The long and the short of the article was that they were awarded the bid for $1 versus the abutter at $50,000 since there was more upside. Pharmasphere plans to invest 5.5 milion to build and equip a 50,000 square foot facility employing about 40 people. The key being that construction would start in March. When I say March, I mean March of 2008 and Pharmasphere would be moved in this year. On the surface I felt bad that the abutter at 50,000 lost to a bid of $1, but a 5.5 million dollar facility with 40 employees is not a bad deal either.
Here is the problem. It is some 18 months later, the winning bid has yet to take title, has not done a very good job maintaing the site as required in the LDA (land disposition agreeement) and has not even pulled any permits to start work. Remember according to the article last January this should have been open by now.
Now for the WoMag article yesterday. Maybe it was unfair to say Pharmasphere has benefitted from $10 million in public funds. Technically 6.9 million has been invested in infrastructure and clean up at various sites. Any winning bidder at this parcel, future parcels and the neighborhood in general has benefitted from the 6.9 million. It is not unfair, however, to say that Pharmaspere now benefits from a 2.5 million HUD guaranteed loan, which will require that 51% of the employees be low to mod income.
The interesting part of the WoMag article is that the cost now is pegged at $17 million? Last year it was 5.5 million? I feel that when Pharmasphere was unable to get the financing that they anticipated that they would get to start construction, at no fault of theirs, the bid should have simply be redone.
- signed an LDA that in essence gives them until September of 2010 to take title to the property (almost 3 years from the award)
- co-signed on a 2.5 million dollar loan
Let me ask you this, what if we rebid the property and said:
- sale price $1
- you have until September 2010 to take title
- City of Worcester will help get you a 2.5 million HUD guaranteed loan
Do you think we would have gotten some bids?? In the end I just do not think it is fair to put out an RFP and then after a bid is awarded come up with special financing. It is simply not a fair bidding process .