Phoenix syndrome:
Mill buildings rise from the ashes of a former economy

By TODD A. PRUSSMAN
Essex County Newspapers

They were the engines of late 19th- and early 20th-century economies. Wherever mills sprung up, neighborhoods grew to surround them.

But as the shoe, textile and manufacturing industries chased cheaper labor south, the buildings that had housed the country's Industrial Revolution became idle.

Wayne Corley could hardly give a tour of the former Sylvania GTE plant on Loring Avenue in Salem without hearing anecdotes from prospective tenants: "How my aunt, my father, my brother worked here. This was a big place of employment from the `30s on."

Corley is the former executive director of the Salem State College Assistance Corp., a quasi-public authority created by an act of the Legislature to redevelop the former light bulb factory into a business incubator, a place for light manufacturing and technology business, and an expansion of Salem State College.

During a tour of the 200,000-square-foot facility last fall, Corley said the redevelopment plans were being geared to match the needs of the college with the North Shore business community.

In Newburyport, at the foot of a brick tower, Jerry Lischke points to a small set of double doors. Through here, former employees of the Towle Silversmith company passed each day on their way to work.

"Today, you couldn't park a bus here," he said of busy Merrimack Street, which lies just 15 feet from the footing of the four-story mill.

Redevelopment of the Towle building required not only money, not only tenants, but imagination. Where was the parking going to be? Where would people enter the building?

"The key was to turn the building around so that it no longer faced the street," he said. "We had to create a new front, to face this parking lot."

To do so, 30,000 square feet of buildings, which were added over the years "like a rabbit warren," were torn down to create parking, a new entrance and a courtyard for the building. The new front faces Newburyport Harbor. The old one looks out over the rooftops on the city's historic homes up to High Street.

And inside, a bustling environment is building with each new tenant. There are medical offices, a research and development company, and a relocation company, which together bring the occupancy rate of the 100,000-square-foot space to 75 percent _ two years after the redevelopment began.

Further upriver, in Amesbury, the former Merrimack Hat Factory fits in an elbow in the Merrimack River.

The 150,000-square-foot plant was the setting of a thriving hat-making operation that remained successful until wearing hats fell out of fashion.

From the '50s through the early '70s, a union group invested and strived to keep the business operating.

During the mid-'80s, there came numerous proposals to turn the prime piece of real estate into everything from 160 condominiums to an extension of Northern Essex Community College.

Gaining the support of local residents was especially difficult for early proposals. And when the economy bottomed out, debt sank the property into a bankruptcy from which it emerged in 1996.

Now, with permits in hand, Bill Sullivan of the Millwright Corp. expects renovations to be under way this spring to convert the Hat Factory into Hatter's Point, about 80 apartments and condominiums for residents 55 and over.

For Sullivan, success at the Hat Factory turned on its riverfront location.

"From East Haverhill to Newburyport," he said, "it's a beautiful riverways neighborhood. That's what people are really buying into."

From his perspective as a developer, the Hat Factory offers an opportunity to create a community that current zoning simply doesn't allow any more.

"If today that land were empty, you could build only a small portion of what's there," he said.

But equally key to his plans was the identity of his market, he said _ active empty-nesters who want a nice place to live without a lot of the maintenance chores that come along with a house and a yard.

Prior to construction, he has already collected more than 20 deposits. The target residents and lower number of units planned were well-received by the same neighborhood residents who had complained about earlier proposals.

"The tenant is the key," said Gloucester businessman Mac Bell, who in the '80s successfully renovated the former Gloucester Mills building on Maplewood Avenue and the current home of the Chamber of Commerce downtown.

Both were properties of the former Mighty Mac clothing company, which was founded by Bell's grandfather.

"I'm not a big condo enthusiast," Bell said of the Gloucester Mills project. "Yet in this neighborhood, looking at the reuse of the building, it was the only thing that made any economic sense."

Still, Bell faced significant resistance from neighbors. The mill backs up against public housing and was across the street from a strip club. It was also bordered by a rail line.

"This building was so challenged by location, it was a tough sled," he said.

The strip club closed, and eventually became a bike repair shop. The public housing eventually underwent its own multi-million-dollar renovation. And now 10 years after completion, Bell sees the Gloucester Mills project as successful.

But it wasn't profitable for him when it was completed in 1989.

"The average person doesn't have rose-colored glasses," he said, "and you've got to get the paint brush out and make it a reality."

Every old industrial property presents an individual set of challenges that have to be overcome to be successfully reused.

Almost nowhere does one gargantuan, industrial user replace another.

Amesbury businessman Dan Healey converted the former Bailey automobile manufacturing plants on Wall Street into professional and light manufacturing space that now is home to professional offices, a clothing designer, even a physicist. One year after his redevelopment effort began, he had filled the 80,000 square feet in one building with 14 separate businesses.

Is it feasible to bring in one large tenant? Not for industrial use, Healey said. His three-story Building 2, which is vacant, is not suitable for modern manufacturing with its multi-levels.

But one large high-tech company? "Absolutely."

"We had no question that professional and office space was the highest and best use," he said.

The Towle building with its spectacular view of the waterfront seems to be a property that could have been redeveloped for residential use. But Lischke said he didn't consider it because he saw more demand for professional office space.

A Realtor with Prudential Harbor Realty, Lischke is the one who pitched the renovation project to the building's owners, First Republic Corp. of New York, which counts among other projects the reuse of the 365,000-square-foot Waltham Watch Co. and the 1.5 million-square-foot Hannorah Mills complex in Pawtucket, R.I.

The charge he received from the company's president, Norman Halpern, was to come up with rental agreements for 25 percent of the space for at least two years and get the project through the permitting process. That was in 1996.

By May 1998, Pentucket Medical Associates had opened doctors' offices in the Towle building. By September 1999, the building was 75 percent occupied and Lischke was beginning to be concerned about the growth of his current tenants.

One tenant recently moved from a 4,500-square-foot space to a 15,000-foot area and is holding another 6,000 feet in reserve.

"We realize that we may need to respond to the success of the companies we have here," Lischke said.

That means a vacant lot once contemplated for townhouses may well become the site of a new building for the companies in the Towle building to expand.

Corley, too, was already seeing the companies under his roof at the enterprise center grow and he expected more.

The emphasis there, he said, will be assembling a mix of businesses that will have a synergy with neighboring Salem State College.

Technology and the Internet fit that bill especially well, and last fall Corley began negotiations to bring in a digital data transmission node.

"That will provide direct access to the Internet for businesses located here, and it will also provide connectivity through T-1 and T-3 lines for businesses located in the region," he said.

Internet-based businesses are well-suited to grow within old mill and industrial buildings. Renovations at the Enterprise Center and at the Towle building are including what's called smart wiring, to make office space computer ready.

Wiring buildings with cable to prepare the space for Internet technology has become as much a part of a renovation as wiring it for electricity or phones.

"E-commerce is the way a lot of existing businesses are operating now," Corley said, "and it's spawning new businesses altogether. I think people are really just starting to realize that now."

This is the game to the developers _ taking a relic of an old economy and turning it into something that will succeed in a new economy, one that is still in formation.

"It's so rewarding to take somebody else's cast-off and breathe new life into it," Lischke said, "to bring things back from abandonment and despair and make them beautiful. And just think, with a little luck, at the end you can make some money off of it."