🔒What’s becoming of Chip Norton’s Worcester properties?

Four months after Charles “Chip” Norton filed for personal Chapter 7 bankruptcy, the prominent Worcester properties he was once the face of, as the managing director of Franklin Realty Advisors, have seemingly moved on without him. Norton was removed from the entities managing Mercantile Center and Worcester Business Center in Worcester in May, amid a slew of lawsuits accusing him and his businesses of unpaid debts and ahead of his June 23 bankruptcy filing. A new property management firm, Eastport Real Estate Services of Wakefield, has been brought in to manage both sites. The properties are now being led by individuals who were already invested in the projects, said Mark Donahue, an attorney at Worcester law firm Fletcher Tilton, which is based in Mercantile Center. Donahue facilitated the changes to the entities managing the properties.

With prominent Central Massachusetts tenants, the properties appear to remain stable despite the interwoven nature of Norton’s personal and business finances, which was revealed in his bankruptcy filings. The Worcester Business Center owes $530,976 in overdue real estate taxes, but the other Worcester properties are current on their payments. Norton’s bankruptcy filing revealed a list of more than 50 creditors he owed money to, including the region’s power players and high-profile institutions, such as Cornerstone Bank, Country Bank, Middlesex Savings Bank, Rockland Trust, Savers Bank, Webster Five bank, Downtown Worcester Business Improvement District, and state agency MassDevelopment. Five claims from creditors totalling $75.63 million have been filed as part of the bankruptcy proceedings, ranging from a claim from Ware-based Country Bank for $67 million in money loaned for obligations relating to FRA’s Front Street properties, to a claim of $89,100 in unpaid rent from a landlord of a Brookline apartment Norton had rented. Norton’s bankruptcy case remains ongoing.

Office towers still standing

Despite Norton’s legal troubles, the properties he was once fronted have continued to operate as if nothing had happened, said Donahue. Eastport was brought in by the investors, who had taken over control from Norton amid his exit in the spring from Franklin Realty Advisors, which is based in Wellesley. The names now listed on Front Street Associates, the entity behind Mercantile Center, are Paul Mucci, John Lauring, and Mark Wetzel.

John Lauring is president of Worcester-based Lauring Construction. The firm has been involved in more than 40 projects totaling $30 million for FRA, according to Lauring’s website, but sued the firm in May over unpaid debt in Worcester County Superior Court. Paul Mucci is the retired executive of Devonshire Investors in Boston, a private investment firm affiliated with the parent of Fidelity Investments, according to the website for Merrimack College, where he sits on the board of trustees. Mark Wetzel is a retired president of Connecticut-based Fiducient Advisors, according to the website for the University of Vermont, where he sits on the board of the university’s business school. Eastport retained the on-site FRA staff and other personnel who operated the building during FRA’s time managing the property. Donahue said the properties are financially stable, with the City of Worcester confirming Front Street Associates is up-to-date on all real estate taxes and other payments. “It is our understanding that the Mercantile Center and [Worcester] Business Center properties are stable,” said Tom Matthews, media and public relations administrator for Worcester City Manager Eric Batista. The 21-story, 468,400-square-foot office tower at 100 Front St. has a vacancy rate of 5.1%, according to real estate data provider CoStar. A net of about 20,000 square feet of space has become available in the last 12 months, ending a nearly two-year run where the building was nearly completely full, with a vacancy rate of 0.8%. This compares to a vacancy rate of 10% a decade ago. The eight-story, 176,523-square-foot office building at 120 Front St has a vacancy rate of 16.6%. A net of 14,900-square-feet has become available at the site in the last 12 months, causing the occupancy rate to drop from 8.4% in the second quarter, but still well above its 10-year low of 41.1% in 2016, before FRA was involved at the site. The building continues to see high demand, said Will Kelleher and Jim Umphrey of real estate firm Kelleher & Sadowsky Associates. The firm is among the building’s tenants, which includes M&T Bank and federal agencies like FBI. Both office towers at Mercantile Center benefit from the relative lack of available high-quality office space in Worcester, said Kelleher and Umphrey. The two office building’s vacancy rates compare to Worcester’s overall 8.3% vacancy rate for 1.88 million square feet of four- and five-star office space. Both are much better when compared to the 19.9% vacancy rate for the 32.44 million square feet of four- and five-star space found in Boston’s Financial District, according to CoStar.

Five-star office spaces, also referred to Class A, are generally defined as state-of-the-art buildings featuring high-quality lobbies, top quality finishes, and plenty of national lighting. Four-star buildings are above-average spaces exhibiting some qualities of five-star buildings but are generally older. Worcester’s top-level office spaces draw an average asking rent of $26.48, compared to the Financial District’s average rate of $69.15. Worcester’s available stock of high-quality office space was further reduced by the ongoing conversion of the former Fallon Health headquarters at One Chestnut Place, which Boston-based Synergy is developing into 198 market-rate apartments. The 218,422 square feet of mixed-use space surrounding the office tower at 100 Front St. has a vacancy rate of 43.1%, with office tenant Worcester District Registry of Deeds occupying the most space, at 93,092 square feet. The property had a vacancy rate of 23.6% in 2022, but lost a key tenant when the CVS at the site closed in fall 2023. Empty retail space makes up a majority of unused space at the site, with the unoccupied 25,649-square-foot Foothills Theater accounting for available space. The site has managed to find some new tenants, signing Planet Fitness to a 12-year lease for 15,578 square feet in February. Kelleher & Sadowsky found a creative use for the 22,287 square feet of empty space at Mercantile Center once used as a COVID-19 testing site during the pandemic, inking a deal in November with Belgium-based immersive exhibition company Exhibition Hub. That firm operated a Vincent Van Gogh immersive art exhibition in the space and is now hosting a similar attraction featuring the work of Claude Monet.

Business Center owes $531K in taxes

Worcester Business Center, located at 67 Millbrook St. adjacent to the interchange between Interstates 190 and 290, is working to catch up on some of its financial obligations in the wake of Norton’s bankruptcy, Donahue said. The City said the property owes $530,976 in overdue real estate tax balances. The entity behind Worcester Business Center is now solely-managed by David Woodbury, with Norton removed in May. Woodbury is the retired president of Worcester printing and engraving firm Woodbury and Co. He sits on the board of trustees for the EcoTarium. The 265,000-square-foot office building was formerly a mill building, but has undergone an extensive renovation into Class A office space. The site’s tenants include UMass Memorial Health, Elder Services of Worcester Area, the Department of Revenue, and Geisel Software. Worcester Business Center’s vacancy rate sits at 13.8%, up from a rate of 3.3% in 2020. The site has seen a net leasing of 5,200 square feet in the last 12 months. Eric Casey is the managing editor at Worcester Business Journal, who primarily covers the manufacturing and real estate industries.