Shift In Strategy For Advanced Manufacturing Campus
Macroeconomic Uncertainty and Interest Rates Are Seen As Factors
New Bedford, Massachusetts – In a shift in strategy, the City of New Bedford has begun outreach to the developer community to explore possible changes to the sale criteria required of prospective purchasers of the 100-acres of the municipally-owned Whaling City Golf Course on Hathaway Road.
In April of this year, the City issued a Request For Proposals (RFP) to solicit proposals from commercial real estate developers to create an Advanced Manufacturing Campus (AMC) on the property. Initial feedback was positive, with the City receiving more than sixty requests for the RFP, but ultimately no proposals were received by the closing of the submission period on September 30, 2022. As a result, the City has decided to solicit additional feedback from the development community and retain a commercial real estate advisor using state grant funds to evaluate possible changes to the terms of a second RFP to be issued in early 2023.
Mayor Jon Mitchell addressed the decision to consider changes to the April RFP, saying “The scale and location of the proposed site confer on it inherent competitive advantages and make it strongly suited to development. Located on greenfield land at the intersection of two major highways, with a regional airport less than a mile away, and direct access to a freight rail line, the property is a rarity in New England. This is why the site has been the focus of various redevelopment concepts over several decades.
But what we have also understood is that the site’s underlying potential only takes us so far. Unfortunately, interest rate hikes have raised the cost of capital over the past six months, and the level of business confidence nationally and globally has fallen. This undoubtedly has had an impact on the level of interest among commercial real estate developers and investors.
Unlike these macroeconomic conditions however, the City has greater control over the terms in the RFP, including the uses allowed, tax incentives offered, and, in this case, the process for relocating golf activity and amenities to areas outside the perimeter of the new business park.
The City’s priorities will remain the same in all essential aspects as we proceed. The City wants proposals that will 1) create well-paying jobs, 2) ease the burden on taxpayers by expanding the commercial tax base, and 3) retain the golf course as a recreational asset. That said, if there are ways to make modest adjustments to a future RFP that help reduce business risk and better ensure a reasonable return on investment for prospective developers, then we need to stay open to these types of accommodations. We want all the stakeholders—residents, the golf community, and potential bidders to understand, while wholesale changes to our strategy are off the table, we are open to the prospect of a fine-tuning that may better balance the interests of seller and buyer.”
Mitchell also used today’s announcement to reiterate his overall support, adding “Increasingly, manufacturers are looking to expand in places that offer easy transportation access for their products, suppliers, and employees, as well as housing affordability and a high quality of life. All these dynamics are as real today as when we first undertook this effort, and despite the unexpected wrinkle, I fully expect New Bedford’s advantages, at this site and elsewhere, will only strengthen over the long-term.”
City Council President Ian Abreu offered his assessment, noting “The Administration remains fully transparent with the Council about how they are adjusting their approach to the redevelopment, and I fully support their continued effort to navigate this project through the choppy economic waters that have developed over the past year. There is a general recognition among leaders that the Advanced Manufacturing Campus presents a unique, generational opportunity, and we just have to keep at it and tackle whatever challenges arise until we achieve our goals. We cannot afford to pass up this chance to create jobs for residents while also growing revenues—which helps bolster city government finances and ultimately eases the burden on local taxpayers by broadening our tax base.”
City Council Property Committee Chair Maria Giesta added, “We remain pleased with how the Administration and its economic development team have approached the AMC project. They have been candid about both our options and our challenges for addressing them, and I expect the entire Property Committee to continue to advocate for a way forward that delivers significant benefits local residents, businesses, and users of the golf course.”
Derek Santos, Executive Director of the New Bedford Economic Development Council, who marketed the site to the development community, echoed comments of the Mayor and Councillors: “From day one, the AMC has been about creating an opportunity for a mutually beneficial partnership between the public and private sectors. The RFP process is simply a tool to facilitate that partnership; so if the public sector chooses to further refine its approach, it is reasonable to expect private sector interests will, in turn, revisit their assessment of the business opportunity.”
Background on the Advanced Manufacturing Campus
With the City’s existing New Bedford Business Park at nearly full capacity, city officials, members of the local legislative delegation, and state economic development experts have been collaborating since 2017 to advance the AMC project to this stage. Past efforts have included a detailed market analysis, an extensive assessment of site conditions, the establishment of a site-specific zoning measure, and special legislation recently signed into law, which removes state recreational restrictions that had barred redevelopment at the location.
A feasibility analysis concluded that the AMC site can accommodate more than 1 million square feet of new development and host as many as 1,000 workers, while allowing for the continued operation of the adjacent golf course. Additional market research found that site has the acreage, transportation access, and visibility in demand among leading industries of Massachusetts and beyond.
Watch a brief video describing the Advanced Manufacturing Campus here:
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