, Newburyport, MA

January 3, 2013

Karp floats plan for hotel

Located on former Fitness Factory property on Merrimac Street


---- — NEWBURYPORT — Real estate developer Stephen Karp is in preliminary discussions with city officials to create a hotel on the corner of Merrimac and Titcomb streets, on the site of the former Fitness Factory and its adjoining parking lot.

Though no permits have been issued, Mayor Donna Holaday said that the structure could tentatively include “80 to 85” rooms.

Holaday said that she met with Karp recently and discussed numerous matters relating to the waterfront.

“Attempting to put a hotel on the waterfront would difficult,” said Holaday. She said that environmental and flood-plain issues would be obstacles. Also, a waterfront hotel could generate public opposition.

The plan is a significant departure from ideas that Karp’s team has proposed in the past, because it does not place the hotel on the waterfront. Instead, the proposed site is on higher ground, about a block away from the Merrimack River. Several multi-story buildings stand between the site and the river, blocking a direct view of the water.

In the past, Karp has not proposed any specific plans for his 75 Merrimac St. property, which now houses Vanguard Key card fitness club. However, the city has eyed that property as the site of a municipal parking garage, and has sought grants to put together preliminary plans. It’s unclear where the parking garage plan might migrate to if the hotel plan becomes a reality.

Karp’s previous plans for a hotel have focused on the waterfront, where he has invested millions in buying up and assembling large parcels of land.

Karp owns two large swaths of waterfront land in the downtown area to the east and west of the Newburyport Redevelopment Authority’s land. During a public forum in 2008, Karp gave a broad description of what he hoped to do someday with his western swath, an area between the Black Cow Restaurant and Michael’s Harborside restaurant. Those plans included a hotel and mix of shopping and residential space. However, Karp’s team has not filed any plans to develop that area.

In 2011 his local real estate team briefly discussed building a hotel on his eastern swath, at the site of the Oldies Marketplace off Water Street. Those plans were abandoned.

Karp’s New England Development (operating here as Newburyport Development) owns about 50 parcels in the downtown, including restaurants, marinas and office buildings. In the area of Titcomb Street he owns a handfiul of adjoining properties.

Karp met with Holaday in part to keep abreast of developments here, including status of a proposed parking garage and the Newburyport Redevelopment Authority’s plan to develop park and commercial buildings on 4.2 acres it owns along the riverfront.

No information was released on whether a hotel and/or motel would be run by a chain or independently.

Holaday mentioned Karp’s interest as part of a year-end interview assessing the past year and looking into the future.

She said that one key project city officials will pursue in coming months will be strengthening the bulkheads downtown along the river.

The city is in line to receive a $2 million matching grant from the state Seaport Advisory Council, and is scheduled to meet this morning to discuss steps that must be taken before construction can be scheduled. Work could begin this spring.

Another project that Holaday is pursuing is a study of the water and sewer system on Plum Island. (The city of Newburyport manages the system though many residences there are located in Newbury.)

Holaday said she has met with state officials to study and analyze the system, which she recalled cost close to $30 million to develop. A report will be issued in late February or early March.

Holaday said that her priorities for 2013 include getting re-elected, pursuing the two school building projects that voters have approved and to continue to upgrade technology and communication tools at City Hall.

The city will unveil a new website in coming weeks, for instance, and in the last year the phone and computer systems have been enhanced.

The mayor said a related goal is to cut down on the amount of paper involved in the city’s purchase-order system.

Looking back on 2012, Holaday said she was pleased with municipal developments, including the opening of the Hines Bridge, the construction of a new clearwell and pumping station and progress on completion of the wastewater treatment plant.

She said she was impressed with citizen involvement that resulted in the approval of two school building projects and a senior/community center. The mayor said she was pleased with the launch of paid parking and a municipal meal tax, which has enabled the city to improve sidewalks.

Holaday expressed satisfaction with the federal funding of a $3.6 million jetty-improvement project at the mouth of the Merrimack River and a $1 million state grant to create a roundabout at the busy intersection of Merrimac and Spofford streets.

The mayor expressed optimism that the city would be able to receive a favorable bond rating as it prepares to seeking funding for the school projects.

“This year we won a major award for our budgetary process,” she said. “We recently talked with Standard and Poor’s (which assigns bond ratings), and I think we made a strong presentation about the soundness of our finances.”