In the Telegram, click here.
In 1987, I started working downtown in at 303 Main Street for the State Mutual sales office. In 1990, the office moved to 10 Mechanic Street, where we ended up starting Advantage Benefits in 1992. in 1997, we moved to our current location on Pleasant Street. Bottom line we have been working downtown for over 20 years and have vested interest in the development of downtown Worcester.
In the newspaper today, I was quoted that "there is no economic spinoff to date" in regards to the Hanover Theatre. I hope this changes over the next few years, but I stand by that quote. The story goes on to quote city officials, who maintain that the theater has provided a considerable boost to restaurants around the city. Let me get this straight we invested $4 million in tax breaks/subsidies and 13 million in federal/ state credits in this 32 million project to help the restaurants around the city?
Lets be honest. There has not been the spinoff that was projected. Not even close, but lets hope that the several major companies, who are interested in key buildings in the Federal Square area buy them and develop market rate housing as mentioned in the story. Now if that happens, then that can be called "economic spinoff".
Here is a little problem that has been created. The Goral block next to the theatre was bought for 1.2 million and some $1 million on renovations have been made, but the assessed value is $473,000? Jahn, help me how do you buy a building for 1.2 million that is recorded in the registry two years ago, pull a permit and invest another $1 million and only get an assessment based on $473,000? Meanwhile, one of the owners maintains that he did not over-pay and he has an appraisal to prove it. Maybe he should send that to the assessor and get a higher valuation on his building?
More importantly if I owned one of these key parcels on Federal Square and saw the Goral block sell for $1.2 million, what would I sell my building or parcel of land for to one of the major companies the City Manager mentions? Answer--alot more then the market value.
What really bothers me more then anything, however, in this story is that the company that owns the Goral Block has been authorized for a $3 million federal "Recovery Zone" bond? Personally I never ever heard of these bonds? The Economic Development Office of the City of Worcester should hold an RFP and advertise these Recovery Zone Bonds, before they authorize anyone to get one penny of these monies.
Here is a press release on these bonds. If you go to the bottom there is a link to allocations around the country (worcester has been allocated approximately 8 million). In Billerica, for example, a Recovery Zone Bond, story here, is being used to attract a biotech firm to build a 70,000 square foot facility that will employ 75 full-time employees.
In Worcester we intend to give $3 million of our Recovery Zone Bonds (almost 50% of our allocation) to an owner that can not yet find a "destination" restaurant as a tenant? Not to mention owner just had another restaurant that they owned (55 Pearl) go bankrupt, another restaurant (City Park Grille) that they did not own just close within 4 months of opening and the City of Worcester is about to sink some $250,000 (parking garage on MLK) into 3rd restaurant all less then a half mile away. Seriously does anyone really think we should be investing 3 million dollars into another restaurant downtown???
Maybe the next new growth business after affordable housing in Worcester will be subsidized restaurant development? The only spinoff I really see from this project is now even more development projects subsidized with our tax dollars.