WORCESTER – City and business leaders gathered recently at the 610,000-square-foot 150 Blackstone River Road warehouse development in the Quinsigamond Village neighborhood to praise a unique public-private partnership that has already attracted two major tenants.
Known as 150 Blackstone, leaders are lauding the tax increment financing (TIF) agreement formed last year between the city and GFI Partners, an active real estate developer in Worcester since the mid-1980s, as the catalyst for the development’s early success. After completion, a 15-year TIF propelling the $26 million, 36-acre redevelopment will create about 300 new jobs over five years and generate $1.4 million in property tax revenues annually.
Future tenants will include Imperial Distributors, Mid-States Packaging, a current tenant at the site for more than 30 years, and a third prospect to be announced in the next few weeks. Imperial will occupy half of the total square footage and Mid-States’ footprint will be 70,000 square feet, leaving the remaining space for a future third tenant. The Worcester Railroad that runs through the property and connects to the new building via rail spur makes it one of very few locations in the region with that connectivity.
Timothy P. Murray, Worcester Regional Chamber of Commerce president and CEO, credits GFI Partners president Steven Goodman for working diligently on the TIF deal with City Manager Edward Augustus, Mayor Joseph Petty, and the City Council. That teamwork allowed him to then work out an agreement with Imperial Distributors. Murray noted the need for more first class, commercial and industrial spaces in the city as the last major space developed here was back in the 1980s with the airport industrial park.
“Because of Worcester’s high industrial tax rate, Steve Goodman would not have been able to offer a lease price to Imperial that was competitive for modern, commercialized spaces,” Murray said. “Approval of this project and private sector investment is allowing his company to grow. With the iron up and construction underway, we are looking forward to a ribbon cutting.”
Imperial Distributors, a third generation family-owned business based in Auburn that employs more than 700 people, has been operating from several locations for far too many years, according to its CEO Michael Sleeper. Imperial’s first three warehouses were all based in Worcester. Eventually, the company moved operations to the Auburn Industrial Park and built a 30,000-square-foot facility. The family then expanded that building three times and added another building in Worcester until it had no more room left to expand.
“We were landlocked,” Sleeper said. “So clearly we have outgrown our distribution and office facilities and were searching for quite a few years to support our growth and we found it here at 150 Blackstone River Road. Securing the TIF and the investment tax credit from the state was a game changer.”
Imperial Distributors has been providing non-food products to about 3,500 supermarkets and merchandising services for 77 years. Once moved in, Imperial will occupy 325,000-square-feet at 150 Blackstone and its 40-foot high roof will allow three levels of steel pickling and an abundance of palette positions for storage. “If you’re in the distribution business, doors mean a lot,” Sleeper said. “The thing that gives me the most pleasure of all is to look at 45 doors for receiving and shipping and that this puts our entire family under one roof. We feel really blessed.”
Goodman felt it was somewhat of a leap of faith by the city to agree to grant GFI Partners a TIF. However, as soon as that commitment was ironed out, his company was able to attract Imperial Distributors within 12 months. “We felt if we had a competitive position on the tax rate, we could encourage new businesses to come here and we would be successful,” said Goodman. “Without the collaboration with the city of Worcester, we’d be sitting in the old U.S. Steel building (which closed in the mid-1970s).”
City Manager Ed Augustus noted that there’s much discussion about ongoing downtown development, but that this is a prime example of leaders not forgetting about other city neighborhoods. Augustus worked closely with City Councilor George Russell and state Rep. Daniel Donahue as well as his Chief Development Officer Michael E. Traynor to help galvanize neighborhood support. “We are working downtown as well as with the rest of our city, whether it be the South Worcester Industrial Park, which is virtually filled, or numerous other projects,” Augustus said. “We’re focused on how to get it done, not why it won’t happen.”
The 150 Blackstone facility will open in January 2017.