MassDevelopment
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Devens Bets On Big Pharma Expansion

April 3, 2016 : Banker & Tradesman, by Steve Adams


Rezoning And Transit Upgrades Would Boost Prospects

MassDevelopment officials hope the rezoning of 50 acres will help attract additional big pharmaceutical manufacturers to its Devens complex.

As life science companies look for suburban parcels for manufacturing sites, MassDevelopment sees additional potential for drug manufacturing at its 4,400-acre Devens property.

The economic development agency is seeking to rezone approximately 50 acres for commercial uses, including pharmaceutical manufacturing. A similar proposal failed to gain approval last spring due to concerns in the town of Harvard about residential development. The housing option is now off the table, said Richard Henderson, MassDevelopment’s executive vice president of real estate.

“We’ve had good discussions with Harvard. We have a sense that we would be favorably received if we come in again,” Henderson said.

The rezoning is expected to be up for town meeting votes in Harvard, Ayer and Shirley as soon as next month. The property spans parts of the three towns, which have final say over land-use changes.

Nearly 3 million square feet of additional development capacity is available at the former Army base under the existing reuse plan. MassDevelopment officials are contemplating a wide range of uses and tenants for the next steps, from driverless car researchers to assisted-living facilities.

Land With Room To Grow

Pharmaceutical manufacturing has been one of the primary job drivers since MassDevelopment acquired the property in 1996. Manufacturers accounted for nearly $100 million in annual wages in 2012, according to a report by the UMass Donahue Institute of Economic and Public Policy Research.

The push to recruit more advanced pharmaceutical manufacturing is an obvious fit for Devens in the current market, Henderson said. Biotech firms often need large sites with expansion capabilities, but shovel-ready properties with robust utility infrastructure are rare in the suburbs.

State economic development officials hope that life science companies committed to research facilities in the Kendall Square lab market will choose to do their manufacturing locally as well. Bristol-Myers Squibb, which is opening a research facility in 2018 at 100 Binney St. in Cambridge, is expanding its manufacturing at Devens. The New York-based drugmaker is expected to increase its Devens job base from 400 to 750 employees once it completes a $250-million expansion of its biologics manufacturing facility later this year, Henderson said.

Other industry leaders have looked elsewhere in the suburbs: Pfizer, which is consolidating research at a unified campus at 610 Main St. in Kendall Square, is contemplating a $200 million expansion of its Burtt Road campus in Andover for a clinical manufacturing facility. Cambridge-based Alnylam Pharmaceuticals plans to build a $200-million manufacturing plant in Norton. And Siemens Healthcare plans a $300-million expansion of its Walpole campus after receiving a tax incentive agreement from the town this month.

At least two life science companies have requirements of approximately 300,000 square feet for manufacturing space in the suburbs, according to Robert Richards, a partner with Transwestern RBJ. Such projects have longer lead times than typical commercial developments, with an average of four years to permit and finance, said Richards, who represented Alnylam in its Norton transaction.

“The land availability along 128 is cost-prohibitive, so you do see most of these requirements out on the 495 belt including Devens as desirable locations,” he said.

A since-demolished military housing on Grant Road is being contemplated for commercial rezoning, with robust water and sewer capacity and redundant electrical service, which is a requirement of advanced manufacturing uses. Land costs typically range from $80,000 to $140,000 per acre, Henderson said.

Devens’ inventory of large undeveloped parcels and existing utilities sets it apart from most suburban parcels, said Robert Gibson Jr., a partner with CBRE/New England.

“People are always price sensitive, but there are only so many options in Massachusetts,” Gibson said. “We’re a land-starved market and the opportunities in the industrial market are limited, especially for the sites that have water, sewer and gas.”

Another 80-acre parcel is being readied for potential use by driverless car researchers. The former military housing site on Salerno Circle is dotted with foundation slabs that need to be removed first, but the property could be ready for use in approximately a year under a license agreement, according to MassDevelopment officials.

Lack of public transit connections is a potential deal-breaker for commercial development, but potential upgrades to the MBTA commuter rail’s Fitchburg line schedule will open up Devens to reverse commutes from Greater Boston.

The new schedule will add outbound trains stopping in Ayer and Shirley before 8 a.m., approximately two hours earlier than the existing schedule. Devens businesses including Bristol-Myers Squibb are in discussions with the Montachusett Regional Transit Authority on a shuttle bus service that would cross Devens between the Ayer and Shirley commuter rail stations. The final commuter rail schedule will be released in April, according to Mac Daniel, spokesman for commuter rail operator Keolis.

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