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$50 million private development on Riley Plaza ready for Fall construction

Land disposition agreement signed; hotel agreement signed and operator named
Posted on: July 18, 2016 - 1:38pm

The $50 million private development of a 178,000 square foot mixed use project in the heart of downtown Salem is advancing as three important milestones have recently been achieved.

First, the land disposition agreement between the City of Salem and Dodge Area LLC for the purchase of the City Parking lot on Riley Plaza that will be incorporated into the project was signed. Second, Dodge Area LLC has reached agreement with a hotel developer for the hospitality portion of the project. Third, significant progress has been made toward completion of the on the ongoing utility relocation work at the site.

The project comprises an entire city block between Dodge Street, Washington Street, and Dodge Street Court. The project covers approximately 1.5 acres, one acre of land owned by Dodge Area LLC and a half-acre 38 space City-owned parking lot in Riley Plaza.

Previously authorized by the City Council, the Mayor and Dodge Area LLC signed the Land Disposition Agreement to sell the City-owned parcel to Dodge Area LLC. The closing on this transaction is now prepared to take place in October. Dodge Area LLC will pay $275,000 for the city-owned parcel and will maintain at least 38 publicly available parking spaces in its new development. The $275,000 that the City will receive for the land will be reinvested in Salem’s downtown, paying for the infrastructure improvements on Essex Street from North Street to Washington Street and in Town House Square later this year.

Dodge Area confirmed that it has signed an agreement this week with an affiliate of Maine Course Hospitality Group to be the owner and operator for the hotel portion of the project. The hotel, which is expected to be a 110-room Hampton Inn, is estimated to generate almost $200,000 in new hotel occupancy tax revenues for the City. This is in addition to the estimated $300,000 in new annual property tax receipts that are projected to be generated from the development.

Visible progress is being made on the site. A MassWorks grant from the Commonwealth is funding a City-managed effort to relocate public utility infrastructure in the parking lot and realign the Dodge Street/Washington Street intersection. This work will make the intersection safer and more accessible. Dodge Area LLC has been conducting remediation work in preparation of demolishing the existing structures on the property. These structures are slated to be removed in a late July to early August timeframe.

Dodge Area LLC’s development consultant, RCG LLC, indicates that it expects to file final plans with the Salem Redevelopment Authority (SRA) and its Design Review Board in the coming weeks. Following the completion of the demolition and the utility relocation work and final SRA approval, construction of the new buildings is anticipated to begin this fall. Construction is expected to last approximately 18-24 months.

“We’ve now reached a number of significant milestones in the forward progress of this major project,” said Salem Mayor Kim Driscoll. “We are excited, not only to grow our commercial tax base and create hundreds of new local jobs, but for the historic opportunity this project presents to expand our downtown in new directions – both literally and figuratively. With a street-front retail and hospitality complex on Dodge Street, the footprint of our downtown is poised to grow and become even more vibrant.”

“The entire project team is excited to get this project out-of-the ground in the near future,” reported RCG LLC Managing Principal Matt Picarsic. “Everyone has been working on the project for years, and we believe these new buildings will bring new life to this neighborhood.”