Housing plan to redefine mill site

The legacy of Malden Mills Industries Inc., whatever the outcome of the company's recent bankruptcy protection filing, may be a multimillion-dollar residential redevelopment of a portion of its Lawrence property, according to city officials and others.

"The days of large cities relying on two or three big businesses are over," Mike Sweeney, Lawrence planning director, said. A planned four-year, $106 million project to convert seven Malden Mills outbuildings to mixed-income housing "will transform the whole Broadway area and, most important, will be one more option for people to rent or buy in Lawrence," he added.

Boston-based Winn Cos. has an agreement with Malden Mills to purchase the buildings for $10 million "and create a campus of historic buildings," said Larry Curtis, one of two managing partners of Winn.

It's unlikely that a buyer of Malden Mills, a leading maker of Polartec synthetic fleece for consumer and US military garments, would tamper with the redevelopment agreement, Curtis said.

Construction of the first phase could begin this year, he said.

In its Jan. 10 announcement that it had filed that day for bankruptcy protection in Delaware, Malden Mills said it was poised to sell the company to Gordon Brothers Group of Boston for $44 million. A day later, a private equity firm in Philadelphia, Chrysalis Capital Partners, said it was prepared to make a similar offer for Malden Mills.

Fifteen potential buyers have signed confidentiality agreements with Malden Mills, but so far, only Chrysalis "has identified itself," said David Costello, spokesman for Malden Mills and head of the company's government business unit.

It's expected that Malden Mills will emerge from bankruptcy in 45 days, after which a buyer will be selected, Costello said.

Proceedings have now been reassigned to the federal Bankruptcy Court in Worcester, which had jurisdiction when the company came out of bankruptcy in October 2003.

In its latest filing, Malden Mills listed assets of $60.6 million and liabilities of $130.7 million. There are 835 workers, 30 of whom are assigned to a Hudson, N.H., plant. There have been no indications of how many workers would be retained by a new owner.

Although revenues of privately held Malden Mills have been inching up in recent years to about $160 million in 2006, debt service costs have eaten away at sales gains, Costello said.

The lower-cost housing and historic face lift that the reuse plan would bring to the Malden Mills property, which straddles the Methuen line, would be a boon to the area, said Robert Halpin, president of the Merrimack Valley Economic Development Council of Lawrence.

"But I really hope that the new owner, whoever that is, will be able to stabilize the finances so that the company's operations in Lawrence can continue," he said. "After all, Aaron Feuerstein invested heavily in state-of-the-art equipment after the fire."

Halpin was referring to the then-owner, whose grandfather started the company in 1907, and the December 1995 fire that destroyed three of the nine buildings on the 29-acre complex.

Feuerstein is no longer involved in company operations nor is he a board member. But he still controls 5 percent of the company's shares.

While bankruptcy proceedings play out, Winn Cos. is seeking state and federal historic tax credits for its housing plan, Curtis said. "Those credits would represent 40 percent of total development costs, a huge help," he said.

Plans calls for 600 affordable apartment units to be built over a four-year period, with estimated rents ranging from $800 to $1,200 a month, he said.

There also will be a home ownership component, with 40 percent of the 150 units in the first phase being condominiums priced from $180,000 to $250,000, Curtis said. "How many other [condos] will be built will depend on market acceptability," he said.

Winn Cos., he pointed out, has developed 154 apartments in the old Boott Mills complex in Lowell, where construction of 120 condos is now underway. Also, 75 apartment units have been built on the former Whitman Mills property in New Bedford, he said.