Eagle Mill receives crucial federal tax credits for mixed-use project in downtown Lee

The project will revive and expand the historic mill site in downtown Lee into a combination of office space, both market-rate and affordable rental units, a hotel and a "public market" with multiple restaurants and food kiosks.

 Lee — Not long after a recent setback, the Eagle Mill redevelopment project received a shot in the arm this week as the project’s developer received approval from the National Park Service for millions in federal historic tax credits.

“In the grand scheme of things, this is as important — if not the most important — milestone yet,” Jeffrey N. Cohen, who heads Eagle Mill Redevelopment, told The Edge. “It’s a 20 percent credit, which is something north of $6 million.” 

The $60 million redevelopment project on the banks of the Housatonic River has been described by state Rep. William “Smitty” Pignatelli (D-Lenox) as “transformative.” The project will revive and expand the historic mill site in downtown Lee into a combination of office space, both market-rate and affordable rental units, a hotel and a “public market” with multiple restaurants and food kiosks. Click here to see a comprehensive listing of the planned uses.

Site plan for the Eagle Mill redevelopment.

In December, the project hit a bump in the road when the Massachusetts Historical Commission raised questions about “several historic homes” on West Center Street slated for demolition to allow for a possible hotel on the property.

Eagle Mill Redevelopment is seeking millions in state historic rehabilitation tax credits, but Cohen does not think the demolition of the homes will prove to be a barrier to the project.

Eagle Mill developer Jeffrey Cohen.

“We have responded to a number of concerns of the MHC,” Cohen explained. “They have yet to act on our application to give us credits, but hopefully as a result of the action of the park service, it might encourage them. When the park service approves something, it certainly has credibility.” 

Cohen insists the homes, most of which have already been acquired and have been deemed by the town historical commission to be blighted, are not historic. The mill was constructed in 1808 and the houses were built in the late 1800s and early 1900s. Other than their proximity, they were not connected to the mill in any way. Furthermore, over the years since their construction, the houses were all significantly altered over time and are in disrepair. 

The homes will need to be removed in order to make room for the proposed hotel. The MHC has asked for historical and architectural information about the houses and their historical association with Eagle Mill. Cohen said he has provided that information. 

Cohen said the timing of construction will be tricky to navigate. Construction should begin on most of the site at the same time because of the need to connect the various buildings to infrastructure such as water, sewer and natural gas. It is far more cost-effective to perform infrastructure work for the project simultaneously rather than piecemeal, he said. 

Speaking of infrastructure, Lt. Gov. Karyn Polito came to Eagle Mill last October to announce that Lee had received almost $5 million from a state MassWorks Infrastructure Program grant to upgrade 9,000 linear feet of water lines and support residential and commercial development in the Eagle Mill area. That’s in the town’s northern downtown district, which most people think of as the area where Joe’s Diner is located. The grant, which was initially denied on the first and second tries, was considered critical to the success of the Eagle Mill project.

Before receiving the letter of concern from MHS about the demolition of the adjacent housing, Eagle Mill Redevelopment had enjoyed a string of victories, even as the project expanded in scope. The company had secured needed zoning revisions, including the establishment of a so-called “smart-growth” 40R overlay district, site-plan approval from the Lee Planning Board and a special permit to work in a floodplain.

Cohen said the next step is to continue to press the state historical commission for the historic rehabilitation tax credits. When that comes through, Eagle Mill Redevelopment will apply for commercial financing for the housing units. Cohen is talking with NBT Bank, Lee Bank and Adams Community Bank, among others. 

Meanwhile, as Cohen is lining up financing from local banks, Rees-Larkin Development, a Boston-based developer of affordable and mixed-income housing, has partnered with Eagle Mill Redevelopment. The manager of the apartments will be Berkshire Housing Development Corporation.

A rendering of the residential units planned for the Eagle Mill Renaissance project.

In Berkshire County, Rees-Larkin was the lead developer in the renovation of 100 units of affordable housing at the Dalton Apartments in Pittsfield. In that venture, Jon Rudzinski, head of Rees-Larkin, gained approval from the state for the federal low-income housing tax credits, which provided approximately $3.2 million in equity.

In late 2017, Cohen’s company, Mill Renaissance, purchased the property from the Quinn family for $700,000. At that time, Cohen also secured the services of DEW Construction Corporation as general contractor and as a partner. Mill Renaissance is a 50-percent owner of Eagle Mill Redevelopment LLC, while DEW Properties LLC owns the other half.

Schweitzer Mauduit International, now doing business as SWM, was primarily a manufacturer of paper for tobacco companies when it operated in the Eagle Mill. The company closed the sprawling mill on the banks of the Housatonic in downtown Lee in 2008, resulting in the loss of 165 factory jobs. Also closed was a plant in Lenox Dale.