I-4, C-2 draws no bidders

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Gloucester has had no takers in the bidding process to acquire the vacant, city-owned property know as I-4,C-2 on Rogers Street. Mary Muckenhoupt

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February 9, 2012

I-4, C-2 draws no bidders

By Steven Fletcher Staff Writer The Gloucester Daily Times Thu Feb 09, 2012, 01:58 AM EST

The I-4 C-2 property will remain an undeveloped lot on the city's waterfront, at least for the immediate future.

After a season of "idea development" and three months out for bid, 10 companies looked at the site and potential project.

But when the requested bidding closed Wednesday, not one of them made a formal proposal.

In its request for proposals, the city asked for a $10,000 commitment deposit, with proposals aimed at generating at least $70,000 in tax revenue for the city and strengthening the waterfront.

Now, with no proposals in hand, the city is sending a letter out to each of the ten companies asking what turned them off to the property, Donna Compton, the city's purchasing agent, said Wednesday.

"I don't want to speculate," said Mayor Carolyn Kirk, "I want to find out directly from individuals who had some definite interest in it what obstacles they saw."

Kirk said the city will ask the developers and find out what the market has to say about that property.

When they find that out, she said, then the city will decide where to go next. But, until then, the city has to do something with the property. And as the tourist season approaches,

Kirk said she's working with the Department of Public Works to make it a parking lot for the time being. That allows the city to pull some revenue out of the lot, she added.

"We can't go another summer with it being an unsupervised lot," she said.

The city put out a request for proposals (RFP) for the parcel last November, culminating last year's "idea development," proposals and listening posts. With that RFP, the city asked for a proposal that would improve the waterfront economy through mixed fishing, marine industry and tourism uses, and generate tax and lease revenue for the city. Kirk had said would need about $70,000 in revenue to cover its costs in purchasing the parcel.

It acquired the property for $1.5 million from Boston developer Jeffrey Cohen in June 2010 with the help of $800,000 through a state Seaport Advisory Council grant.

Cohen bought the property in 1986, and after several frustrated attempts to develop the site, he gave up on it. The property lay fallow for decades until the city cleaned the property up when it purchased the site. But without a proposal, the site new leaves the city in the same place it left Cohen — for the moment anyway.

Part of the problem, said Ronn Garry, a local financial consultant, comes from the property itself.

The I-4, C-2 property sits off Rogers Street in the city's Designated Port Area and the Marine Industrial district. The DPA requires that half the site set aside for water dependent marine industrial use.

That includes commercial fishing, marine maintenance facilities, etc. It precludes anything that isn't water dependent and prohibits hotels and residences — and those restrictions pose obstacles for any developers, Garry said.

The property, he added, is also landlocked as the developer wouldn't direct control the wharf behind the property. That's currently managed by the city's Waterways Board, and is home to several commercial lobster boats. While the city hoped to tie the two parcels together by leasing, the lack of control would worry developers, said Garry.

Gloucester is also competing for these developers with other cities looking to re-ignite their main streets, waterfronts and industries, he said. That means I-4, C-2 is a tough property to "sell" when it's easier for companies to go and build on a less regulated piece of land. And the city's RFP doesn't call for selling the site anyway — any developer would be leasing the property from the city.

"The I-4, C-2 site holds, and is, the holy grail of the economic revitalization of downtown," he said. "(But) when you have the amount of regulations involved on a property like this, it's a problem."

Sarah Garcia, the city's community development director, said Gloucester has to do learn from potential developers what didn't seem to work for them. She said that, if that means pursuing regulatory changes or changing the scope of the RFP, the city will look at those options.

"They were interested," she said of those who sought RFP packets. "So what stopped them?"

Steven Fletcher may be contacted at 1-978-283-7000 x3455, or sfletcher@gloucestertimes.com. Follow him on Twitter at @stevengdt.