It was shocking to see Worcester city and business leaders fire a double-barrell shotgun blast at Worcester Polytechnic Institute over the college’s plans to convert two hotels near its campus in the Gateway Park neighborhood into student housing.
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One of the great things about the Central Massachusetts business community is it’s a true community, where the players all know each other, and as a rule, collaborative approaches to most issues rule the day. Like any other free market, our economy has plenty of competition, and organizations tend to act in their self-interest first; but they maintain a civil and cooperative vibe, unlike more cutthroat economies like Wall Street or Silicon Valley.
So, it was shocking to see Worcester city and business leaders fire a double-barrel shotgun blast at Worcester Polytechnic Institute over the college’s plans to convert two hotels near its campus in the Gateway Park neighborhood into student housing. First came a sharply pointed and very public letter from the city’s Economic Development Coordinating Council, which is composed of officials from the City of Worcester, the Worcester Regional Chamber of Commerce, the Worcester Business Development Corp., and Massachusetts Biomedical Initiatives. The primary concern was the loss of city tax revenues, especially since significant public money was invested in the formerly underutilized site’s environmental cleanup. Then tourism agency Discover Central Mass. connected the loss of the hotel rooms to a weakening of the tourism industry, especially for larger events needing hundreds of rooms. Finally, the Worcester City Council took up the cause at its Aug. 27 meeting, excoriating WPI in every conceivable way.
While the potential loss of $1.6 million in annual tax revenues and the reduction of hotel rooms has a real downside, the impact of WPI’s plan is more nuanced. WPI is growing its presence in the city and increasing the city’s housing stock, meaning fewer students competing for nearby apartments and home rentals in a city beset by a housing crisis. With construction costs rising since the COVID pandemic, the conversion of an existing hotel building into student housing likely offers savings from the construction of a new dorm. In addition, nearly 400 more hotel rooms in the development pipeline at proposed projects near Polar Park, Washington Square, and downtown would alleviate the loss of those Gateway Park rooms. Hotel operators in the city have cited lower-than-expected occupancy rates as a significant business challenge and barrier to expansion.
In Worcester, we’re not used to these disagreements spilling out into a public fight, which causes each party to retreat further into hard positions. This should have been resolved without the vitriol. WPI does have the legal right to purchase property, but it has the responsibility to be a positive presence in the Worcester community. To compromise, WPI and the City of Worcester should negotiate a higher payment in lieu of taxes beyond the current $815,000 annually, to make up some tax shortfall. The fervor of the pressure campaign against WPI may bear results, but it further isolates the institution from Worcester’s leadership structure, which has a long-term downside.
This editorial is the opinion of the WBJ Editorial Board.
