| G. Michael Dobbs
SPRINGFIELD – The rehabilitation and reuse of the 31 Elm St. complex is getting closer to realization.
Redeveloping the historic building – once a series of offices, shops and a hotel – has been discussed since the early 2000s. Now Mayor Domenic Sarno announced last week an agreement between the developers – Winn Development, LLC and OPAL Real Estate Group, LLC – and MGM Springfield is becoming closer.
As part of the Host Community Agreement, MGM Springfield has been legally obligated to construct 54 market rate apartments in the downtown area. Originally those apartments were to be part of the casino, but that plan was changed and the company purchased the former School Department building on State Street to be the location of 30 apartment units. The Sarno Administration asked MGM management to consider building those apartments as part of the 31 Elm Street redevelopment project.
Chief Development Office for the city of Springfield Tim Sheehan explained to Reminder Publishing that now the agreement is almost in place, the city, which once again controls the State Street building, will seek developers for it. Sheehan added the return of the building to the city did not cost the city anything.
Sheehan explained MGM Springfield would become a minority owner of the redeveloped 31 Elm St. by contributing $16 million to the cost of the project. Originally, Sheehan noted MGM Springfield had proposed putting $11 million into the project but has increased the amount meaning they will have an on-going stake in the completed project.
Parking for the apartment and retail complex has not yet been determined Sheehan noted, but should be part of the site review plan for the project.
According to the mayor’s office, The Elm Street Project will include 60 market rate upscale apartment units, 14 workforce apartments and approximately 12,000 square feet of first floor retail.
The completion of the final agreement between the developers, MGM Springfield and the city “should be announced in the very near future,” according to the mayor’s office.
At last week’s meeting of the Massachusetts Gaming Commission, Seth Stratton, MGM Springfield vice president and legal counsel, officials released a memo detailing their involvement in the project. MGM will fund the $16 million contribution to a dedicated loan fund to be administered by MassHousing. MGM will not seek or receive debt service on such loan and it will retain a minority non-voting ownership interest. MGM will “support the 31 Elm Development through the provision of parking spaces to support the 31 Elm Development.”
The next steps necessary, according to the MGM memo, include the execution of a cooperative funding agreement with all involved parties; amending the host community agreement; execution of a grant agreement between MGM and the city “pursuant to which $11 million of MGM’s funding to the Development fund effectively becomes a grant to the city and can revert to the city in the unlikely event that the 31 Elms Development does not proceed.”
Approval by the Gaming Commission, as well as the creation of an operating agreement between the development parties is also necessary.
Sarno said in a released stamen, “The Elm Street Project will not only provide market rate housing, as stipulated under the host agreement with MGM, but will also provide yet another major economic development project for our city that will complete our Court Square redevelopment thanks to the residential and retail components and the increased attractiveness of the Court Square area. My administration will continue to have ‘a can do attitude.’ This pivotal project adds to the list of projects that naysayers said would never happen in Springfield.”