still has a ways to go to be at the level where the closer-in suburbs or Boston are, but we’re happy to see that gradual uptick.”
That has encouraged developers to pursue a series of mill conversions utilizing historic and low-income tax credits. Boston-based WinnDevelopment in 2015 completed the second phase of Loft Five50, a conversion of a former Malden Mills building into 62 income-restricted apartments. Nonprofit Lawrence Community Works completed the renovation of the 122,000-square-foot Duck Mill building at 50 Island St. into 73 affordable apartments.
Lawrence’s inventory of vacant, low-cost industrial properties is attracting out-of-state investors as well.
Portland, Oregon-based Reed Realty Advisors acquired the massive former Pacific Mills #10 Worsted Mills building at 5 Franklin St. last year for $720,000 and has begun preconstruction on a two-phase, 276-unit affordable housing complex called Pac10 Lofts.
Alex Dzyuba, a principal at Reed Realty Advisors, estimated rents starting at $900 for one-bedroom units. The 480,000-square-foot complex ceased mill operations in the 1960s and is currently used as a furniture warehouse, Dzyuba said.
“We literally drove around the city looking for properties,” Dzyuba said. “Lawrence has high potential and we really believe in the market and the city. The cooperation of the city and all of the agencies involved make it a very attractive investment.”