Colvest Group adds Colombus Avenue project to it's growing portfolio

By George O'Brien

02/22/2008- Business West

The Windsor, Conn.-based Colvest Group plans to begin construction later this year on an office/retail complex on East Columbus Avenue in Springfield, the latest in a series of landscape-changing developments for the company, with more on the drawing board. The Springfield initiative, with roughly half its planned square footage not yet under contract, is a bit of a gamble, said Colvest's lead principal, Frank Colaccino, but one he considers well worth taking, and a venture that could spur additional development in the South End.

Frank Colaccino calls it a "leap of faith."

That's how he chose to categorize a project in Springfield's South End put on the drawing board by the Windsor, Conn.-based development firm the Colvest Group, which he serves as lead and founding principal. The venture involves the 1.2-acre parcel at the corner of Howard Street and East Columbus Avenue, currently occupied by what is left of the former St. Joseph Church, school, and convent, all of which are currently being demolished.

Colvest plans to build a three-story office building on the site, as well as a single-story retail facility. The proposal is similar, in some respects, to other office and retail projects that Colvest has built in Springfield, Westfield, and other area communities, except that this one comes with a higher degree of speculation.

Indeed, while a bank - the name of which has yet to be released - will place its regional headquarters and a branch on that site and take the first and third floors of the 18,000-square-foot office building, there are no tenants signed on as of yet for the second floor or the retail space. And that's why this endeavor can be labeled a 'leap.'

But it's a calculated risk, said Colaccino, former president of Dairy Mart, and one grounded in optimism regarding Springfield's prospects for recovery from its fiscal and public relations woes, and especially the future of the East Columbus Avenue area.

While much of the attention recently has been focused on the other side of I-91, West Columbus Avenue - where the Basketball Hall of Fame complex, a hotel, and Uno's restaurant have been gone up; a new health-and-wellness-themed development is under construction at the old hoop hall; and the York Street Jail is being razed amid hopes for new development - smaller, less-publicized signs of progress are occurring on the east side of the highway.

Colvest has located a Starbucks there, Pride Stations and Stores has placed one of its signature facilities on the street, and a developer is eyeing possibilities for the closed Wendy's restaurant a few blocks to the south. Colvest's plans for the St. Joseph complex represent the most ambitious development to date, and it could be a harbinger of future growth there, said David Panagore, Springfield's director of Economic Development.

"With the traffic on I-91 and the ramps allowing people to get on and off the highway, there is potential for development on both sides of Columbus Avenue," he said. "And on the east side, there are still some sites that can be developed."

"As East Columbus Avenue gets built up and developed, it should have a spillover effect to Main Street," Colaccino said. "Time will tell, but that's how I think things will progress. The key is getting people off the highway; the more people you can get off those ramps, the better it is for retailers."

In this issue, BusinessWest looks at the East Columbus Avenue project, and how the Colvest Group continues to add to its portfolio in Western Mass.

Chain of Events

Turning the clock back more than two years, Colaccino recalled it wasn't exactly easy to convince the brass at Starbucks to buy into East Columbus Avenue.

"It was a trick to get them to go there," he told BusinessWest, referring to officials reviewing potential sites for the Seattle-based chain. "Some of the people within the company wanted to go there, and some of them didn't; a lot of people were afraid of the neighborhood, and eventually it came to where they weren't marketing to the neighborhood, but they were basically marketing to the highway.

"They looked at the 60,000 or so cars that went by on East Columbus each day and thought they could make a go of it," he continued, noting that Starbucks' interest came as work was finally wrapping up on a project to reverse the ramps on I-91 to ease traffic in and out of the Hall of Fame and other attractions. "East Columbus is the main route for people going to work in Springfield, especially from the south, and that's what eventually convinced us to go in that location."

At present, the chain seems happy with its numbers, he said, adding that this apparent success story and this concept of 'marketing to the highway' - I-91 has separated the city from the river but brought tens of thousands of motorists through Springfield every day - was one of the factors that made him willing to listen when he was first approached about the St. Joseph property just over a year ago.

The church's school and convent had shut down in 2000, and the church itself, known for its impressive organ, closed its doors four years later, a victim of declining attendance.

The church site is outwardly attractive, said Colaccino, noting that it is positioned roughly halfway between an off-ramp and an on-ramp for northbound traffic, and is easily accessible for motorists headed in either direction. It's visible from the highway, he added, and it's only a few blocks from the Hampden County House of Correction, making it suitable for attorneys' offices.

Still, there is a good amount of vacant office space in downtown Springfield - much of it Class B and C, but some A space is available, especially in One Financial Plaza - which raises some doubts about a new spec office building.

"This is definitely one of the riskier projects we've undertaken, given the fact that Springfield has such an abundance of office space," he explained, noting that Colvest has just under half of the total square footage, office and retail, under lease at present, while usually it has tenants lined up for anything it develops. "But we looked at the site, and we felt very comfortable with its location, its proximity to I-91, and the fact that we had on-site parking. All that gave us the needed comfort level."

Colaccino believes his project, due to be completed by the end of this year or in the first quarter of 2009, along with what's happening on the west side of Columbus Avenue and what could happen next there, should create momentum for additional development on both sides of the road. "That area will become much more visible, it will draw more traffic, and that will encourage more development," he said.

Mark Benoit agrees. He's the owner of Atlantic Capital Investors Inc., and a developer who has, among other things, converted several former manufacturing buildings in Springfield's North End into office facilities for health care-related ventures (see related story, page 27). He and Ben Surner, owner of National Management & Development Group, have acquired the former Wendy's site on East Columbus Avenue and will pursue opportunities to convert it into another fast-food restaurant, a bank branch (they're going up on seemingly every street corner these days), or other retail use.

He believes there will be many such opportunities because of what's happening in and around the Hall of Fame, and how it's bringing attention to a long-overlooked part of Springfield.

"We think this is a great investment for us," he said of the Wendy's acquisition. "There's a lot happening in the South End, and more to come. When the Colvest project is completed, it will be a great improvement to that area, and it will spur more development.

"What's happening on the west side of the street with the Hall of Fame, the LA Fitness, and the York Street jail will eventually spill over to the other side," he continued, "which has lagged somewhat, but is ready to catch up - it's prime for redevelopment."

The East Columbus Avenue project is the latest in a series of mostly retail developments that Colvest has strung together in recent years, and more are on the drawing board.

The company has placed Starbucks locations on Memorial Drive in Chicopee and East Main Street in Westfield, in addition to the Springfield store, and has plans to site another, along with a Burger King and a bank branch, on a parcel in Springfield's Sixteen Acres neighborhood. Colvest recently developed a series of small parcels on State Street in Springfield into a home for a CVS, and has also placed that chain in a location on Elm Street in Westfield, and has submitted a proposal to expand a CVS location on Springfield Street in Agawam.

Meanwhile, the company has filed site plans for an ambitious project on Memorial Drive involving an 11-acre parcel just off Turnpike exit 5. Those plans call for a 125-room Residence Inn by Marriott, to be owned and managed by area hotelier Dinesh Patel, as well as two restaurants, a bank, office space, and 40,000 square feet of retail space.

"We're excited about that project," said Collacino, who told BusinessWest that the Chicopee initiative could be a $22 million to $25 million initiative when all the components are pieced together. "That's a great location, and that whole street is booming."

What's in Store

Collacino told BusinessWest that Colvest has no formal strategy for future growth opportunities. Its approach has been, and will continue to be, to focus on real estate opportunities that make sense for the company - and for the region.

And that's why this continues to be a developing story - literally and figuratively.