Sandwich tries to revive 56-acre project

Originally published May 25, 2014 in Banker & Tradesman.

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With 56-acres of town-owned real estate up for sale, Sandwich officials are hoping a more relaxed regulatory process will spur development on the one of the largest vacant commercial parcels on Cape Cod.

A new request for proposals (RFP) was issued April 23 after Tsakalos Realty Trust, a Sandwich developer that owns three neighboring retail plazas, backed out of a development agreement in February to purchase the plot at Quaker Meetinghouse and Cotuit roads for $4.8 million.

The dissolution of plans for South Sandwich Village Center came after disagreements between the developer and town officials over the permitting process, representatives from both sides said.

In a letter dated Feb. 4, Thomas Tsakalos, founder of Tsakalos Realty, notified Sandwich selectmen he was no longer confident that he or potential development partners would have the flexibility to develop the project successfully.

“The basic dilemma, as I see it, is that the Board of Selectmen wish to know who my potential development partners will be and what tenants they may bring – while the potential development partners I have spoken with have indicated that they will only seriously consider developing in Sandwich after I have secured the necessary permits and approvals,” Tsakalos wrote.

It was a Catch-22, said Peter Dubay, Tsakalos Realty’s former project manager. Dubay had been working on the proposed development for three years before the deal collapsed.

Tsakalos had proposed a $300-million build-out of the lot, including some redevelopment, totaling roughly 1.7 million square feet of office, retail and residential space. The plans included an assisted living facility and hotel, Dubay said, along with walking and bike trails that would have winded throughout a village layout.

Sandwich Assistant Town Manager Doug Lapp said the deal was unique because it utilized a three-way development agreement between the town, Tsakalos Realty, and the Cape Cod Commission. The commission is a regional regulatory agency that was established in 1990 to regulate growth on the Cape, and developers must secure permits through the agency in addition to the permits they need from a local town.

Lapp said the development agreement was intended to smooth out the permitting process, but in the end, the details from Tsakalos were “a bit vague,” even if the vision of a mixed-use development was in line with the town’s 2009 comprehensive plan.

“That’s the kind of vision we like, but (Tsakalos) wasn’t able to demonstrate he had the financing in place to complete the project,” Lapp said. “We wanted him to give us examples of the kinds of tenants and the type of use the anchor tenants would be.”

Lapp said town officials are hoping changes to the revised RFP will make it easier for developers to sign on to the deal. Instead of asking potential buyers to purchase the entire acreage, the new RFP allows submissions for only a portion of the land. It also eliminates a requirement for the chosen developer to set aside 3 acres for a town library. The town has already agreed to fund a detailed wastewater report for the plot, Lapp said, and has agreed to provide land at no cost to the developer for wastewater disposal.

“We’re hoping that these changes will make it more attractive for developers,” Lapp said, adding the town is trying to ease its dependency on a residential tax base. “This is the most appropriate area for this kind of development and there is a very strong consensus with residents and selectmen to do something to help the local economy and the tax base.”

The Sandwich parcel is one of only 13 commercially-zoned, vacant plots on the Cape, and one of the largest, said Kristy Senatori, Deputy Director of the Cape Cod Commission.

“There aren’t necessarily other places on the Cape that could be developed like this,” Senatori said. “From our perspective, when communities stop growing, they start dying.”

 

Opening The Cape To Development

Trying to shed its image as primarily a regulatory body, Senatori said the commission has taken steps to project a more forward-thinking approach. On May 12, the commission released a new online planning tool, called FRED, or Flexible Regional Economic Development, that uses a GIS mapping platform to rate the development suitability of land across the Cape.

Using FRED, developers can assess challenges and opportunities at any location by evaluating the lots on 17 different criteria, Senatori said.

The introduction of FRED came less than a week after the commission approved the first-ever increase in thresholds for developments required to seek a permit from the agency. In the past, the commission’s approval was needed for any developments over 10,000 square feet. Beginning May 8 however, the threshold for four areas on the Cape was increased to 40,000 square feet for proposed light manufacturing or research and development uses, Senatori said.

Kevin Pepe, managing director of Commercial Realty Advisors in Hyannis, said more has to be done to encourage smart growth.

“I applaud [the commission] for their efforts there, but they need to do a greater effort in addressing the needs of the smaller business on the Cape,” Pepe said, adding many of the businesses on the Cape tend to be service-based.

The commission also helped roll out a new broadband network, which is intended to attract more high-tech businesses to the area, Senatori said.

Despite some of the regulatory hurdles, it’s still a great environment to do business on the Cape, said Gary Sheehan, Chairman of the Board of Directors for the Cape Cod Chamber of Commerce. The area has at least one other asset that continues to attract development, he said.

“It’s the water. Our greatest regional economic asset is our environment,” Sheehan said. “Cape Cod is an international brand, and we’re going to continue working across the community to support that brand because it’s an economic engine for the entire community.”

The latest round of proposals for South Sandwich Village are due June 16.

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