SalemNews.com, Salem, MA

January 29, 2013

Mayor: Time for senior center

Salem: Driscoll seeks board's OK for new financing plan

BY TOM DALTON
STAFF WRITER

---- — Salem Mayor Kim Driscoll is trying to jump-start efforts to build a new senior center, a quest that has dragged on long enough to give the city’s last three mayors gray hairs.

In a Jan. 24 letter to councilors, Driscoll proposed a new financing plan for the city’s portion of the Gateway Center, a $30 million, public-private development at the corner of Boston and Bridge streets.

The developer, High Rock LLC, has landed a medical office tenant and secured a key state permit, according to the mayor.

“They’re ready to proceed,” she said yesterday in a telephone interview. “The time (to move) is now.”

More than three years ago, the city signed a $5 million purchase-and-sale agreement to buy a large portion of the first floor of this proposed three-story building for a senior/community life center to be used by seniors and other city residents.

At the time, the developer hoped to land a fitness center as another anchor tenant, but that plan fell through. The medical office tenant will help fill that gap, the mayor said.

“We have a nucleus now,” she said.

The project has been delayed by a number of factors, including the real estate collapse and slow recovery, difficulty landing tenants and securing financing, and permit approvals.

The council is expected to take up the matter at its next meeting, Feb. 14. Reached yesterday, Council President Jerry Ryan said he did not want to comment until he had studied the proposal.

The Salem News was not able to reach the developer, David Sweetser.

Instead of using a federal loan, which was part of the original financing plan, Driscoll wants to pay the city’s $5 million share through traditional bond financing.

Driscoll said the estimated $400,000 in yearly property tax revenue from this development will cover the annual bond payments, which are likely to stretch over several decades.

The mayor said the city is forgoing a federal Housing and Urban Development loan program because it would have triggered higher labor and related costs that, according to the developer, would have added $3 million to the estimated construction costs.

“The project simply cannot absorb an increase of that magnitude, nor can the city afford to pay the cost differential,” the mayor wrote in the three-page letter to councilors.

In her letter, Driscoll added that, “the developer is committed to using qualified contractors from this area and anticipates that many of the trades on-site will be union signatories that pay prevailing wage rates. However, they simply cannot afford, nor did they anticipate, using the higher ... rates for the entirety of the project.”

In her letter, Driscoll cautioned councilors about reopening the debate on where to build the senior center.

After a plan to put a center inside the St. Joseph Church redevelopment was rejected by the City Council, a Senior Center Task Force investigated a number of spots before recommending three sites: Memorial Drive, Fort Lee, and the Boston and Bridge location.

The Gateway site was chosen after estimates indicated that it would cost at least $2 million less than the others.

“I trust that you recognize the importance of building a new senior center and hope that this request for bond financing will not bring us back to a discussion of ‘where’ the senior center should be located,” Driscoll wrote in her letter.

“As has been noted in the past, there is no ‘perfect’ site that will please everyone, and we desperately need a new facility that is affordable and capable of serving our needs now and in the future. The proposal for a new, state-of-the-art facility at Gateway Center more than meets that description.”

Tom Dalton can be reached at tdalton@salemnews.com.