GloucesterTimes.com, Gloucester, MA

January 18, 2013

Developer adds $1.4M for work in Fort

By Richard Gaines
Staff Writer

---- — The developers seeking a 101-room beachfront hotel are now kicking in an additional $1.4 million contribution to the city’s projected $7 million investment in offsite infrastructure improvements along Commercial Street and Fort Square.

The Beauport Gloucester Hotel project attorney John Cunningham announced the commitment during Wednesday night’s meeting of the City Council’s Planning and Development Committee, which, along with the Planning Board and the Conservation Commission, is working through the detailed plans subject primarily to fine tuning.

There are numerous problems to be solved — off-site parking and ownership Pavilion Beach, among them-— and those were discussed at a 90-minute committee update, the first of the new year in the official process. Much of the conversation turns ontechnical issues with advice coming to the city from multiple consulting firms that have been retained by the city.

Beauport Gloucester LLC had previously made a $600,000 payment to the city for infrastructure planning and design.

The hotel construction itself has been estimated to cost more than $20 million. Windover Construction, a Manchester-based builder and developer, was introduced as the building contractor if and when the project gains the needed permits and approvals.

The infrastructure contribution would be made in thirds as reimbursement, with $466,666.due at the time the building permit was issued, and an equal amount due six months thereafter and the final installment in exchange for the certificate of occupancy.

With a $3 million grant from the state MassWorks development agency confirmed last week, Mayor Carolyn Kirk announced a plan to complete the offsite infrastructure improvements — to the water, sewer and drainage systems — at an estimated price tag of $7.5 million.

“When taken together,” Kirk said in a memo to the council, the approach “provides the resources to rebuild the infrastructure which will benefit the businesses along Commercial Street, the residences in Fort Square, and support new growth and economic development for the city.”

Requiring council approval, the plan of the mayor carry out utility upgrades with $1.6 million of free cash from the Sewer Enterprise Fund and $1.5 million in free cash from the general revenues. Gloucester’s 2012 books closed with $4.8 million in free cash certified by the state’s Department of Revenue.

The proposed financing package to upgrade the neighborhood’s utilities allowed the administration to announce a tentative timetable for the invitation to bid on the water, sewer and drainage work this spring, with work to be carried out this summer and ending in 2014.

Kirk and Public Works Director Mike Hale both said they believed demolition of the derelict Birdseye packaging and storage facility and construction of the city’s first year-round hotel could go forward while the utilities were being improved.

Planning and Development Committee Chairman Bruce Tobey said he thought committee might be in a position to hold a special meeting on Feb. 27 to issue a recommendation on the project to the full council as soon as March 5.

Sheree Delorenzo of Cruiseport Gloucester and Jim Davis, the owner of the New Balance Shoe Co., have created Beauport Gloucester LLC to develop the hotel. They first partnered behind Cruiseport Gloucester, which debuted in 2007.

In addition to the 101 rooms on three floors above the ground and beach level parking, the plans include a restaurant and two function rooms. Vehicles would enter an open lot on Commercial Street and proceed to a hotel entrance leading to a reception area on the first raised level which also is designed for the restaurant, deck and function space.

The rooms occupy the second and third floors above the parking, with 147 cars, which is at the ground level.

Councilor and Planning and Development Committee Joe Ciolino reiterated the importance of the city’s gaining legal title to Pavilion Beach.

”The beach is the No. 1 issue here,” he said. “Unless it is settled, you’re in a bind.”

Cunningham said the developer was prepared to put the deed in escrow until the project is completed and an occupancy permit is written.

“We understand,” he said to Ciolino. “But the owner has substantial investment in the land and development,” and lenders, he added, needed to be satisfied that their investment was in property that the developer controlled.

”The city hasn’t been able to prove it has title,” Cunningham said. “We’re working on this.”

Cunningham also said the developer is working out satellite parking for periods of maximum usage and cited as good examples the Hawthorne and Salem Waterfront hotels in Salem.

He also noted that with valet service at times of peak demand, the ground level garage could squeeze in another 30 or more cars.

Richard Gaines can be reached at 978-283-7000, x3474, or at rgaines@gloucestertimes.com.