Council Approves City’s $2.5M Loan for Former T&G Building
Saturday, April 13, 2013
The total project cost, including both hard and soft costs, is estimated at $25,950,000
On November 9, 2011, New Garden Park, Inc. purchased the T&G properties from the New York Times Company, owners of the T&G. The building was sold for $300,000 by the news company after an estimated $1.1 million in cleanup costs to remove asbestos, lead, and other contaminants, and now renovation costs are shifting.
The loan request of a U.S. Department of Housing and Urban Development (HUD) Section 108 Loan in the amount of $2,500,000 was submitted by New Garden Park, Inc. for the renovation, the future sight of Quinsigamond Community College’s Health Care and Workforce Development Center, a Technology and Idea Exchange Center, and restaurant and retail space.
According to a letter sent to council from City Manager, Michael O’Brien, city administration strongly recommends approval of the application, citing the non-profits “decades of experience” with brownfield renovation, but City Councilors Kate Toomey and Konstantina Lukes still had questions about the arrangement.
Toomey voted in opposition, and Lukes abstained from voting.
Moving Too Quickly
“There were still some questions I wanted answered,” Toomey said after the vote passed. “I hadn’t heard from the developer, and I wanted a little more time”
According to letters from O’Brien and the city’s Chief Development Officer Timothy J. McGourthy, the HUD Section 108 Loan will allow New Garden Park, Inc. to cover soft construction costs associated with the renovation.
“I think it’s great for them, but with these loan guarantees, there’s always questions about that stuff. It is what it is,” she said.
When asked about the oversight the council will have in routine meetings with New Garden Park in the future, Toomey said she was in favor of more oversight.
“I would like to see the WRA (Worcester Redevelopment Authority) have more of a say,” she said, suggesting the role of the BRA (Boston Redevelopment Authority) in Boston. “Having worked for the city of Boston in mayor’s office, I’d say that’s a good way to do things.”
Councilor Lukes, who abstained from voting on the issue, said there is a “significant debate” and a “double standard” in Worcester right now in terms of which projects are getting pushed through. Like Councilor Toomey, she also had questions that she did not get answered before the vote came down.
Lukes brought up the example of the Hampton Inn property.
“I was prevented from getting more info on the T&G, but they go forward in standing committee turning down a hotel, and yet going through with another proposal funded by gambling and greed,” she said. “Is that the kind of message we want to send to our business community?”
Lukes said that it has “nothing to do with the merit of the project,” and that the double standard kept her from getting more information on the 18-20 Franklin Street property. She said that with the amount that the building was sold for, and the financial information she had, she needed more questions answered and “felt uneasy” about it.
“[The contractors as the Hampton Inn property] requested funding and were bringing 100 new rooms and jobs and didn’t get the approval of the standing committee,” she said. “There’s a double standard there. Council is going to double and triple standards.”
This case, she said, when compared to 18-20 Franklin Street, and the potential slots parlor, is unfair.
“The developer at the Hampton Inn property, has their own construction company. Council is sending the message that only union jobs will get the green light,” Lukes said. “And only unions supporting their campaigns. Is that message they want to send out? Don’t come to Worcester unless you’re with the unions.”
The Cost of Jobs
According to letters from O’Brien and McGourthy 72 estimated jobs will be created.
“This represents a significant opportunity for the City to use this program to revitalize a blighted, vacant building; bring approximately 2,000 new students, faculty, and staff to the downtown; provide much needed business incubator and restaurant space; and create a minimum of 72 permanent, full-time jobs,” said Timothy J. McGourthy in his letter.
McGourthy also said that New Garden Park, Inc. and its tenants will work with the Workforce Development Division and other organizations to ensure that all of the jobs to be created will be made available to or taken by Worcester residents.
The new center at QCC to expand its Allied Health Services program and bring approximately 2,000 new students, faculty, and staff to the downtown. The college will also relocate its Training and Education Center (TEC), providing a number of opportunities for area residents to receive high-quality post-secondary education. The annual enrollment at the TEC is approximately 1,200 students.
Additionally, New Garden Park, Inc. is currently marketing approximately 5,000 square feet of space to be used as a restaurant. The restaurant space would service the student and worker population during the day and the theater-goers and other visitors in the evening, helping to activate the streets within the downtown.
The total project cost, including both hard and soft costs, is estimated at $25,950,000, and will be financed through the following sources:
Existing Sponsor Equity $1,200,000
Bank Partnership Loan $8,975,000
Historic Tax Credits $2,103,164
New Markets Tax Credits Equity $6,279,933
City of Worcester HUD Section 108 Loan $2,500,000
City of Worcester Brownfield Cleanup Revolving Loan Fund Program $500,000
EPA Grant $200,000
T&G Environmental Contribution $137,500
EDA Grant $1,000,000
Developer Fee $3,058,683
The total comes to $25,954,281.
NYTimes – The Smallest Contribution
Of all sources of revenue for the project, the contribution from the NYTimes Co. remains the smallest on the list.
When last asked about the financial side of the renovation, Lt. Governor, Timothy Murray, said, “The WBDC are experts on brownfields. They have an agreement that was made depending on the level of contamination that is or isn’t present there,” Murray said. “But the T&G may have to contribute more.”
- Murray Says T&G May Have to Pay Up for Building Contamination
- Officials Call for NY Times to Clean Up T&G Contamination
- T&G Building Contamination Has Unions Concerned
- Taxpayers Demand Accountability for T&G Cleanup
- Who should pay for the T&G contamination clean up cost?