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September 23, 2007

Long path to Merrimac Landing

Victor Tine

Newburyport has a chic, upscale image today and property here is considered a valuable commodity, but in the 1970s, investing in downtown Newburyport real estate was no sure thing.

The first attempt to construct a new building on urban renewal Parcel 8 failed in 1976. Parcel 8 was a vacant lot next to the Green Street municipal parking area, which had been created by the demolition in 1968 of six or seven old buildings fronting on Merrimac Street between Market Square and Unicorn Street.

In April 1977, more than a year after the first Parcel 8 building project fell apart, the Newburyport Redevelopment Authority was ready to try again.

The NRA selected a new developer: Town House Square Associates of South Hamilton.

Backed by a consortium of six banks, Town House Square Associates unveiled a design by the Newburyport firm Jonathan J. Woodman Associates that included two buildings that would occupy only 40 percent of the 17,500-square-foot parcel.

But in August, financial support for the development abruptly collapsed. The banking consortium, concerned about the return on its members’ investment, pulled out of its financing commitment, throwing the project into disarray.

The NRA agreed to give the remaining Town House partner, Richard Martin Development Co., additional time to seek an alternative source of funding. The search proved fruitless, and the Martin company dropped out of the project in February 1978. On April 3, the NRA officially “de-designated” Town House.

Parcel 8 continued to be used for parking.

Near the end of 1978, two local real estate brokers submitted a proposal to the Redevelopment Authority that would have left 80 percent of the parcel as open space. Jerry Lischke and David Tierney, who operated the Harbor Realtors agency, proposed two three-story, Federal-style buildings, with stores on the ground floors and offices on the upper ones.

Mayor Richard Sullivan, who had been elected in 1977, asked the NRA to hold off making a decision. He said the city needed the approximately 42 parking spaces Parcel 8 provided. He also said additional commercial space would compete with fledgling businesses elsewhere in the recently restored downtown. The NRA went along and shelved the Harbor Realtors plan.

In mid-March of 1979, the authority voted to once again accept development proposals on Parcel 8. NRA Executive Director Thomas Real suggested that a small hotel would be a good use of the property.

Other urban renewal matters — mostly lawsuits over the central waterfront — occupied the NRA for the rest of 1979 and 1980. It wasn’t until March 1981 that the Redevelopment Authority once again picked a developer for Parcel 8. Local architect Woodman, along with investors John Merchant of Windham, N.H., and Maurice Needham of Andover, proposed a design that was essentially a revival of the one Woodman had unveiled in 1977 on behalf of Town House Square Associates. There would be nine “bays” for retail shops on the ground floor in two commercial buildings on the site, with offices and residences on the upper floors.

Woodman said financing should be completed within 60 to 90 days with a construction schedule of 10 months.

In August 1981, the development team — now down to just Woodman and Merchant — obtained a special permit from the zoning Board of Appeals for their mixed-use proposal. The City Council did its part in April 1982 to facilitate the development, granting the developers curb cuts for a planned bank drive-up window.

During the summer, the developers attempted to reduce costs by proposing a clapboard facade for the side of the buildings that faced the municipal parking lot, but the NRA insisted on brick.

NRA Chairman James Farley signed a purchase-and-sale agreement on the 17,500-square-foot parcel at the end of May, but Woodman and Merchant held off.

Things started to unravel for Woodman and Merchant in August 1982, when one of the project’s major tenants backed out. The international insurance brokerage firm Alexander & Alexander had been planning to lease 5,500 square feet of office space in the Parcel 8 building, with an eye toward future expension. Instead, the company decided to rent space in a former shoe factory at 44 Merrimac St. (the building now houses Glenn’s Restaurant and Cool Bar on the first floor).

Alexander & Alexander had a lease in the Ferry Wharf building that was due to expire in December, and the firm needed a larger space. The Parcel 8 construction schedule called for completion in the spring of 1983.

The loss of the principal tenant put their financing in doubt, and Woodman and Merchant were facing an Oct. 15 deadline to rescue the project.

In October, Woodman and Merchant sought an extension of their designation as developers, hoping to find a new anchor tenant.

Although the pair had the support of Mayor Sullivan, a three-member majority of the NRA board voted them out on Oct. 14.

The NRA wasted no time in putting out a new call for developers. Two firms — Myerson/Allen & Co. of Boston and Osceola Development Corp. of Waterville Valley, N.H. — submitted proposals in early November. Myerson/Allen was in the process of converting an industrial building on Charles Street into the James Steam Mill housing for the elderly and disabled. Osceola, primarily a builder of condominiums, had been an unsuccessful contender the previous year for the rights to develop the waterfront.

Osceola got the nod in November for a three-story structure with retail stores on the ground floor, offices on the second and residential condos on the third. All the units would be condominiums.

Meanwhile, City Councilor Ralph Ayers led an unsuccessful attempt to have the city keep Parcel 8 as an auxiliary parking area to the adjacent Green Street main lot. The proposal fell short by a 6-4 vote at the end of November.

Osceola broke ground the following April on its proposed $2.1 million building, constructed of steel-reinforced concerete, faced with brick.

By February 1984, most of the 10 ground-floor storefronts were committed, but the structure was not yet completed, and the NRA wasn’t ready to relinquish control of it. Osceola President William Hayes did manage to persuade the NRA to release some of the condo units as they were sold.

Exterior work such as landscaping and decorative planters dragged on into the summer, but the building was essentially finished and open by the end of July.

The term “Parcel 8” gradually faded from the local lexicon. Parcel 8 had become Merrimac Landing.

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