Pivotal steps ahead for planned Eagle Mill project in Lee

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LEE — With local approvals in hand, developers of the former Eagle Mill have moved into the critical state-funding phase of their $60 million project.

In the coming weeks, Mill Renaissance LLC and its partners look to convince the Massachusetts Historic Commission that revitalizing the former paper mill deserves historic tax credits.

The development team is also seeking housing tax credits from the Massachusetts Department of Housing and Community Development.

"There's nothing more important than that. If we get them, we're in great shape," principal developer Jeffrey Cohen said in a recent Eagle interview.

The state historic tax credits would boost the chance of securing federal historic tax credits and other funding from the commonwealth.

"We get the historic tax credits, that gives us leverage for the housing tax credits and we'll be off and running," said state Rep. William "Smitty" Pignatelli, D-Lenox.

Financing pillars

The tax credits, other state financing and private loans would be pillars in renovating three of the Eagle Mill's historic buildings as well as new construction on the 6.4-acre site at the north end of Main Street.

Cohen and his development team spent more than six years planning and redesigning the mixed-use endeavor of affordable and market-rate housing, a Faneuil Hall-style marketplace, commercial space and 72-room, extended-stay hotel.

Construction is scheduled to start next November and take 18 months to two years to complete.

The necessary municipal approvals came in the final weeks of 2018 as the Lee Planning Board, Zoning Board of Appeals and Conservation Commission all signed off on the project.

In addition, the town in mid-October secured a $4.9 million MassWorks grant to help fund the replacement of nearly 2 miles of waterlines running to the town's water treatment facility mill site at the north end of Main Street. The larger water main also will improve fire protection in the downtown.

"That was probably the shot of adrenaline from the state that gave the project validity," Pignatelli said.

The state lawmaker and developers caution that the grant doesn't guarantee future state funding.

In a letter Mill Renaissance received just before Christmas, the Massachusetts Historical Commission called for several revisions to the preservation plans for the three buildings being saved. The corrections that Cohen said can be easily addressed concern replica doors, keeping exposed certain interior historic features and restoration of masonry.

Having missed a previous funding cycle, Cohen said the most significant statement from the commission's three-page letter was encouraging the developer to reapply for the historic tax credits by Jan. 15.

"If they felt that the project had no chance of receiving credits they would not encourage us to reapply," he said.

Meanwhile, Mill Renaissance's housing partner, Rees-Larkin Development of Boston, is confident of proving to state housing finance officials that the housing tax credits will be well spent, according to Jon Rudzinski, a Rees-Larkin principal.

"We'll be able to demonstrate a need in Lee for the affordable housing," he said. "It's basically in the center of town, and that's a plus."

Housing plan

Rudzinski's company will create 78 units, evenly split between affordable and market-rate housing. Of that, 35 units will be in the renovated Union Mill section of the Eagle Mill. The remaining 43 units will occupy a new apartment building on the eastern end of the site now occupied by a 1960s-era metal building that is being demolished.

The Berkshire Housing Development Corp. will manage the apartments. It also manages the Rice Silk Mill apartments in Pittsfield, another Rees-Larkin mill-to-housing conversion completed more than six years ago.

Rudzinski expects several rounds of funding to secure the state tax credits, as was the case with the Rice Silk Mill project. But the wait won't hold up construction.

"You can finance with projected credits as long as it's a reasonable projection," he said.

The project's centerpiece is the public market located in the Eagle Mill historic building that abuts the Union Mill.

Cohen has said the market would be akin to Faneuil Hall Marketplace in Boston. It would include a restaurant, small brewery and other commercial establishments. The Marketplace would be the lead entity for this commercial space, bringing 25 years of food service to the project. The Marketplace provides catering and has three eateries in Pittsfield, Great Barrington and Sheffield.

The machine building is the third historic structure targeted for renovation and several uses, according to Cohen.

"A fitness center is interested; we're also chasing a bookstore or possibly a cafe," he said.

As for the 72-room hotel, it would front the property on West Center Street. The lodging would supplant the row of houses the developer is buying between the current entrance to the mill and the bridge crossing the Housatonic River.

However, state historical officials want background on the homes, indicating they could have an "historical association" with the mill, according to the commission's letter. Razing the houses are crucial to the project, according to Cohen.

"We will show the houses weren't owned or used by the mill. We will document that these buildings are old, but not historic and not related to the mill," he said.

The developer would prefer to locate the hotel opposite the mill, taking advantage of expanded parking for the project. If the hotel is built off-site, the original spot could be additional apartments, Cohen has said.

In order to supply the parking for the mixed uses that zoning requires, the developer needs to buy four parcels across the street that stretch south along the railroad tracks. Combined, the four lots would provide 162 of the 325 parking spaces needed, 72 designated for the hotel.

The properties include the former Pumpkin Patch Quilts, now on Main Street, and the building next door housing Ingegni Salon and Baja Charlie's restaurant. Cohen has said he plans to close on all four properties in early 2019.

The developers plan to move the crosswalk on West Center to improve the pedestrian link between the mill site and off-site parking.

Dick Lindsay can be reached at rlindsay@berkshireeagle.com and 413-496-6233.

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