City puts prime property on the market

On January 10, 2013, in Latest News, by The Somerville Times
Somerville city planners hope to breath new life into two valuable city properties.

Somerville city planners hope to breath new life into two valuable city properties.

Plans for Davis Square hotel, Powder House School

By Elizabeth Sheeran

Wanted: developers willing to turn a city parking lot into a quality hotel, or a shuttered school into a neighborhood asset. Benefits: Prime location in economically vibrant city. Cost: capital to buy and develop property, plus willingness to tailor project to community goals. Must work well with others.

Somerville city planners closed out 2012 by issuing Requests for Proposals (RFPs) for two development projects. The first would put a long-awaited hotel on the corner of Herbert and Day Streets in Davis Square, the current home of a 61-space parking lot. The second RFP would sell off the former Powder House Community School near Teele Square, which has been closed since 2004, and gives prospective buyers a wide range of options for developing the site.

Money from both property sales will go into the city’s Capital Improvement Fund for long-term projects. The Davis Square lot is assessed at around $1 million, but market forces could drive the sale price higher. “Location, location, location,” said city Communications Director Tom Champion. He said there’s no shortage of interest in the hotel project, which has been in the works since a 2006 consultant study found Somerville could support at least three more hotels, including one in the Davis Square area.

“There are a number of factors that contribute to the idea that this is a good site for a hotel. Certainly the proximity to Tufts and Harvard and MIT is one of them,” said Champion. “But there’s also been significant growth in the economy in that area.” He said Somerville is also getting recognized as a general travel destination, “for the crafts-based, make-your-own fun, many-streets-festivals quality of life here.”

According to the RFP, the city will only sell to a developer with plans to build a hotel. It doesn’t spell out the size or type of hotel, but refers prospective buyers to the 2006 study, which suggested a 100 to 125-room select or limited service hotel along the lines of a Courtyard by Marriot or a Hampton Inn, or a boutique hotel like Starwood.

Proposals “must be sensitive to quality of life issues affecting the local community and should attempt to minimize traffic, shadow, outdoor lighting, noise impacts and odor while maximizing landscaping, providing adequate setbacks, and screening transformers and rooftop utilities.” The city is looking for a development team with a proven record building hotel projects and working with the community. The RFP “strongly encourages” environmentally-friendly designs. And developers get extra points for including publicly accessible parking to replace the spaces being lost.

The city’s operating budget will lose the roughly $250,000 it gets each year from the parking lot’s meter fees and fines. But Champion said there’s a good chance that will eventually be replaced by hotel room taxes, given that Somerville earned over $600,000 in room taxes last year from its two existing hotels, the LaQuinta and the Holiday Inn.

And room taxes are just one piece of the expected economic benefit from the project. A hotel will create new jobs in the service sector. It will generate commercial property taxes from a site that isn’t generating any tax revenue today. And it will generate added business for the shops, dining and entertainment venues in the surrounding neighborhood.

Davis Square-based realtor Thalia Tringo said a hotel would add to the square’s already-lively nightlife, but the real plus would come in the form of increased daytime foot traffic. “It would be a huge boon for the retail stores during the day,” said Tringo. She added that neighborhood residents and businesses would rather not send their guests to stay in Cambridge hotels. “I’d rather see the room tax go to Somerville,” she said.

Like the Davis Square hotel project, plans for the redevelopment of the Powder House Community School are also intended to turn an underused city asset into an engine for economic growth. But in this case the RFP leaves the door pretty wide open as to what developers can propose to do with the site.

Champion said the decision to sell the Broadway Avenue property caps a multi-year review that found it just too cost-prohibitive to retrofit the forty-year-old school building for any kind of effective municipal use. An extensive community engagement process didn’t reach any specific decisions about what kind of development should replace the school. “The RFP was predicated on an effort to pull out the most broadly held community viewpoints, but not otherwise try to characterize community preferences,” said Champion.

The RFP lists options for the site that include commercial, office, research or residential uses, as long as the project adds value to the neighborhood. Buyers can either renovate the multi-level school building or tear it down and re-build from scratch. But any future structures can’t occupy more than 60 percent of the 80,000 square foot property.  The remaining 40 percent has to be kept as open space the public can use, with guaranteed pedestrian access from Broadway through to Holland Street.

The property value is currently assessed at just over $7 million. But more than $5 million of that is for the building, which may have no value to developers who plan to tear it down. There’s no way to know how much Somerville’s Capital Improvement Fund will get from the sale until buyers start bidding.

But the RFP makes it clear that purchase price is not going to be the deciding factor in choosing who gets to develop the site. The developer will have to reach out to the community and work with the city to get final approvals for the design, as well as the zoning changes needed to complete the project. And the RFP scoring is heavily weighted toward development teams who have shown they can do that.

Proposals for the Powder House Community School Property Disposition and Redevelopment are due by 11 a.m. on February 28. The submission deadline for the Davis Square Hotel Project is February 4. According to the RFP timelines, Mayor Joseph Curtatone is expecting to present preferred developers for both projects to the Board of Aldermen by sometime in March.

Champion said it’s all part of the city’s long-term strategy to actively manage development in Somerville. “Both of these projects are very much in keeping with the tenets of the SomerVision 20-year comprehensive plan,” said Champion. “These are areas for change that have been envisioned for some time now.”



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