The dilapidated former Eagle Mill awaits its 'transformation.' Photo: Terry Cowgill

Eagle Mill Redevelopment in Lee receives $16 million in tax credits for housing

When completed, the mixed-use project will include 122 apartments. The $16M in tax credits will finance phase one, with 56 affordable and market-rate apartments in two buildings.

LAWRENCE — The Eagle Mill redevelopment project in Lee received a big boost yesterday when the state announced it has awarded the developer millions in tax credits.

At an announcement yesterday in Lawrence, which was another major recipient of the state aid this week for the transformation of an old mill into housing, the administration of Gov. Charlie Baker announced that 28 projects in 21 communities across the state will receive direct subsidy funding and federal and state housing tax credits.

“As Massachusetts continues to recover from the COVID-19 pandemic, it is important that we continue to prioritize new affordable housing development to help our most vulnerable families,” said Baker. “Stable housing is the foundation of healthy, prosperous communities, which is why our administration has proposed an immediate infusion of nearly $1 billion in federal recovery funds to rapidly increase capacity for production in every part of the state.”

Eagle Mill developer Jeffrey N. Cohen and U.S. Rep. Richard Neal at the Eagle Mill site in August 2019. Photo: Leigh Davis

The total in direct funding and tax credits for the 28 projects was $139 million. Baker’s office did not say how much each project received, but Eagle Mill developer Jeffrey N. Cohen told The Edge that Eagle Redevelopment LLC received $16 million from the state Department of Housing and Community Development (DHCD) in federal and state low-income housing tax credits and subsidy funds. That is the same amount Eagle Mill Redevelopment asked for.

The Eagle Mill project had already received $1.8 million in Massachusetts Historic Rehabilitation tax credits and $6.8 million in historic tax credits from the U.S. Department of the Interior, for a total of $8.6 million before yesterday’s announcement.

When completed, the mixed-use project will include 122 apartments. The $16 million in tax credits Cohen received yesterday will finance phase one, with 56 affordable and market-rate apartments in the Union Mill and Eagle Mill buildings. Eagle Mill Redevelopment is partnering with Rees-Larkin Development and Berkshire Housing Development Corporation.

According to Baker’s office, all 56 units will be affordable to households earning less than 60% of area median income (AMI), with eight units further restricted for households earning less than 30% of AMI, and, in some cases, making the transition from homelessness.

See video below of state officials, including Gov. Charlie Baker and Lt. Gov. Karyn Polito announcing the next round affordable housing awards yesterday in Lawrence:

In May 2020, Cohen announced that the project would be scaled down because of the COVID-19 pandemic. Initial plans had called for a public market to feature, among others, the Marketplace, a respected casual dining operation with restaurants and highly successful catering services in Sheffield, Great Barrington, and Pittsfield.

The 30,000-square-foot market would have included food kiosks and stalls featuring a variety of cuisines, including a microbrewery, coffee shop, and other related vendors, and perhaps a space for entertainment, not unlike a mini-version of Boston’s Faneuil Hall Marketplace.

Cohen will now put a scaled-down food operation with the Marketplace in the machine shop building, a 12,000-square-foot building to be developed for mercantile use. That frees up lots of space in the larger Eagle Mill building for additional housing.

U.S. Rep. Richard Neal spoke about the Eagle Mill development when he visited the site in August 2019. Photo: Terry Cowgill

The $60 million project has been described by state Rep. William “Smitty” Pignatelli, D-Lenox, as “transformative.” It has generated considerable excitement in the town of Lee and beyond. U.S. Rep. Richard Neal, D-Springfield, has said the redevelopment of Eagle Mill “will undoubtedly jumpstart economic vitality in this region.” Click here to see a comprehensive listing of the planned uses.

Cohen said Rees-Larkin cannot start construction until the company closes with DHCD — a process that typically takes about six months. Meanwhile, Cohen foresees the next step as obtaining permits for the demolition of the seven vacant houses on West Center Street that his company had acquired earlier. The houses will first need to be remediated for hazardous substances.

Construction materials and labor costs have also risen considerably since the pandemic took hold in March 2020. This could present a problem and there are a couple of ways to approach it.

“You kind of wait for the costs to come down, or if you’re lucky you can negotiate that, but that’s highly unlikely,” Cohen said. “Or you go to the state and say ‘Everybody’s got this problem’ — which they do — ‘How can we fix it?'”

At any rate, Cohen hopes to have a ceremonial groundbreaking before Thanksgiving, in advance of the demolition of the houses.