Worcester Business Journal

wbjournal.com | January 23, 2017 | Worcester Business Journal 13 R E A L E S T A T E F O C U S Information is POWER! Did you know our lists are available for download? Our lists can be your lists! • Choose the format that best meets your needs – PDF or Excel • Download any individual list or a combination of lists • Get extended lists not available anywhere else Our Lists are the only comprehensive source for information on the region's companies, executives and industries that drive Central Massachusetts' economy and market. Worcester Business Journal WBJ Questions? Want to be included on a List? Contact Stephanie R. Meagher at smeagher@nebusinessmedia.com. ACCESS THE LISTS TODAY! Order now at wbjournal.com/datacenter Worcester can attract industrial tenants Worcester officials tout its commercial and industrial space as the affordable alternative to Boston, especially with a large number of vacant manufacturing buildings. Yet, older industrial buildings remain empty, as suitable tenants can be difficult to find. Despite this, the majority of WBJ readers polled said Worcester is a viable place for industrial businesses. F L A S H P O L L Is Worcester a viable location for today's industrial tenants? Yes. It is centrally located with access to major highways. 40% COMMENTS: No. The space is not suitable for modern uses. "Worcester is the second largest city in all New England and should be thought of as such. Worcester has a lot to offer from restaurants to theater, affordable housing, good school system, activities for citizens and businesses alike, opportunity and strong leadership. Geographically, Worcester is located in the heart of Yes. It is more affordable than areas closer to Boston. 21% No. Commercial real estate taxes are too high. 35% 4% New England with access to major highways, trains, bus service and an airport. Worcester has the best health care in the region as well as many institutions of higher education." "Towns like Sutton are similarly located with lower taxes and are much more attractive to industrial and commercial tenants." W Worcester property owners, and with- out viable space, growing manufactur- ing in the city is difficult. Nearby towns like Shrewsbury and Auburn are more attractive alternatives, offering single tax rates, Pitcher said. She said City Hall is committed to narrowing the split but that some city councilors won't vote for tax policies to increase the burden on residents. Still, Pitcher noted success stories do exist. A developer renovated 610,000 square feet of industrial space at 150 Blackstone Road in Worcester, and that $26-million project is fully leased with three tenants. Table Talk Pies is planning a 50,000-square-foot expansion in the South Worcester Industrial Park. Both projects received tax breaks from the city. Blackstone River Road received a 15-year tax-increment- financing deal for creating 300 jobs over five years. The Table Talk property received a 20-year TIF for 50 jobs. Pitcher said the chamber and the city have a hard time convincing long-time landlords to reposition properties, either by selling or making investments. Buildings overvalued? One exception is Duva Distributors, a baked goods distribution firm that relocated to Worcester from Shrewsbury this summer. Owner Chris Duva said the vacant Nissen Baking Co. plant at 983 Millbury St. had ideal high- way access and was set up perfectly for his operations, but the building needed $225,000 in upgrades. While the city made permitting the project easy, Duva was discouraged that he wasn't able to get a tax abatement to help defray the cost of improvements. "The city has the building way over- valued for tax purposes," said Duva, noting the building was vacant three years with graffiti and broken windows. Duva said his business is poised for eventual growth, but for now, the reno- vations mean he has to manage payroll expenses closely. He opted not to issue raises this year as a result. "We just have to grow into our space and our new expenses," Duva said. This illustrates a sticking point for smaller industrial tenants. Tax incen- tives available to larger companies may not be an effective tool for small busi- nesses that, like Duva, have to grow their workforces conservatively. Better tracking needed for future Worcester's new industrial sweet spot may be small manufacturing, driven by biotechnology startups out of Worcester Polytechnic Institute and UMass Medical School, said Tim McGourthy, executive director at the Worcester Regional Research Bureau. To that end, McGourthy said the Research Bureau is interested in improving tracking of industrial vacan- cies, which exist in different-sized pockets. That data is an important first step in a larger strategy of repositioning vacant property, he said. 1. 44 Hammond St. – 182,000 square feet of available space at the former Melville Shoe Corp. 2. 344-354 Franklin St. – 140,000 square feet of vacant space listed under separate owners by the city 3. 10 Pullman St. – 120,000 square feet of available space at an indus- trial warehouse property, currently undergoing $2 million in renovations, according to broker Chacharone Properties Other notable vacancies • The Wyman-Gordon property – long-vacant 14-acre Canal District site targeted for urban renewal by the city • 10 New Bond St. – 173,000 square feet of industrial space at the New Bond Street Business Park • 141 Higgins St. – 47,000 square feet of office, warehouse and manufactur- ing space at the three-building corpo- rate headquarters of Curtis Industries According to data from CoStar Group, Worcester has an industrial vacancy rate of 40 percent. It's spread over 36 properties tracked by the real estate informa- tion company, but more than 40 percent of vacancies are concentrated in these three buildings: Worcester industrial vacancies Sources: Worcester Regional Chamber of Commerce, CoStar Group, City of Worcester, Kelleher & Sadowsky Associates, The Stubblebine Companies, Worcester Historical Museum

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