Market Square building gets a makeover

Market Square building gets a makeover

Secretary of State Nellie Gorbea stands on a veranda attached to the back of the living space at 40 South Main St. (Breeze photos by Sandy Seoane)
New Residence at Market Square will provide housing, space for entrepreneurs

WOONSOCKET – A downtown building that sat dormant for more than a decade was declared officially revived this week as NeighborWorks Blackstone River Valley celebrated the grand opening of 40 South Main St.

The $3.3 million renovation project began in 2014 and has resulted in the complete conversion of a former hardware store into six, one bedroom luxury apartments; a meeting space; a rooftop patio; a basement rental area for small businesses; and a kitchen “incubator” space, which will provide top of the line appliances to small-time local cooks and bakers looking for a chance to sell their wares.

Outside the building, which overlooks River Island Park, a public market plaza will give those same vendors space for kiosks.

“It’s for entrepreneurs who would like to start up their own little business,” said NeighborWorks Real Estate Development Project Manager Paula Rezendes. “Folks can cook inside and have a kiosk in the open market.”

NeighborWorks officials are still hashing out the details of how the incubator space will work, but Rezendes said participants will likely buy a membership to the kitchen and secure hours.

The six housing units in the building have all been rented – three men and three women are slated to move in soon – and the building has a waiting list of additional potential tenants. The one bedroom apartments cost $700 per month, and include some 750 square feet of modern space with a kitchen, living room and bathroom.

Secretary of State Nellie Gorbea was among a small group to tour the two-story building at a ribbon-cutting ceremony on Monday.

“Those who have concerns about affordable housing can look at this and see how wonderful the right kind of development truly is,” Gorbea noted, while standing on a new veranda overlooking the park. “I came at the beginning of the project and it’s really amazing to see how it’s changed within months. This is what community development is all about.”

The project was the result of a collaboration between private and public organizations, groups and businesses, with funding coming from a number of sources. Bank of America provided $1,400,000 in low income housing tax credits while Bank of Boston and Navigant Credit Union offered $350,000 in federal home loans. Additional funding came from NeighborWorks America, Building Homes Rhode Island, R.I. Housing Resources Commission and HOME Funds from the U.S. Dept. of Housing & Urban Development through the city of Woonsocket.

“No one organization that was involved could do this by themselves,” said Gorbea.

Rhode Island State General Treasurer Seth Magaziner expressed similar views.

“This is the product of partnerships,” Magaziner noted.

Bill Hatfield, Rhode Island state president for Bank of America said it is the seventh NeighborWorks project his company has been involved with over a 20-year partnership.

“The opportunity we have is here. It starts with affordable housing. It starts with community development.”

The highly visible property at the corner of South Main Street and Truman Drive was once Mulvey’s Hardware and had sat vacant since 2003.

“For 70 years, the city landmark provided stable employment and fulfilled orders for more than 30 local factories and mills,” a release on the opening noted.

The construction project is believed to have supported more than 25 local small businesses and NeighborWorks officials said that the housing units should generate $100,000 annually in consumer spending.

“This is what we need more of: people reaching out and saying ‘how can we find creative ways to do something really great,’” Magaziner said.

“The greatest work that’s going to be done here will be by the entrepreneurs that will come in,” he added, pledging to continue to support such projects. “They are the engine of our economy.”

U.S. Sen. Jack Reed, the ranking democrat on the senate subcommittee on housing was also among more than a dozen officials to hail the launch.

“We are celebrating this reinvention and this redevelopment,” Reed said. “It’s just the kind of innovative development that we need not just in Woonsocket but the whole country.”

And the renovation of the 14,000 square foot space is just the start of what NeighborWorks has planned for the area. The organization has purchased four of the six buildings in the Island Place Historic District, an area that also currently includes River Falls Restaurant and the Museum of Work and Culture.

The “hub” includes two large, adjoining buildings at the center of the complex, which until recently, were known as “Le Moulin,” and a small building behind the former mills that once housed the Island Machine Company.

Together, the NWBRV properties will be developed with the goal of creating an envisioned “ArTech Hub,” a thriving center of growth at Woonsocket’s center, based on arts and technology including around 46 units of affordable rental space to compliment an array of commercial businesses.

“We’re really trying to encompass all the different needs that make up a neighborhood,” said Rezendes.

All of the buildings that make up “ArTech” are on the National Register of Historic Places and work on the remaining three properties is expected to begin soon.

Members of the Marching Milkman Band perform at the opening of 60 South Main St., the latest development by NeighborWorks Blackstone River Valley. According to NeighborWorks Executive Director Joseph Garlick, band members Emily Lisker and Bill Calhoun have played a key role in building the arts community in Woonsocket.

Comments

Great to see much needed investment on Main St, but I'm curious about the economics of the project. $3.3m for a ~14,000 sqft building works out to $240/ft. That's a huge price tag. Using some "back of the envelope math" the market value for the building is $1.3m max. This assumes $4,200 (700*6) for the apartments and $12/ft (or $8,600/mo) for the remaining commercial space. $12/ft for the balance of the space not allocated to residential is very optimistic. Using these numbers we can back into a $1.3m valuation if we assume a buyer will accept a 8-9% annual rate of return. Obviously, we have negative returns at $3.3m. (I'd emphasize that these economics aren't completely unique to this project. Historic restoration is expensive! New construction could have been as much as 20-33% less on a per foot basis.)

I put this out there because I think we need to look critically at public's ROI when public dollars are spent. 40 S. Main checks all the boxes for intangible community wellness returns, but I'd like to hear more about the long-tail of future private investment that will likely follow this "loss leader" project. We owe it to the public to have these honest assessments of our successes and our failures.

Neighborworks does quality development. Lets hope that 40 S. Main creates the case for future private development.