Worcester Business Journal

8 Worcester Business Journal | April 6, 2026 | wbjournal.com A key to solving Central Massachusetts' housing crisis may lie in its indus- trial past. e state's Executive Office of Housing and Livable Com- munities says Central Massachusetts needs to add 20,500 housing units to the stock by 2035 to meet demand. e region also has an abundance of 19th-century mill buildings, the last physical remnants of an era where the entire local economy revolved around the manufacturing of textiles and other mill-made products. "If you talked to me 20 years ago, we would have had close to 1.5 million square feet of underutilized indus- trial space, largely 19th century mill complexes," said Philip Duffy, director of economic development for the Town of Clinton. Today, that figure is about 500,000 square feet. With plenty of mill buildings in Central Massachusetts communities like Worcester, Fitchburg, and Clin- ton, adaptive reuse of these large brick buildings into modern apartments with historical touches can take a bite out of the region's housing crisis while offering a less standardized living space than freshly developed multifamily prop- erties. Beyond adding housing, these projects are reshaping municipal tax bases, attracting younger residents, and repurposing long-dormant assets into revenue-generating properties. "I personally love these historic build- ings," said Xaley Yousey, vice president of operations at Worcester-based devel- oper and management firm Cunning- ham Equities. "ey are something that a lot of people easily look over, but they once were the lifeblood of the commu- nity, and I think they can be again. ey just need a little love, a little care, and a little time." The conversion process Costs can vary widely by project, but adaptive reuse projects can be up to 50% cheaper than new construction, ac- cording to a 2023 report from Tennes- see-based real estate firm Matthews. e conversion process starts with touring sites, said Giuliana Iavarone, senior manager of Cunningham Equities. "We usually check the location around it. See what's needed, if it will be commercial space, if it will be residen- tial space. So kind of seeing how the building is looking, how much work we need to put in, what it can be converted into, what makes the most sense in the community," Iavarone said. Federal and state historic tax credits are a key aspect of financing these types of projects, Yousey said. "When we are viewing any of these properties, or we're in the due dili- gence period, we are really looking at those requirements and seeing what, if anything, would potentially restrict development," she said. Because the state caps how much it can issue annually, these credits are in high demand. e Massachusetts Historic Rehabilitation Tax Credit cap increased from $10 million in 2004 to $110 million in 2024 to attempt to meet demand, according to Preservation Massachusetts. Cunningham's James Corner mill-conversion project in Clinton has received $900,000 in state historic tax credits so far, according to state records. Cunningham purchased the former manufacturing building most recently occupied by Florida-based Jabil for $2.38 million in October 2024, accord- ing to real estate data firm CoStar. "e windows are usually pretty big in this mill, which is one of the main aspects that residents or future resi- dents really enjoy about the building," Iavarone said. "ey're not like cook- ie-cutter, black-and-white apartments. ey're all very different." James Corner is the firm's third mill-conversion project in Clinton, aer developing 55 Sterling St. into the 39- unit Liam's Crossing in 2021 and 500 Main St. into the 147-unit Jack's Mill in 2024. Rents at Jack's Mill range from $1,950 to $2,600 per month. In addition to its Clinton-based projects, Cunningham is working to re- develop the former Ahlstrom-Munks- jo Paper Mill in Fitchburg into 225 apartments, a project called Elenor's Los. Cunningham purchased the site for $475,000 in 2021, according to the Worcester Northern Registry of Deeds. e project is still in the early stages, but the company wants to turn the site into much more than just an apartment building. "I'm really excited for the lobby. We're thinking of some type of coffee shop where we can have breakfast sandwiches, specialty coffee, and that in the aernoon turns into a restaurant or that also has a liquor license, you can have a sandwich with beer or wine," Iavarone said. Generally focused on projects in economically-distressed communities, Cunningham has worked on non-mill projects, including converting the Worcester Five Cents Savings Bank at 316 Main St. in Downtown Worcester into a 23-unit building with ground floor commercial space. The past and the present Cunningham's projects have had a big impact in Clinton, a small town with 16,000 people, said Duffy. "We've seen these properties put to productive use," he said. "ey've been a benefit to recent municipal tax rolls. ey've been a benefit to municipal revenue. Clinton is now younger; we've seen a shi in the demographics of our community, and that's great." Other municipalities can encourage adaptive reuse of older buildings by being proactive, making zoning changes ahead of time, Duffy said. Working with developers to prevent red tape and roadblocks is key. Scheduled to open in May, Cunning- ham Equities' James Corner project in Clinton features elements reflect- ing its industrial past, including large windows, brick accents, and a freight elevator, which should ease the move-in process for residents in the building's 112 units. Not only do these properties help meet housing demand, they tie the region's industrial past to the present, Duffy said. "is story of community revitaliza- tion in formerly industrial communities is being told in Fitchburg, in Worces- ter, and in Clinton," he said. "ose elements of the past are especially conspicuous in our community." Mill REVIVAL Adaptive reuse of historic mills offers path to easing Central Mass.' housing shortage Historic tax credit increase Fueled by high demand, Massachusetts has increased the amount of Historic Rehabilitation Tax Credits available each year four times since the program first launched in 2004. Year Cap amount 2004 $10 million 2005 $15 million 2006 $50 million 2018 $55 million 2024 $110 million Source: Preservation Massachusetts Giuliana Iavarone, senior manager at Cunningham Equities, shows the remade Clinton mill James Corner, set to open in May. W REAL ESTATE INSIDER BY ERIC CASEY

• Cover