Banker & Tradesman
March 2, 2020
By Steve Adams
Chairman and founder, Mount Vernon Co.
Industry experience: 34 years
Bruce Percelay’s development firm Mount Vernon Co. was an early arrival to Allston’s multifamily boom, and it continues to build apartment and condo projects on Boston’s western frontier. At the same time, it’s exploring options for office and lab development to take advantage of the proximity to Cambridge’s life science cluster. Along with Newton-based National Development, the firm is preparing plans for redevelopment of the 8-acre WBZ headquarters on Soldiers Field Road. The first phase will include a modernized replacement TV studio including 62,000 square feet of office and production space. The development team is evaluating options for the remainder of the site.
Q: How much longer can the multifamily and commercial growth cycle sustain itself in Greater Boston?
A: We’re in totally uncharted territory. I don’t think anyone knows. The fundamentals in Boston are still remarkably strong and there’s both job growth and population growth. Those are the two elements that have to be present for multifamily to succeed. In Allston alone, there’s probably 3,000 units that could emerge over the next three or four years. You have to produce a better product, and being a commodity is probably the most dangerous place to be in the market. One of the considerations in Boston is the commute time is becoming unacceptable. Locations that were once reasonable to commute [from] aren’t anymore.
Q: Can multifamily developers still compete against life science developers to acquire sites in Boston?
A: We’ve been doing this for over 30 years and when we built the Allston Green district, it was the first major development in Allston in over half a century. We’ve seen land costs go up in a fairly spectacular fashion. The life science push to Allston is a relatively new phenomenon, but it is happening and we are a participant in that. Clearly, life science is the top of the food chain, and when you’re seeing rents of $100 per square foot, life science can pay more than anybody. But on the multifamily side, with the city allowing more density, the sites are becoming more and more valuable. In Allston, most of the sites have been spoken for. Along Western Avenue, you can count on one hand who the owners are, Harvard being the largest. The days of Allston being the new frontier are over.
Q: You mentioned that commodity properties have the most risk. How does Mount Vernon Co. differentiate its projects?
A: We have no interest in building conventional buildings. When you drive by one of our buildings, it tends to stand out. The Green District was the first truly green apartment community possibly in New England. We were the first landlord to prohibit smoking, first to do separate metering for water. There’s a cost to that. We spend more money on our buildings than conventional merchant builders. We build them for the duration and to make a statement. The Arthaus [a 74-unit apartment complex under construction] at Everett Street and North Beacon streets will be a perfect example of that. It is built around the notion that art in Allston is a backbone to the community. We’re donating a $1 million art gallery to the community on the first floor to promote local art.
Q: Any plans for non-traditional housing models?
A: We’re working on what could be a compact living project along the Pike. That is 35 Braintree St., a site we just purchased from Herb Chambers right next to the Trac 75 apartments. Compact living clearly is going to satisfy a need in the market for low entry points and well-located new construction. The question is how deep the demand is. It needs to be spread out and not just concentrated in one place. Coliving is another story, and that’s a pair of dice we’re not willing to roll. If you’re wrong, you have a special-purpose building that you don’t necessarily know what to do with. I’m sure there’s a population out there that wants to prolong the college living experience as long as they can, but if that changes, I’m not sure where you go from there.
Q: What’s the most likely redevelopment plan for the WBZ property?
A: We’re still determining it. The first thing is to rebuild the WBZ site for a new TV station which will be spectacular. What we’re going to do with the rest of the site is to be determined, but we’re going to tear down 1200 Soldiers Field Road which is where our office is, and going to build a new TV station for WBZ and that will free up the rest of the acreage for what we determine to be the highest and best use.
Q: With most of the good sites on Western Avenue spoken for, where do developers look next?
A: There’s no such thing as a bad location in Boston anymore, and it used to be there were places you didn’t even want to go, let alone own real estate. Malden has grown tremendously, and a lot of it was designed to serve the labor force at the casino, and time will tell if that is going to remain. Lynn comes up a lot because of its low cost of entry, lack of development and opportunity zones. The question is: if the music stops, those are the cities you want to be caught in during a recession?
Q: What was the impetus for your entry into journalism as publisher of N magazine on Nantucket?
A: I used to be in advertising and I have always had an attraction to graphics, and I like to write. Almost 20 years ago, I was approached by some folks who wanted to set up a magazine on Nantucket. I teamed up with them and they’ve since departed from the scene, and it has been an unbelievable success. A friend of mine, former Time Inc. CEO Joe Ripp, said we reach more billionaires than they do. The average reader earns north of $600,000 and has a net worth of between $3 million and $5 million. We’re an advertiser’s dream because we’re so efficient: we’re a BB shot to extreme wealth.
Percelay’s Top Five American Muscle Cars
1963 – Split–Window Corvette 1965 – 427 Shelby Cobra 1966 – GT 350 Shelby Mustang 1968 – Camaro Z-28 1970 – Dodge Hemi Challenger