A large apartment complex in downtown Springfield, Massachusetts was sold this summer to a New York City-based developer. A renovation plan will be announced this week. City officials say addressing the dearth of market-rate housing is a key to revitalizing downtown Springfield.
A 280-unit complex of townhouses, one-, two-, and three-bedroom apartments known as Morgan Square was bought by the SilverBrick Group. The company, in a press release, pledged to redevelopment the apartments for “luxury style living.” Mayor Domenic Sarno said the company plans to spend $6 million on the renovations.
"They are looking to sink some serious money into each and every one of these units."
The enhancements will include granite countertops, stainless steel appliances, and wood plank flooring. Additions will include a fitness center, game room and lounge. The property sits in the heart of downtown Springfield with frontage on Main Street. It is a block from Union Station, which is undergoing a $65 million renovation to a modern transportation center.
Sarno will join company officials on Wednesday to kickoff the renovations.
" We are continuing to try to move market-rate housing in downtown Springfield. It is quite a testiment for them ( SilverBrick Group) to come in. They feel very bullish about the city of Springfield," said Sarno.
A majority of apartments in downtown Springfield are rent-subsidized or designated for people with low incomes, with just 10 percent currently priced at market-rates, according to a recent study commissioned by the city that identified a strong potential for new market-rate housing downtown.
Study author Laurie Volk of Zimmerman/Volk Associates said the potential exists to build up to 1,550 units of new market-rate housing over the next five years in downtown Springfield.
" From our prospective ( Springfield) has really amazing buildings and streets and it just takes more people living here to make the downtown feel alive."
Among the assets the study concludes that should make downtown Springfield attractive as a place to live are historic buildings, employment opportunities, cultural and tourist attractions, parks and the riverfront, “walkability,” and access to Interstate 91.
" A lot of other cities would love to have the assets that Springfield has," said Volk.
The study looked at market potential as opposed to market demand, but Volk said housing developers should consider building lofts and single-bedroom apartments that other research has shown are currently in demand by young adults without children and by older adults looking to downsize from large houses.
Tom Kegelman of Home City Housing Development Corp. of Springfield said the challenges to building market-rate housing downtown are high construction costs and lack of financing.
"It is big investment. People need to put their money in for a long time before they get it back and they won't get the kind of returns they could get for the same development in downtown Boston or Manhatten."
Massachusetts has a new state tax incentive program for housing development in the older so-called Gateway Cities such as Springfield.
