When fully built out, Tuscan Village will feature hundreds of housing units, a large Market Basket, almost 1 million square feet of office space, 800,000 square feet of retail space and two hotels spread over 170 acres. Image courtesy of Tuscan Brands
The thunder of horses’ hooves may be long gone from the former Rockingham Park race track, but the developers behind a new mixed-use development on the site hope a similar sound will soon ring out: the footsteps of office tenants beating a path to fill almost 1 million square feet of class A space at their Tuscan Village project.
The 170-acre project is unlike any other in the state, allowing master developer Joe Faro, owner of Tuscan Brands, to propose what will effectively be a new downtown for the town of Salem.
“It allows you to execute a mixed-use plan effectively,” said Mike Powers, Tuscan Village’s senior vice president of leasing. “Consumers are looking for a place to live and a place to work. They find it advantageous to be located in a project where there’s a pedestrian focus. They can leave their office and go to the movies, leave their office and go to the store. It’s a tremendous draw.”
Faro bought the enormous, triangular racetrack site for $49 million in 2016, according to media reports at the time, and moved quickly to build out the northern 50 acres of the site. Now fully developed, Powers said, those 50 acres feature a Market Basket, the Salem Ford car dealership and 260 apartment units.
Elsewhere on the site, Powers said 96 townhouses are being built and sold “as we speak” and the company recently announced Cushman & Wakefield has been retained to market the office and retail portions of the site.
’We’re Beyond the Pretty Pictures’
A T-shaped shopping street lies at the heart of Tuscan’s design for the remaining 120 acres, with a large luxury apartment complex and pads for retail buildings beyond.
The main street is lined with 3- and 5-story mixed-use buildings and entertainment options, which screen parking lots for visitors to what Tuscan hopes will be a sales tax-free regional destination just minutes across the Massachusetts border.
On the far side of a lake with a promenade and the main road through the site sits the main office area, which Powers said offers opportunities for “a wide range of users” from corporate headquarters and medical facilities to boutique offices.
Over 800 units of housing will be included in the final development, along with two hotels with over 300 rooms between them. The site borders the Mall at Rockingham Park, the Route 28 commercial corridor and the newly-widened Interstate 93.
Significant amounts of infrastructure to support this development have already been built on the site, Cushman & Wakefield New England executive director Thomas Farrelly said.
“We’re beyond the pretty pictures … [Faro and Powers] have put in $45 million worth of road and infrastructure into the site,” he said.
Tuscan Village is located in Salem next to the newly expanded Interstate 93 and the Mall at Rockingham Park. Image courtesy of Tuscan Brands.
Corporate Appeal
Farrelly said the site offers potential corporate tenants the opportunity to locate their offices at a “work/live/stay/play/shop, urban, Millennial mecca” that will give them a decisive edge in attracting talent in what promises to be a tight labor market for quite some time.
“The most important and valuable resource today is labor. We have almost 120,000 people that commute from New Hampshire [to Boston] every day, a long commute only to sign on for a 5.5 percent income tax,” he said. “This whole amenitized environment [offered by Tuscan Village] … it’s on steroids. It’s a business environment that’s an ideal recruiting opportunity.”
In addition, Farrelly said, the site offers potential tenants a relatively frictionless building process. Tuscan Brands has secured approval from Salem town planners for the uses and density on the site, Powers said, and only has to get approval for final designs on each phase of the project.
“Usually there’s a long lead time for getting a building approved. The entitlement risk has been completely eliminated. The town and the state have completely embraced this project,” Farrelly said. “If you’re growing at a certain clip, you need space delivered to you on time.”
Farrelly and Powers said they were not ready to announce specific retail or office tenants yet, but said negotiations were in process with several, including at least three in the final stages.
Both Farrelly and Powers said the New Hampshire and northeastern Massachusetts market could absorb the project’s planned 1 million square feet of commercial space.
According to Colliers International’s New Hampshire most recent survey of the area’s commercial market, vacancy rates for class A office space in Salem and Manchester were just shy of 20 percent in the fourth quarter of 2018.
However, rates in nearby cities were sharply lower – 1.07 percent in Dover, 2.33 percent in Concord, 4.74 percent in Nashua and 7.72 percent in Portsmouth, with rates trending steadily downward throughout 2018. Around 320,000 square feet of office and industrial space was under construction at the end of 2018 in the Salem area, Colliers noted.
