An interesting “point/counterpoint” take on the issue of CitySquare financing over at Worcester Business Journal today.
Today, though, Hegenbart said, banks just don’t have much money to lend, even to demonstrably solid projects. And if they do agree to a financing deal their underwriting standards are higher, he said. Where they once asked developers to cough up a quarter of a project’s cost in cash, that’s now up to 50 or even 75 percent.
Sid Spiegel, vice president of the commercial division at NE Moves Market LLC in Waltham, had a more optimistic take on the situation.
“Berkeley has a good reputation,” he said. “Unum is a good tenant… I would think a lender’s not going to have a big problem with that deal.”
At a pat-on-the-back announcement heralding a Unum-CitySquare agreement this morning, CitySquare developer Young Park told Worcester Magazine that demolition is probably seven months away, about four months after a final lease agreement is expected between the two parties.
More to follow….
UPDATE: Unum will take 194,000+ square feet in the newly constructed “Building H,” which Berkeley officials say will be completed in 19-22 months.
Park said conversations with other potential CitySquare tenants are ongoing.
Worcester is posed for an “exciting announcement on downtown development” tomorrow at 10am at the Mass College of Pharmacy.
Could this be CitySquare/Unum? Something else entirely? This is CitySquare/Unum.
Some reports are that we could be looking at initial Galleria/Common Outlets demolition in the next few weeks.
Thanks to Councilor Toomey for asking how realistic August 2008 is for demolition. O’Brien says Park might be more conservative, but that he thinks it’ll happen this calendar year.
“We’re always delighted to see you here, which isn’t enough,” says Mayor Lukes.
Young Park: “I’d like to remind everyone that this is truly a partnership.”
Park says the initial triggers were “monolithic,” and especially in Worcester were a “tall order.”
“The reality is we need a way to [approach] this in a bite-sized fashion.” The developer is going after smaller to mid-sized tenants now, rather than the huge ones. “What we’re trying to achieve here…its the first trigger, which is modest in size.” He mentions a couple potential life-science tenants.
“We are now able to compete and provide the type of building the market would like to see built.” It’s going to be a smaller building, reducing costs, says Park, and increasing the pool of contractors who can bid on it.
“That first trigger will generate the interest” for more tenants, says Park.
The City Manager is doing his presentation on the Amendment #1 to the CitySquare General Development Agreement….
NEW TRIGGERS FOR PHASE 1A
- Berkeley required to lock-in lease for 135,000 sq. feet of rentable commercial space in a new Building H.
NEW SCOPE OF WORK: (partial)
- Phase 1A is inclusive of all demolition
- Construction of Mercantile Street
- Construction of a portion of new Front Street
- Allows for demolition to begin as soon as August. $5 bucks to everyone who comments on this post if that happens.
- Berkeley has 3 years to finalize details to fulfill the original GDA expiring June 15, 2011.
- State’s $25 M will go entirely to the cost of demolition and enabling the current mall
City Manager Michael O’Brien says he has “guarded optimism” on CitySquare, and plans to have a final “revised” deal proposal before council in two weeks.
Palmieri: “[Young Park] expressed an optimism I hadn’t heard in some time,” Palmieri said about a recent meeting with the CitySquare developer. This is about 45 seconds after he said Park once exhibited “Drew Bledsoe like feet” on the project.
Sorry for the late start here–
Firefighter Mark Stomski (and a huge crowd of supporters) was here for the conversation on his special pension; there was no real conversation, as the tabled item passed quickly.
Later on, we’ll deal with Konnie Lukes “amendment” order.
In other news: CitySquare report is coming in a couple months, there was some cautious optimism that tenants may be in the pipeline. (Thanks Tracy).