Plumbing industry gets into the mix

–Multi-use projects abound throughout the region

THE MILLENNIUM PLACE towers as they were under construction a few years ago. Among the first high-profile, mixed-use project to kick-start the current trend, the complex includes a Ritz-Carlton hotel, condos, and the Boston Common movie theaters.

Gazing into their crystal balls, what do construction industry and real estate professionals see as the hot trends for Eastern Massachusetts? Housing? Retail? Office buildings? Hotels? How about all of the above?

After a boom period, housing construction—at least traditional single-family homes—appears to be on the wane. And demand for office space may be soft in some places. But projects that combine some or all of these areas are flourishing. Known as mixed-use or multi-use developments, the concept isn’t necessarily new. However, the proliferation of high-rise projects that incorporate, say, a restaurant and retail stores on the lower levels with a hotel and condominiums on the upper floors is fueling plenty of work for PHCC of Greater Boston contractors, Local No. 12 members, and the entire construction industry.

Millennium Place, the two 40-story towers on Tremont Street in Boston that include a Ritz-Carlton hotel, condos, and the Boston Common cineplex, was among the first high-profile, mixed-use project to kick-start the current trend. Completed in 2001, E. M. Duggan and J. C. Cannistraro, both PHCC of Greater Boston contractors, worked on the project. Among other multi-use developments in the pipeline: 500 Atlantic Ave. in Boston’s Financial Center, a 424-room hotel with 130 luxury condos on the upper floors; Columbus Center, a $500 million complex to be built over the Mass Pike in the Back Bay that will include a hotel, condos, a parking garage, a health club, a supermarket, and other stores; NorthPoint, a massive multi-phase, multi-building, $2 billion-plus project that will include office and lab space, shops and restaurants, a hotel, and condos and will span East Cambridge, Somerville, and Charlestown on a former railroad yard near the Lechmere MBTA station.

Condos are key

There are a number of reasons for the surge in mixed-use projects. Developers and owners like them because their multiple uses can provide a hedge against a downturn in any one area. If the travel industry is suffering, for example, traffic at the retail stores can help offset lower hotel occupancy rates. But condominiums are the common—and essential—component in a multi-use development and have been the primary driving force behind the trend.

“The condo market, especially the red-hot condo market we’re seeing, mitigates risk for developers,” says Paul Harrington, president of E. M. Duggan in Canton. “By selling most of the units before a pipe is installed, the considerable inflow of pre-construction dollars helps finance the project.”

Considerable indeed. The 50 ultra-high-end condos coming to the exclusive Mandarin Oriental at the Prudential Center will start at $4 million and rise to as high as $13 million, according to Harrington. “The Mandarin Oriental will be the premier real estate in town,” he predicts. The condo sales will go a long way to help subsidize the project’s hotel, apartments, and retail units.

But the reliance on condos carries its own risks. Condominium purchase and sales agreements generally designate occupancy dates. If the units aren’t ready on time, the agreements, and the dollars, may be pulled. “That’s why construction schedules for mixed-use projects are critically important,” says Harrington.

That may also be among the reasons why many developers incorporate “design assist” for multi-use projects Duggan, Cannistraro, and J. C. Higgins Corp. are all participating in the design phase of Columbus Center for instance. By working with the architects and engineers and providing feedback as they produce drawings, the plumbing contractors (and other subcontractors) can help reality-check the plans and minimize the need for redesign during construction, thereby saving dollars and time for the overall project.

Smart growth and mixed-use 

High-rise developments in Boston aren’t the only multi-use projects keeping PHCC contractors and Local No. 12 plumbers busy. In outlying cities and towns, suburban sprawl has characterized growth over the last few decades. Residential developments, office parks, shopping malls, and fast-food franchises have overtaken farmland, forests, and other open space while leaving some downtown areas nearly desolate. Urban planners, environmentalists, and developers—an unlikely alliance—are advocating mixed-use projects near public transportation in neglected city and town centers.

According to Local No. 12 Business Agent Harry Brett, the state is jumping on the bandwagon as well by encouraging what it calls “smart growth.” “Governor Romney created the Office for Commonwealth Development,” he explains, “and it directs the Commonwealth Capital Fund. The state allocates money to cities and towns to pay for the infrastructure, things like sewers and sidewalks, for smart growth projects.”

As an example, Brett points to the redevelopment of Quincy’s Center District. The state is providing funds for a coordinated effort to rebuild the area that is within walking distance of the MBTA’s Red Line and Old Colony commuter rail stations. Among the mixed-use projects are Presidents Place and Munroe Place, which are bringing new office space, retail stores, affordable housing apartments, and condos to the city. PHCC of Greater Boston contractors P. J. Kennedy & Sons and Dowd Plumbing Corp. are working on the Quincy projects.

Similar “smart growth” projects are underway in Somerville, Medford, and Revere, says George Donahue, Local No. 12 Business Agent. A mixed-use hotel, condos, and retail development is in the pipeline on the site of the Assembly Square Mall. A hotel and high-end residential units are among the multi-use projects planed for four parcels of land near the Wonderland T station. And Station Landing, a mixed-use development that’s wrapping now near the T station in Wellington Circle, will include retail stores on the ground level, office space and rental units on the higher floors, and skyline condos. Donahue says the next phase will add a hotel and more residential and retail space to the mix.

Harrington, Donahue, and Brett all agree that the labor-intensive multi-use projects have been great for the industry, and the economy in general. They also provide an environmentally friendly and forward-thinking model for twenty-first century developers that harks back to the self-contained New England town commons of yore. “It’s like an instant community,” Harrington says. “People can live, work, and play in these high-rise neighborhoods. They bring vibrancy and vitality to an area.”

Next Page
Complete Spring Newsletter (pdf file)