Through discussions with the town, it is apparent that adding 300 units to the housing count with no affordable units will not bring the town under the 10% threshold. It is our intent to pursue 100% of the units as market units and make a contribution to the Affordable Housing Trust to help achieve their goals.
In 2016, the South Shore chamber of Commerce in conjunction with a national market research firm (www.marketstreetservices.com) recommended the promotion of economic development to attract a younger, more educated workforce in order for South Shore Communities to sustain businesses. One of the main roadblocks is the type of housing available to this younger, educated workforce. Many local college graduates are forced to leave their communities to seek employment elsewhere in their perspective fields.
The “type” of housing that the Hanover Crossing and Hanover Companies is developing meets the criteria.
The report also maintains that residential components have become a critical piece of retail centers. The failing malls such as Hanover Mall and Kingston Crossing (Independence Mall) need to reinvent themselves and mixed use and housing of this nature are a critical component for success and sustainability.
By 2030, if nothing changes, the South Shore will be short 40,000 units of this desired type of housing. The entire State is predicted to be 90,000 units short. The South Shore represents 44% of the shortage.
It has behind the scenes. Leasing is marketing Hanover Crossing for 2020-2021. This is when most of the leases inside the Mall are ending and gives PREP the ability to completely take over the enclosed Mall for demolition. PREP is forecasting construction to begin early 2020.
We cannot make any announcements on tenants until leases are executed. What we can share after attending the International Council of Shopping Centers (ICSC) convention in Las Vegas in May, is there appears to be very strong interest in the new redevelopment, particularly when mixed-use residential is included in the equation.
Negotiations on the retail side are underway as we continue to discuss expanding Trader Joes and relocating a brand-new Panera Bread with Drive -Thru. We also continue to work toward a deal for a new major grocery anchor.
Providing the residential component is approved, construction of the new wastewater plant should begin in Spring of 2019 and take approximately one year to build. But if the residential plans are not approved and PREP has to go back and redesign the wastewater plant, the entire project could be substantially delayed.
The TIF will exclude the proposed residential parcel. The cost of the residential development is estimated at $83 million, translating to a range of $800,000 – $900,000 in annual taxes as well as permit fees, and excise tax. The residents of the development will have an environment of “live, work, play” and the Town will also reap the benefits of any local restaurant taxes, permit fees, and excise tax.
The taxes from the residential will help offset the TIF payments for the retail development.
We have a financial model that included all expected revenues and expenses (our proforma). This includes the tax savings from the TIF. The land sale revenue goes right back into the model under cash flow and will help tremendously with PREP’s retail plans for Tenants and amenities.
The expense to build this project’s retail component is over $100 million. This is above the purchase cost of $39.5 million. Any offset in these costs yield a more positive outlook on reaching both the goals to create a vibrant retail center including the tenant mix and the ability to add amenities our consumers desire.
The conceptual photo you see shows the new outdoor retail center as well as the residential at the northeast corner of the site. Motorists on Route 53 will not be able to see the new buildings after they are built, because existing commercial buildings will obscure them along with topography of the site. The closest Hanover resident abutters are across Route 53 in the Woodland Drive neighborhoods. The closest Norwell abutters reside through the thickly wooded area between the mall property and Mill Street. Route 3 is the next abutter.
The Hanover Company is renowned for building luxury residential rental units and builds them in the manner that suits the communities in which they reside. The Hanover Company has developed successful projects in Cambridge, Foxborough, and Plymouth to name a few.
The mutual development of the retail and the residential will create sidewalks and amenities to tie the two projects together. This will create a synergy between the two allowing easy access from the residential to the retail.
The residential unit mix is 60% (1BR), 35% (2BR) and 5% (3 BR). This type of residential development is attractive to both young millennials and empty nesters looking to downsize. The Hanover Company has conducted a study based on similar past developments and estimates “no more than 10% of the residences will yield children, totaling 30 school-aged kids at the most.”
There will be a nominal effect on the schools given the small number of potential school aged children, but the taxes received from the project far outweigh any burden the number of children will have on the school system.
Think of this comparison: Any single-family house built new or purchased is likely to yield two children per household into the school system. If this house is worth $500,000. This would yield approximately $8,300 to the Town in annual property taxes. For the 2015-2016 school year (the most recent data the State Department of Education has), Hanover’s per pupil expenditure is $13,526 per student. In other words, the Town will lose money based on the taxes paid versus cost of school. The residential component will likely yield about 30 children into the school system. Thirty students multiplied $13,526 per student is $405,780 in annual school costs. Taxes paid by the residential portion of Hanover Crossing will be around $850,000 per year. The residential fully pays for these students in property taxes – also the restaurant tax will be a continuous benefit to the Town as these residents dine in local establishments.
The new retail and residential will not affect water quality. The brown water some residents experience on a regular basis exists in the existing underground distribution pipes. Our Town and the water that is drawn from the wells and treated are rich with minerals including iron and magnesium. These two minerals tend to settle at the bottom of the pipes. These minerals are very common in New England. When the Hanover DPW flushes hydrants in the attempts to rid the system of these minerals and to assure each hydrant has the proper pressure, the areas where the flushing occurs will experience the crown water. Any new development, whether here at the Mall or any new house or sub-division elsewhere in Town will not have any negative effect on the system.
The Hanover Crossing and Residential projects will not utilize expensive treated water for irrigation systems. This water will be attained using private wells for that purpose. Private wells will yield water for irrigation but not expensive treated water that comes from the Town’s plants.
To the extent of building the new retail center and residential component, much of the underground water and sewer pipes installed in the 1960’s will be completely replaced as the site work includes new areas for these pipes to fit the new layout of the buildings.
The project will incorporate a modern stormwater management system that will enhance groundwater recharge and stormwater quality that will benefit the Third Herring Brook.
Hanover Companies is one of the largest high -end apartment developers in the country. They understand the needs of their residents. This is essential to proving an attractive product for the customers. The parking space count for the residential is a 1.5 space per unit ratio (297 * 1.5 = 445 vehicles). The location of the residential component is at the very rear of the Mall property and has direct access via Hanover Mall Drive to the Route 3 Interchange.
While we are sure these residents will occasionally make trips south onto Route 53, these impacts are minimal as they would be very spread out timewise. Also, the trips that are made to go south onto Route 53 undoubtedly are likely to increase business at other local Hanover businesses.
PREP has met with the Hanover Fire Chief and Hanover Police Chief.
The Hanover Fire Department is built to handle any residential growth including the residential component here at the Mall. The department through federal grants under the safer program added four new full-time firefighters this year. HFD also added a new ladder truck also under a federal grant, which is built to handle fighting fires up to eight-stories (100 feet) high. The residential development buildings are +/- 50’ feet high. The additions, according to the Chief, will allow the department to handle the anticipated increases associated with the proposed development at Hanover Crossing.
There are two other similar apartment complexes in Hanover – North Pointe and Webster Village. Webster village is new and we do not have much data to project with, but North Pointe is 70 apartments and creates between 40 – 60 calls per year. At first, there will be an estimated 100 calls going up to approximately 150 calls per year five years out.
The Hanover Police Chief said there will be an increase in vehicular traffic near Hanover Crossing and surrounding public ways like Mill Street, Washington Street, and the intersections of several abutting streets. PREP is working with the Hanover PD on traffic engineering studies.
As it relates to an increase in the need for police services and or proactive patrol, North Pointe Housing on Washington Street generated approximately 40 police responses to date in the last 12 months. Estimates are less than one call per year for each unit.