Worcester Business Journal

14 Worcester Business Journal | December 25, 2023 | wbjournal.com ECONOMIC FORECAST 2023 Housing to hit a rough patch e real estate industry has been slowed by rising costs and inflation rates, as issues will persist into 2024 BY ERIC CASEY WBJ Staff Writer T here's no shortage of pro- posed new housing and oth- er large-scale developments in Central Massachusetts. ere's also no shortage of commentary regarding out-of-con- trol rent prices, homelessness, and the impact of new development of all types on existing infrastructure. Real estate re- mains an economic driver of the region, so expect the debate over the impact of growth to intensify in 2024. Housing construction slowdown You'll be hard pressed to find any experts who think the factors causing rising construction costs will suddenly dissipate in the coming year. ere's no shortage of need for housing, but if the financial numbers don't make sense, we probably shouldn't expect developers to keep building. Until costs come down, more builders will likely press the pause button or to scale back existing plans. Community Preservation Act Next year will be the first year Worces- ter property owners will see a 1.5% Community Preservation Act surcharge included in their tax bills. Passed by voters in 2022, funds from this surcharge are meant to support efforts like building community housing and new parks, as well as protecting historical buildings. Expect plenty of debate over the use of these funds, as other Central Massachu- setts municipalities considering their own CPA watch closely. Alternative uses for big box retail In a modern age where online shopping is ubiquitous, more companies are abandoning massive retail storefronts, forcing landlords to get creative to fill these spaces. Don't be surprised to see more stories about pickleball facilities and other unique businesses filling spaces formerly housing big box brands. Clark University seeks to demolish entire Main South block for large student housing complex In order to build a mixed-use, 508-bed student housing complex by 2026, Clark University in Worcester plans to demolish and rebuild an entire block of Main Street in the Main South neighborhood in 2024, including three historic structures and a number of businesses. "When I have to move to another place, it will be more expensive, and I have to build up a customer base all over again," said Laura Siguenza, owner of Laura's Express convenience store, which is one of the businesses set to be displaced. Among the other businesses occupying space in the block are the restaurant Annie's Clark Brunch, which has been in operation for more than 35 years, and the new Salvadorian bakery Belen Casa del Pan, which bought the cafe from Acoustic Java in January. "Clark has been working in good faith with the businesses to make sure they are fairly compensated for having to move," said Steve Teasdale, executive director of the Main South Communi- ty Development Corp. "ere are still discussions that are needed between Clark and the community over a project of this scale." In the place of the buildings, Clark aims to build a seven-story, 156,000-square-foot residential and retail building, adding 508 beds for students and 10,000 square feet of first- floor retail, according to a filing with the Worcester Historical Commission. Clark is planning on having sessions with local community members in August and work with the individual business owners to help them continue their operations as the project moves forward, according to a July 19 letter by Clark to university faculty and staff. "I would like to underscore that we respect our long-standing tenants and their contributions to the community, and we are treating our conversations with them about their plans as confiden- tial," Jill Friedman, Clark vice president, marketing & communications, said in an email to WBJ. In the fall semester, Clark officials worked with students on the types of rooms to be included in the housing project. Faculty and staff were updated on the project in a fall session. "Our highest priority is to engage with our community partners to imagine not only what this important stretch of Main Street will look like, but also how it will contribute to the social, cultural, and economic vitality of Clark and Main South," the July 19 letter says. Clark is seeking to demolish the his- toric structures because it is more cost effective to do so than to renovate the century-old buildings and bring them up to standards for student housing, according to the Building Demolition Delay Waiver Application received by the City of Worcester on June 5. at demolition application is timed so Clark can begin demolition of the block in 2024 and the new facilities can open in fall 2026, according to the letter. During the 2022-23 academic year, Clark saw a 13% increase in enrollment, which led to a 103% occupancy rate in student housing, leading to the school leasing space from third parties, includ- ing Worcester State University, accord- ing to the application. A Clark study indicated the univer- sity needs to add 375 new beds to its housing stock. But renovating the existing three historic buildings, along with new construction at the site of the other buildings slated for demolition, would yield 275 beds. e Trustees of Clark University own the properties that will be demolished. ey currently contain student and employee housing and first-floor retail space. Top real estate news in 2023 W Construction is nearing completion at the Alta on the Row multi-family devel- opment off Mulberry Street in Worcester. PHOTO | MATT WRIGHT

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