Once funding is completed Court Square renovations can begin

Feb. 27, 2019 | G. Michael Dobbs
news@thereminder.com

SPRINGFIELD – What is preventing the start of renovating the former Court Square office and hotel building into market rate apartments – including 54 units designed to meet MGM Springfield’s commitment to the city – is $5 million.

Michael O’Brien of Winn told city councilors on Feb. 25 the funding gap of about 5 percent of the estimated $55 million project is still being sought. He hopes that within a week the source of that funding will be found.

The discussion was at the meeting of the Casino Oversight Committee of the council. Chair Michael Fenton said the committee was refocusing its energy on this issue.

MGM Springfield, as part of the Host Community Agreement, is obligated to construct not less than 54 market rate apartments. The apartments were originally part of the casino itself, but were moved off campus. The former Springfield Public Schools office building on State Street was later designated as the site for about 30 of the apartments. At the request of the city, MGM halted development of that property to enter into a discussion about partnering with Opal Development in its effort to renovate and rehabilitate the Court Square building into apartments and ground floor retail space.

Fenton said the council approved the change in plans for the apartments and described it as “a good direction to head.”

O’Brien, called the historic structure as a “gem of a building” but that it has “its own set of challenges” that has come from years of be being vacant. He explained the building has to be brought up to modern code, as well as returned to its historic roots.

O’Brien added the developers have committed the project will be accomplished with union labor.

To illustrate the costliness of the renovation, O’Brien said the mortgage cost of creating 74 apartments and 12,000 square feet of retail space would be $7 million.  The actual cost of $55 million has to be made up through historical tax credits, federal and state funding and $11 million from MGM Springfield.

Once the additional $5 million is secured, the closing of the building could take place sometime from October through December of this year. Construction activities would then start with an anticipated completion in the fall of 2021.

City Solicitor Edward Pikula noted the development of Court Square is “extremely important to the city dating back to the ULI study.” He was referring to the Urban Land Institute assessment of the city in terms of downtown development that was undertaken during the administration of Mayor Charles Ryan. The study said that in order for downtown to thrive it must be a neighborhood and businesses will follow once there is much more housing.

Pikula noted an extension must be granted to the developers of 30 days in order for them to be in compliance with deadlines set by Host Community Agreement. He added the project is not yet a “slam dunk,” and that MGM Springfield should have a “Plan B” for the housing commitment.

After the meeting Fenton said, “There is no denying it’s been a long road. It’s a complex project and one that’s worth waiting for.”

He added the developers have been able to reduce a $30 million funding gap to just $5 million in six months.

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