On Tuesday night the Lowell City Council voted to amend the Land Disposition Agreement the city executed in 2020 with Lupoli Companies LLC for several parcels in the Hamilton Canal District. The vote was 8 to 2 with YES votes from Councilors Corey Belanger, Sokhary Chau, Wayne Jenness, Rita Mercier, Vesna Nuon, Kim Scott, Paul Ratha Yem, and Mayor Dan Rourke. Voting NO were Councilors Erik Gitschier and Corey Robinson. Council John Descoteaux was absent from the meeting. The amendment will allow 270 new market rate apartments to be constructed in the Hamilton Canal District. I’ll share more details of the agreement later in this article, but first, let’s review how we got to this point.

From Lowell’s founding in 1826 until the end of World War I, the parcels involved in this agreement were home to the Lowell Machine Shop which – no exaggeration – was the Silicon Valley of nineteenth century America. Lowell’s mills were novel but so was all the textile machinery within them. It did not exist elsewhere in the US, so it had to be invented and then manufactured at scale. The Lowell Machine Shop was the first place in America to do it.

Unfortunately, Lowell’s industrial preeminence was short-lived. In Lowell, the Great Depression came early and stayed late. That was particularly true for the Lowell Machine Shop which faded away in the early twentieth century leaving the land it once sat upon run down and underdeveloped.

This condition persisted through the early decades of Lowell’s revival. The massive funding for downtown building renovations that accompanied the National Historical Park’s arrival did not benefit the former Machine Shop site (notwithstanding the NPS trolley stop and canal boat dock being located there). The concurrent construction of the Wang Training Center (now Middlesex Community College’s Cowan Building) and the Hilton Hotel (more recently, the UMass Lowell Inn & Conference Center) also skipped the area. In the 1990s, the rehabilitation of the Bon Marche building and the construction of the Tsongas Arena and Lelacheur Park did nothing to help the Machine Shop neighborhood.

Recognizing this systemic neglect, city planners in 2000 developed the Jackson Appleton Middlesex (JAM) Urban Revitalization and Development Project. The JAM Plan asserted that this neighborhood had tremendous potential given its strategic location between the main routes into the city (the Lowell Connector and the Gallagher Transportation Terminal) and the city’s downtown. Because market forces had failed to benefit this area, the city proposed more active measures including the taking of privately owned parcels by eminent domain, the demolition of 19 buildings that were beyond rehabilitation, and the installation of new infrastructure to support private development.

The Hamilton Canal District emerged as a component of the JAM Plan. Its 15 acres of canal-front land, made vacant by the demolition of the few run-down buildings that had remained on the parcel, was seen as a blank canvas upon which the right developer could create a vibrant mixed-use neighborhood that connected downtown to the commuter rail station.

As time passed, realizing this vision proved elusive. A master developer was selected but the city lost patience and ended that deal. Another master developer was selected with the same result. At one point, the city council voted to prohibit any residential units from being constructed in the Hamilton Canal District (a vote which was wisely ignored). At another point, the council renamed the Hamilton Canal District the Hamilton Canal Innovation District in the apparent belief that adding the word “Innovation” to the project’s name would draw cutting edge businesses. Predictably, that did not work.

Aside from a residential apartment building constructed along the Pawtucket Canal, the only activity was funded by governmental entities. UMass Lowell continued to operate 110 Canal Street as its “innovation hub”; the Commonwealth built the seven-story Kiernan Justice Center; the city constructed a 900-space parking garage; and millions in state and federal funds were spent on roads, utilities, and other infrastructure improvements seen as a precondition to further development.

Finally in 2020, the city of Lowell entered a Land Disposition Agreement with Lupoli Companies LLC that affected five lots within the Hamilton Canal Innovation District. On the ground, these lots can be grouped into three distinct parcels:

• The first parcel consists of Lot 1 which sits between the Kiernan Justice Center and Mill No. 5. This is now the site of the 541-space Lupoli-owned parking garage.
• The second parcel consists of Lots 2, 3A, and 4. This is the large surface parking lot wedged between the Hamilton Canal and the Pawtucket Canal and is across Jackson Street from the Justice Center.
• The third parcel consists of Lot 5 which sits across Jackson Street from Mill No. 5 and across Canal Street from the UMass Lowell Innovation Hub.

Per the agreement, the city agreed to sell the Lupoli Companies LLC these three parcels for $2 million. In return, Lupoli Companies LLC agreed to improve the parcels as follows:

• On Parcels 2, 3A and 4, construct a 12 to 14-story building with covered parking.
• On Parcel 5, construct a 50,000 square foot building.
• On Parcel 1, construct a 500-space parking garage.

The “project schedule” agreed to by Lupoli Companies LLC was as follows:

• On Parcel 1 (parking garage), commence construction by June 30, 2021.
• On either Parcel 5 (50,000 sf building) or on Parcels 2, 3A & 4 (12-14 story building) commence construction (of one of them) by June 30, 2023.
• “Construction of the core and shell of the buildings on all of the Development Parcels shall be substantially completed by December 31, 2027.”

Although the parking garage opened for business on March 4, 2024, there was no visible activity on either of the other parcels which violated the contractual provision that construction of at least one building would begin by June 30, 2023.

The Land Disposition Agreement contemplated this possibility, stating that if the developer failed to meet this schedule, the city could declare the developer in default. The developer then had 180 days to cure the default. If the developer failed to do that, the city could “declare a termination of title to such development parcel in favor of the city whereupon title shall revert to the city.”

Finally, on April 24, 2024, the city council’s economic development subcommittee heard from Mr. Lupoli who, citing higher than expected costs of construction, proposed a scaled down project, replacing the promised 12-14 story high rise with a 5-story wood frame apartment building, and the promised 50,000 square foot building on the other lot with a second apartment building. That second building would have no retail. The building on the larger lot would have a restaurant on the ground floor.

At that point, the city should have exercised its rights under the Land Disposition Agreement, declared the developer in default, and commenced the process of regaining ownership of the two undeveloped parcels. I understand that would have resulted in litigation and tied things up in court for years, but so what? Councilors are incorrect when they say the land has been vacant for 20 years. It’s been vacant – or at least not used productively – for nearly a century so where is the harm in continuing to wait?

I’m not holding out hope that a knight-in-shining-armor developer will somehow emerge and construct a high-rise office tower filled with thriving businesses. That’s not going to happen here or anywhere else. But as we have learned from the rising cost of the renovations to Lowell High School, and the currently insurmountable cost of renovating other older buildings such as the Smith Baker Center and the Superior Courthouse, there is great value in vacant land that can be rapidly developed when the right circumstances arise.

It’s not like the city is going to reap new property taxes from the two apartment buildings proposed. Besides ratifying the change to the development agreement, the council also voted to grant Tax Increment Exemptions (TIE) and Tax Increment Financing (TIF) agreements that essentially exempt both structures from paying property taxes for the next fifteen years.

We live in a turbulent and unpredictable time. That’s true for our national politics, but it’s a condition that transcends that. The global economy seems shaky and heading in the wrong direction. Massive cuts to federal spending will trickle down to the state and city to cause considerable fiscal distress. It does not seem like a great time to be embarking on big construction projects.

Beyond the coming fiscal chaos, bigger changes are afoot. Between the emergence of artificial intelligence and the embrace of working from home, the nature of work is changing in ways that mirror the transition from a farm to an industrial economy 200 years ago. That may sound like science fiction, but that is the nature of technological change. It seems far-fetched until suddenly it isn’t. My point is that we don’t know what kind of physical structures will be needed to accommodate this new reality of work. Until we do, having a 15-acre vacant parcel sitting between downtown Lowell and the city’s major transportation links is like having money in the bank. Why not save it until the best deal comes along rather than squander it right now on a project dictated by others.

One factor left unsaid on Tuesday may have been the financial harm the Lupoli Companies might suffer if the city had terminated the agreement. Back in April 2024, Mr. Lupoli himself described his dilemma. He told the council that he built the parking garage before either of the two buildings because lenders would give him more favorable rates on a construction loan if parking for those who would live in the new buildings already existed nearby. He also said that even though people using the Justice Center were using the parking garage, he needed the additional parking revenue that would come from the proposed apartment dwellers to cover the cost of constructing the garage.

Assuming that is accurate, had the city declared a default and walked away from the deal, Lupoli Companies would be squeezed by the ongoing fiscal deficit for the garage. Tying the matter up in court for years would not help with that and any claim for damages against the city could have been offset by a counterclaim for the lost revenue from the city’s own Hamilton Canal District garage caused by the city having been induced to allow the construction of a competing private parking facility.

Another factor in the city’s decision may have been that The Lowell Five Cent Savings Bank, a local institution, is the holder of the mortgage Lupoli Companies obtained on these parcels. According to records at the Middlesex North Registry of Deeds, in October 2021, the Lowell Five granted the three Lupoli-controlled LLCs that took ownership of these three parcels a loan of $19.7 million. In July 2022, that mortgage was amended to increase the indebtedness to $22.9 million. Then, in February 2024, a second mortgage in the amount of $1.7 million was similarly granted by the Lowell Five. While the registry records don’t show how much money was drawn from these loans, the total possible indebtedness on paper is nearly $25 million.

Finally, don’t forget that it’s an election year. Attending a much-publicized groundbreaking ceremony of a new apartment complex shortly before the election is a better look for incumbents than weekly executive sessions to discuss ongoing litigation.

As for the terms of the amendment adopted by the city council on Tuesday, it calls for 170 residential units to be constructed on the larger parcel and 100 residential units on the smaller one. Between the two buildings, the developer is supposed to include 10,000 square feet of commercial, retail, or restaurant space, although if the developer is not able to fill the space with those uses within two years of completion of the building, the developer may convert that space to more residential apartments.

The amendment also specifically authorizes Lupoli Companies to transfer ownership of the two undeveloped parcels to Boston-based developer Cabot, Cabot & Forbes with Lupoli Companies retaining ownership of the parking garage. The Cabot, Cabot & Forbes website shows some impressive-looking real estate developments by the firm, mostly in Greater Boston, so hopefully this Lowell project will be consistent with the rest of their portfolio.

Recall that last August the city council also authorized WinnDevelopment to construct a 124-unit residential apartment building on another Hamilton Canal District lot. Assuming that happens, and that the two apartment buildings now contemplated by Cabot, Cabot & Forbes all get constructed, the Hamilton Canal Innovation District will have been transformed into an enclave of apartment buildings with a courthouse, two parking garages, and not much else. Given the grand initial vision for the site and its historical legacy, that seems underwhelming, a case of settling for less than what might be gained by waiting.

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This week brought the sad news that Lowell-native and LHS Distinguished Alumni Tom Sexton, the former poet-laureate of Alaska, passed away at his longtime home in that state. Tom retained ties with Lowell and was deeply interested in city developments. Paul Marion posted an appreciation of Tom on richardhowe.com.

Also on richardhowe.com this week, I shared my experience at Khmer Literary Arts Day, a great event at UMass Lowell that featured four Cambodian-American authors reading from and discussing their work.