Affordable apartments planned for vacant Southbridge mill

Telegram & Gazette (Worcester, MA)

Sept. 20--SOUTHBRIDGE -- A developer, only weeks after unveiling a $20 million makeover of the lobby of the Mercantile Center in Worcester, revealed a pair of ambitious projects in the former American Optical campus that he owns.

Charles "Chip" Norton, Jr., president of Franklin Realty Advisors, wants to convert a vacant mill building at 5-15 Case St. in the Southbridge Innovation Center into 48 "affordable" apartments.

Mr. Norton also announced a six-year contract to transform a traditional, off-line electric power plant into a state-of-the-art cogeneration facility. Franklin Realty Advisors' contract is with Trane Commercial Systems. A division of Ingersoll Rand, Trane will design, build, maintain and guarantee resultant energy savings. Construction is expected to begin this month with a target completion date of December.

The cogeneration facility will deliver more than one megawatt of power upon completion, providing more than 70 percent of the project's electrical needs and the majority of its thermal requirements.

Mr. Norton said the undertaking represents an investment of $5.6 million, supported partly by a $1.1 million rebate from National Grid with the remaining financing underwritten and funded by Middlesex Savings Bank and Massachusetts Development.

"This project demonstrates a huge vote of confidence in our future, and the viability of industry growth in central Massachusetts' commercial and industrial businesses," Mr. Norton said.

Mr. Norton was already considered the town's highest taxpayer, paying Southbridge close to $1 million annually, principal assessor Wilfrid Cournoyer said.

Concerning the housing project, Mr. Norton told a Town Council subcommittee last week he is in the process of listing 70,000 square foot 5-15 Case St. on the National Register of Historic Places. Doing so would allow financing capabilities to advance the adaptive reuse project with federal and state tax credits.

The building has been vacant since the 1980s.

The housing project, called "Southbridge Mills," is a private redevelopment and would be the first residential component of the Southbridge Innovation Center, which contains 1.2 million square feet inside of 12 buildings, including the 205-room Southbridge Hotel and Conference Center.

Plans call for the building to hold a dozen one-bedroom units, 31 two-bedroom apartments, and five three-bedroom units, Mr. Norton said. The brick apartments will have high ceilings and large windows. The building will hold community space, a mail depot, a nine-person movie room, bike storage room, fitness area, and community garden and seating that overlooks a mill pond.

It will take two years to get the tax credits, but if leased today, one-bedroom units would rent for $855 each, two-bedroom units would be $1,026 and three-bedroom apartments would be $1,186, said Charles Eisenberg of Housing Partners Inc., a project consultant.

The apartments are affordable in the sense that they are limited to households whose incomes are less than or equal to 60 percent of the area median income in a HUD-designated section of Worcester County, Mr. Eisenberg said. It would require in excess of $40,000 in income to lease a two bedroom unit, Mr. Eisenberg said.

Project architect Kerry Dietz said mill buildings make for good housing because they're usually the right dimensions and solidly built to hold heavy machinery.

She said plans call for the units to be sized comfortably, starting in the 600-square foot range. The roof, windows, elevator and stair tower will be replaced, but the existing and distinctive "AO" tower will be maintained, with new glass and lighting.

The housing project faces challenges concerning flood prevention rules and zoning.

According to the Federal Emergency Management Agency, portions of the property are in a flood plain. Mr. Norton said the hotel had to be raised three feet. Raising 5-15 Case St. a couple of feet is also an acceptable solution, said Mr. Norton, who noted that since the historic 1955 flood, a dam upstream and levies built on the property have greatly reduced the chance of a flood.

The property is zoned for industrial purposes only, so the project will be pursued under the so-called Chapter 40B process, which would allow the owner to obtain a residential permit without changing zoning for the entire area. Mr. Eisenberg said a use variance won't be pursued because courts tend to overturn them.

At $400,000 per unit, the project could not be supported by market rate rents, which is why Mr. Norton said he is pursuing housing tax credits.

Councilor Wallace MacKenzie expressed concern about the "affordable housing" designation of a potential tax credit. Mr. Norton's proposed rents, Mr. McKenzie suggested, are above what a low-income person in Southbridge could afford.

Mr. Eisenberg explained that the term was relative and meant "specific things" to the Internal Revenue Service and U.S. Department of Housing and Urban Development. For instance, he said, the income threshold for low income in Massachusetts is seven times what it is in Mississippi.

Mr. Eisenberg said the designation "doesn't say anything about who's going to be living here."

Town Manager Ronald San Angelo asked if Southbridge residents could get preference to rent the units. Mr. San Angelo said there are a number of people who pay decent money to rent from "slumlords." He said he would love to divert those residents to quality housing and tear down deteriorating buildings.

Mr. Norton said the state will allow him to give a local preference for up to 70 percent of the units, allowing for the creation of two categories of renters.

Mr. San Angelo said, "I think that's a home run if we can do that. We have so much of this garbage housing in town."

Mr. Norton bought the 150-acre AO facility in the mid-2000s. Not including the 315,000 square foot hotel and conference center, the center has 900,000 square feet of building space, of which a third is leased for office and manufacturing space. Quinsigamond Community College, Karl Storz Endoscopy America, Schott North America's glass plating operation, and a semiconductor refurbishing company are other tenants.

The developer also recently donated nearby riverfront to the town, and Southbridge has applied for a grant to make improvements and open a public river walk along this portion of the Quinebaug River. It would connect to Mr. Norton's apartment building.

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