Worcester City Manager and Berkeley Investments President Outline CitySquare Project Agreement

Plan To Go To City Council for Approval

Contact: Jim Ball, CCA (617)332-9321
Ellen Ganley (508)799-1175

Worcester, MA-May 2, 2005—Worcester City Manager Michael V. O’Brien and Berkeley Investment’s Inc. President Young Park today announced that agreement has been reached on the principal business terms of the public/private partnership allowing the 21-acre revitalization of the heart of downtown Worcester—CitySquare—to move forward. At a press conference held at the site of the former Worcester Common Outlet Mall, which will be replaced as part of this project, City Manager O’Brien and Mr. Park detailed the elements of this public-private partnership which will transform the core of the City.

“The CitySquare project will be a major catalyst in helping to transform downtown Worcester,” City Manager O’Brien said. “The vision of a new, vibrant, mixed-use district, linking our urban core and City Hall to Union Station and Washington Square, with housing, retail and office space and cultural activities is key to enabling Worcester to reach its potential and build a strong economic future.”

Berkeley Investments, Inc. of Boston, in a joint venture with Starwood Capital Group, will develop CitySquare. The project proposes integrating medical/clinical, office, residential, street-accessed retail and entertainment uses within a newly created open-air street grid, created around a central green space. This new urban district will also connect the downtown to Union Station and a new inter-city bus terminal, upgraded parking facilities, and offer a wide range of new housing choices. The project includes over 2 million square feet of space developed over three phases.

The project requires approval from the City of Worcester and the State. In addition to significant private financing, the project will use a form of financing, District Improvement Financing (DIF), which is quite common across the nation but only recently legislated in Massachusetts. A DIF allows a city to finance infrastructure improvements and other expenses related to a revitalization project with bonds paid off by increased tax revenues generated solely from the development project itself.

“The DIF, called a TIF (tax increment financing) in other states, is a tremendous tool with a proven track record across the nation,” said City Manager O’Brien. “The City will make the all-important infrastructure improvements which allow us to undertake this revitalization, and pay off the bonds from increased taxes generated by the retail, business and housing that will be developed. The bonds are paid off from real estate taxes from the designated CitySquare district.”

Berkeley President Young Park added, “In the past, most developments like this would be accomplished by negotiating tax breaks for the proposed development, requiring the city to raise everyone’s taxes or institute a new tax. Here, the revenues generated by the DIF district pay for the bond. The existing tax base is not touched. We want to see Worcester prosper and grow, and this project also creates new jobs. We have a real stake in the success of CitySquare.”

About Berkeley Investments

Berkeley Investments, Inc. is a Boston-based real estate investment, development and asset management company with assets totaling 4 million square feet of office, R&D and industrial properties. Since its inception in 1991, Berkeley has established a successful track record of creating and enhancing asset value for its stakeholders.

Among its properties are a recently completed 85,000 sq. ft. office in Chelmsford, MA; One Cabot Road in Medford, MA, a 330,000 sq. ft. Class A office building; 115 Flanders Rd. in Westborough, MA, a 64,654 sq. ft. office/R&D building; and 121 High Street, in the center of Boston’s Financial District.

It recently acquired a $100 million portfolio of 12 office buildings and four parking lots in Boston’s Fort Point Channel district, currently under development and leasing.