Keohane Company, Boston, Massachusetts - Real Estate Development, Construction and Property Management

Developer eyes downtown for high-rise condos
By JACK SPILLANE, Standard-Times staff writer

NEW BEDFORD -- Boston developer Dennis Keohane wants to build a 10-story, market-rate residential tower with an underground garage at the site of the former Keystone Building on Union Street.

Three years ago, Mr. Keohane renovated the down-and-out Sea Breeze bar at the foot of Union Street into the Catwalk, now a popular downtown night spot.

He recently rehabilitated the first floor of an adjacent four-story structure into a function room for Catwalk, devoting the upper floors to three new apartments. He says he is looking to do more projects in the center of New Bedford.

"I've seen the potential in the downtown," the 38-year-old native of Ireland said. "I've seen it from the day I drove down there."

Mr. Keohane, however, has not presented any plans to the city. He is waiting to evaluate the clientele that moves in to two adjacent properties -- the Coffin Lofts and Union Street Lofts -- being renovated for predominantly low-income housing, he said.

The city and Hall-Kean LLC have received state and federal assistance to create artist loft-style apartments in the adjacent Coffin and Union street buildings, and their grant requires that roughly 70 percent of the units be devoted to low-income tenants.

"I'm not going to put up a skyscraper if I can't sell the (market-rate) units," Mr. Keohane said.
Two other nearby buildings -- the apartments at the Bristol Building and the condominiums at the former Jimmy Connors Pub building -- are devoted to market-rate units.

Market-rate condominiums such as he plans, Mr. Keohane said, would attract a more upscale clientele, the kind of individual willing to pay for on-site parking and amenities such as laundry facilities.

He said he is convinced that a downtown New Bedford market exists for aging baby boomers tired of mowing lawns and maintaining single-family homes.

Patrick Sullivan, director of the city's Community Development Block Grant office, said that 61 percent of city residents are low income and that new downtown housing would naturally include a mix of income groups.

"Every city has mixed demographics," he said. "That's what makes neighborhoods unique and vital."

The low-income units on the second floors of commercial buildings on Union and Pleasant streets would probably attract young artists starting out and UMass students, as opposed to young families, he said.

The units as renovated will be better for Mr. Keohane's plans than lying vacant as they had for years, he said.

Mr. Keohane had originally planned to tear down the historic Keystone Building and build 20 condominiums. But until last fall, he had been hamstrung by the city's desire to renovate the historic streetscape of the four-story structure as it stood.

He put the project on hold, waiting to see who moved into the loft-renovated buildings, but in the meantime, the roof of the Keystone -- which had been vacant for a decade under a previous owner -- collapsed after a severe rainstorm last October.

That left Mr. Keohane free to pursue a different kind of project on the site, one that could now include as many as 36 condominiums.

After talking to James Muse, the owner of the Connors building (Mr. Muse was the first downtown developer to build condominium space above a downtown commercial structure), Mr. Keohane said he decided the aging baby boomer market wants units that include ample space and parking.

His dream is to build a structure that would house commercial space on the first floor of the former Keystone space, a two-story garage below ground and nine stories of 1,600- to 1,700-square-foot condominiums on top.

Excavating through ledge at the downtown site could add $30,000 or so to each unit, but he still believes the project could work in the right circumstances, he said.

"It will be a sign of prosperity and moving forward."
At least some of the apartments on the top five floors of the tower would have views of New Bedford Harbor, and all would be sold at market rates, he said.

Mr. Keohane said he envisions the condominiums on the site going for $400,000 to $500,000 apiece.

City Planner David Kennedy said Mr. Keohane's project would need to obtain a special permit exempting it from the downtown's seven-story height limit and residential setback requirements.

Both those requirements could be met in the city's Downtown Overlay District zoning, adopted in 2003, which makes it easier to build residential units downtown, he said.

A special permit is generally an easier threshold than a variance and probably could be obtained by Mr. Keohane, Mr. Kennedy said.

Whether the downtown would support market-rate units in the high end of the market is uncertain, he said.

"All the zoning is in place for it to happen, but we cannot zone market conditions," he said.

Mr. Keohane said he scouted around Southern New England -- including Fall River and Newport -- before deciding the best investment was New Bedford.

He got in on the ground floor when the city's real estate market was depressed, paying only $100,000 2½ years ago for the Catwalk building, now appraised at $450,000, and only $205,000 two years ago for the Keystone site, now valued at $700,000, he maintained.

With its cobblestone streets and views of a picturesque fishing fleet, he thinks New Bedford has great potential, he said.
He gave the example of Kinsale in his native Ireland and said it was once a down-and-out fishing village but is now a fashionable locale.

"New Bedford has all the ingredients to be truly spectacular," he said.

Contact Jack Spillane at jspillane@s-t.com

This story appeared on Page A1 of The Standard-Times on May 31, 2005.