IN FOCUS: Pending sale of downtown building may add to Great

During the eight-month-long debate over whether Great Barrington should tighten the reins on short-term rentals with a new bylaw, the scale of the town’s housing challenge and what to do about it was at the center of the discussion. Without what proponents called “guardrails,” would real-estate investors and developers run rampant across the town, scooping up housing inventory to use in ways that compound the dual challenges of affordability and availability?

Last month, the town voted to put those limited guardrails in place. Opponents have argued the bylaw will do nothing to address a lack of housing that’s affordable for those who work in town. They’ve suggested there are better solutions to housing challenges faced by working families, seniors, those with modest incomes, and local businesses trying to staff their stores and restaurants. Primarily, they say, we need developers to build new housing.

Into this moment comes news that a Great Barrington real-estate agent whose family has offered affordable downtown apartments for nearly 40 years is close to selling her building to a local developer whose renovation plans may displace a dozen residential tenants, according to public documents and interviews with the building’s owner, her attorney, current and former tenants, and others with knowledge of the pending transaction.

The Main Street entrance to the Mahaiwe Block residences. Photo by Bill Shein.

The long-rumored sale of the historic, 117-year-old Mahaiwe Block at the corner of Main Street and Castle Street, which may continue a trend of high-end residential development in Great Barrington’s downtown core, came into sharper focus last month when an environmental inspection during the sale’s due diligence uncovered kerosene contamination on the property from an underground fuel storage tank, according to documents filed with the Massachusetts Department of Environmental Protection (MassDEP).

The amount of kerosene detected from the tank, which was no longer in use, was at the level of a “reportable release” according to state environmental regulations. This set off a legally mandated procedure, now ongoing, to evaluate and remediate any environmental contamination.

Work in the alley behind the building has been underway since Monday, and an updated filing on the cleanup’s progress is due to MassDEP by August 1, according to Katherine Fournier, Acting Service Center Manager for MassDEP’s western region.

Great Barrington Fire Chief Charles Burger confirmed late last month that there is “no imminent danger from soil contamination, though it’s an environmental hazard, obviously.” A call last month to WJF Geoconsulting, the state-certified Wilbraham firm overseeing the work, was not returned.

The building owner’s corporate entity, Barrington Realty, LLC of Great Barrington, was listed on MassDEP filings as the party responsible for addressing any environmental contamination.

On Thursday, July 14, a MassDEP-monitored cleanup was continuing in the alley behind the Mahaiwe Block building after the June 2 discovery of an underground fuel storage tank leaking kerosene into the soil. Photo by Bill Shein.

Ronda Parish, a Springfield attorney who represents that entity and building owner Madeleine “Mandy” Victor-Pieczarka, said in an interview last month that the environmental site assessment was “part of a potential real-estate transaction” and “a normal check to see if there are any underground tanks on the property.” She would not confirm at the time if a purchase-and-sale agreement for the building had been signed.

Asked if any residential or commercial tenants had been notified of the pending sale, Parish said, “No one discloses that before the transaction happens. Obviously, the tenants will eventually know,” she said, adding that “no legal notifications have gone out at this point.”

The building, which does not include the Mahaiwe Performing Arts Center, has 12 mostly one-bedroom walk-up residential units on the third floor and approximately two dozen small-office suites on the second floor that are often rented to nonprofit organizations, therapists, lawyers, and other small businesses.

The ground floor retail spaces on Castle Street and Main Street are currently occupied by the No. 10 restaurant, Berkshire Money Management, One Mercantile, Vault Gallery, Samantha Gale Designs, and WBCR-LP, the community radio station whose studio can be seen through its Main Street window.

In 2008 the building was added to the National Park Service’s Register of Historic Places.

The possible sale of the Mahaiwe Block and what it means for its residents has been the subject of speculation and increasing concern for months, according to interviews with 10 current building tenants, some of whom spoke on condition of anonymity because of their sensitive situation. It once again brings forward a debate about how town officials can best direct the skills, experience, and financial resources of local developers to align with the community’s housing needs and goals.

Tenants of the building told The Edge that as their annual leases expired this year they were not offered new ones as in years past—renewals that routinely came with only a nominal, if any, increase in rent—and did not receive an explanation. Many are now month-to-month “at will” tenants who can be asked to vacate with 30 days’ notice, according to Massachusetts law.

While it’s normal for a property owner to wait until a sale is complete to notify tenants, in this case, the lack of new rental leases created additional unease given the lack of available and affordable rental housing in town.

Rent for studio and one-bedroom residential apartments in the Mahaiwe Block have long been well below market rate, and currently range from approximately $525 to $750 per month, according to current and past tenants and others with knowledge of the building. That rate is significantly below market rate in Great Barrington, where one-bedroom apartments can start at $1,000 per month or more, with significant upward pressure on those prices since the start of the pandemic.

These longstanding affordable rents in the Mahaiwe Block have enabled an eclectic mix of local creatives and working people to afford to live downtown.

Alander Group’s Ian Rasch.

That seems likely to change. According to people with knowledge of the pending sale, speaking on condition of anonymity because of the sensitive nature of an incomplete transaction and the impact on residential tenants, the purchaser is real-estate developer Ian Rasch of Alander Group, with offices on Railroad Street in Great Barrington.

Rasch is an Egremont resident whose recent local projects include the mixed-use development at 47 Railroad Street, with a business partner, Sam Nickerson of Great Barrington, which has 13 high-end rental apartments and ground-floor commercial tenants including Moon Cloud and Marjoram & Roux restaurants and Familiar Trees bookstore. Last year he purchased and now has plans to renovate the Berkshire Community College building at 343 Main Street, and early this year he bought the Prospect Lake Park campground in Egremont.

Rasch was formerly the director of development at Allegrone Construction in Pittsfield. While there he oversaw the renovation of several historic buildings in Pittsfield into mixed-use properties with market-rate apartments.

Alander Group’s website describes its investment approach as seeking “to acquire assets below replacement cost in supply constrained markets, and drive appreciation through value-added renovations, expansions, and repositioning.”

That focus on “supply constrained markets” with insufficient housing inventory, like Great Barrington, and “repositioning,” which generally means renovations and upgrades, enables developers to take advantage of advantageous market conditions to, in most cases, charge higher rents. It’s a popular trend in real estate, especially among developers backed by private-equity investors.

Alander’s website also explains its focus on downtown locations: “For our investors, properties in prime, core locations reduce risk, maximize the value of land, and leverage valuable existing urban infrastructure.”

Rasch did not respond to a voicemail message or two emails requesting an interview about the pending sale, his plans for the building, or what assistance may be offered to the building’s residential tenants if they are displaced.

The sale price of the building has not been disclosed. Two people with knowledge of the pending transaction said last month that the parties hope to close in August.

If forced out of their Mahaiwe Block apartments, residents would face a tight local housing and rental market that has seen substantial price increases during the pandemic because of high demand, limited availability, and rapidly rising real-estate values. As a result, several residential tenants told me they are likely to move out of the area.

One third-floor resident whose lease was not renewed said, “I love living in an affordable apartment in downtown Great Barrington … [this building] is home to many creative people who contribute a lot to the community and who really appreciate the opportunity to live in such a convenient place,” the resident said. “Great Barrington needs more of this.”

Suspicion among residents about a possible sale increased in March when they were asked to give access to a licensed contractor “to do a 3D scan of the entire building to determine renovation costs,” according to a flyer circulated by the building’s property manager. On March 22 and 23, their units were photographed and measured, they said. No additional details were provided to tenants and no further communications about renovations have been sent.

The possible sale of a large multi-unit building has raised concerns among local officials that a number of residents could simultaneously find themselves without housing.

Selectboard Chair Steve Bannon told me that while he wouldn’t speculate on the specifics of a still-pending private real-estate transaction, he suggested the town can “express displeasure, put some pressure on people to not let this happen in certain circumstances.”

“The town would be very displeased if a large group of people were evicted, especially in the middle of a housing crunch without anything set up to help them find places to live,” he said last week.

Victor-Pieczarka, the building’s owner, is a Berkshire County native, Great Barrington resident, and a real-estate agent with Stone House Properties. She said she’s ready to move on from managing a property that she described as a full-time job.

“I’m at an age I don’t want to deal with that building,” she told me last week. “I can’t live my life for everybody. [The tenants] had a really good run and I feel badly, and I can’t make it better, and that’s frustrating [to me].”

She said monthly rents for building tenants have hardly increased in more than a decade, which was confirmed by numerous residents. The tenants also received a month-and-a-half rent abatement in the early days of the COVID-19 pandemic.

Mahaiwe Block owner and Great Barrington real-estate agent Madeleine Victor-Pieczarka. Photo courtesy Stone House Properties.

“Mandy was extremely kind and generous when COVID hit,” said Mickey Friedman, a writer and Edge columnist who has lived in the building since 2017. “She forgave rent one month and reduced it another,” he said.

Victor-Pieczarka expressed concern that even after providing affordable, often below-market-rate downtown apartments for decades, there would still be a strong, negative community reaction to her decision. “The last I heard this is a free country. I have a perfect right and freedom to sell my property, and it looks like I may be vilified for it,” she said. “This was a hard decision for me to make.”

When I asked Victor-Pieczarka if she considered selling to someone other than Rasch, perhaps to a different kind of purchaser who might be more likely to try to preserve affordable rents, she said that she had.

“I gave it a lot of thought, because my late husband loved that building,” she said, referring to Raymond F. Pieczarka, who purchased the building, initially with two partners in 1985, according to real-estate records. He passed away in February 2019 at age 84 after what his family described in an Edge obituary as a long struggle with Alzheimer’s disease.

Born in Chicopee, Pieczarka was a mechanical engineer who in 1960 purchased Dee Service, an Agawam-based heating-and-cooling contractor, and expanded it into a thriving and successful business. He also made real-estate investments in central and western Massachusetts, according to state land records.

According to current and former Mahaiwe Block tenants, Pieczarka was enormously liked and respected for the way he managed the building and how he treated its tenants. In an interview, one former ground-floor retail tenant described him as “a really special human being who was honest, cared about his tenants, and cared about his building.”

Victor-Pieczarka said she believes her husband would support her decision. “He would be thrilled that [the building] is going to be upgraded. And as a realtor, that’s important to me. I see what derelict buildings look like, and there’s a point that you can’t bring them back,” she said.

Selling the building to someone who didn’t plan a substantial renovation was not a good option, she said. “A different kind of purchaser will be a slum lord by the end of the day,” she said. “That building needs all kinds of upgrades. You can have a crumbling building, or you can have a building that’s being maintained.”

Multiple tenants told me that while in the past the building was, as one put it, “beautifully kept up,” over the past year some maintenance issues have not been addressed consistently, from broken window mechanisms to a security door that doesn’t properly close and lock on its own.

There were also intermittent problems with the heating system last fall, including no heat for several days in late November. According to emails reviewed by The Edge that were sent to numerous tenants by Berkshire Property Managers, the Pittsfield-based management company that residents were instructed to contact with maintenance requests, the company said it was having difficulty locating needed parts and a contractor to complete repairs.

Following the photographing and measurement of their units in March, tenants suspected that the unaddressed problems were the result of a transition from a longtime local property manager to the professional property-management firm. They also said they wondered if repairs were being deferred because sale of the building was imminent, creating more unease and uncertainty about their housing situation.

Chris Pipa, a managing partner of Berkshire Property Managers who sent the e-mail updates to tenants regarding the November heating outages, did not respond to a phone message or e-mail seeking comment.

Graham Dean, a board member at WBCR-LP radio and a program host since 2005, said the station has not received any information about a pending sale or its potential impact on its ground-floor tenancy. “We haven’t received any notification of what’s happening,” other than the rumors and speculation that have swirled for months, he said.

He said the station “has a good relationship” with Victor-Pieczarka and has paid “a very reasonable rent for a Main Street space” since moving into its storefront studio in early 2019. Around that time, WBCR-LP raised nearly $27,000 via a Kickstarter campaign to help pay for its new location and fund its operations.

Dean told me that the pandemic has been challenging for the station but that it’s managing. Still, the station would have “immense difficulties” if it were forced to relocate, he said, noting the lack of other available and affordable downtown storefronts.

Allen Harris, founder and CEO of Dalton-based Berkshire Money Management and columnist for The Edge, who renovated a ground-floor office space that opened to clients in November, 2021, said he has not been informed of any pending sale or of plans to renovate the building. He told me that he has a three-year lease with a renewal option.

Harris is also a board member of the Community Development Corporation of the Southern Berkshires (CDCSB), which builds and manages affordable housing in the region and is working on projects to fill a significant need for so-called workforce housing. While he said he can’t speak to any plans a new owner may have for the building, he noted that constructing new affordable housing takes time. “It’s almost a glacial pace relative to the need because the need is immediate,” he said.

Even with expired leases and visits by camera-toting contractors adding to speculation that Rasch will empty the building’s top two floors and convert them to upscale apartments—like those he built at 47 Railroad Street—or luxury condominiums like those constructed by Lenox-based Benchmark Development at Bridge Street’s Powerhouse Square complex, any specific plans remain unconfirmed.

WBCR-LP community radio has been in a storefront studio on Main Street since 2019. Photo by Bill Shein.

Whether and how to update Great Barrington’s older housing stock—68 percent was built before 1970—as well as increase available housing is a significant challenge for the community. Also important is protecting the social and economic fabric of its vibrant downtown, as detailed in the town’s 2013 Master Plan, which states, “The character of downtown Great Barrington and Housatonic village is an important feature of the town’s overall attractiveness and economic competitiveness.”

Richard Stanley, the longtime Berkshires real-estate investor and owner of the Triplex movie theater who also serves as a board member of CDCSB, told me in two interviews this month that at various times he considered renovating individual apartments in Barrington House, his mixed-use building at 274 Main Street. He has long maintained what are widely considered to be reasonable rents for downtown residential and commercial space.

“Every time I looked at upgrading, the numbers never added up. I couldn’t get the additional rent for money I was putting into the apartment,” he said.

But he told me that Rasch’s calculations may be different because of how he finances his projects.

“Remember, Ian has an investment group behind him. This is not Ian’s money, or Sam [Nickerson]’s money,” he said, noting that he has met local residents who are investors in Rasch’s projects and “were happy with the returns they were getting.” He declined to identify the investors.

Stanley, who owns five Great Barrington properties, said that as a developer, answering to investors is far different than how he manages his own properties.

“I can say, ‘OK, I’ve made enough money, I’ve owned the building long enough, I don’t need to raise the rent,’” he said. “If you’ve got an investment group, it’s a different mindset. It’s just Capitalism 101.”

He told me that he embraces the power of the marketplace, but also acknowledges there are what he called “aberrations” in the market, particularly with housing. He’s a proponent of using tax incentives and zoning to guide real-estate development that aligns with community goals and has long seen affordable downtown rents as critical to supporting a workforce employed by downtown businesses.

“My long-range goal is for us to have a thriving town, a diverse town, diverse in businesses and diverse in people. That’s been my mindset for the 30-odd years I’ve been doing this,” Stanley said. “I hope that [Rasch] will consider the overall benefit to the town about being able to have people living in apartments that are working in town and don’t put additional pressure on the small businesses to survive.”

Rasch appears to be looking for more downtown projects in Great Barrington’s “supply-constrained market”— even when the properties are not for sale.

According to reporting by The Berkshire Eagle last year, Rasch approached Berkshire Community College (BCC) with an unsolicited offer to purchase its building at 343 Main Street. That $1.45 million purchase is now a $5.25 million redevelopment project that, when completed next year, will rent space back to BCC and to other tenants including Community Health Programs, Volunteers in Medicine, and Sustainable Food Lab Berkshires.

Great Barrington voters last month approved a $250,000 grant from the town’s Community Preservation Act funds to Rasch’s Alander Group to cover costs associated with restoring the building’s Main Street façade.

Stanley told me that Rasch also approached him in the past year with an offer to purchase 40 Railroad Street, the building he owns on the north side of the street and where Alander Group rents office space. Other tenants include CDCSB, AJA Risk Management Consultants, Baba Louie’s Pizza, the Southern Berkshire Chamber of Commerce, JWS Art Supplies, and others.

But Stanley said he has no plans to sell his five Great Barrington properties individually, only in a single sale. Rasch did not make that offer, he said.

Victor-Pieczarka declined to answer questions about the genesis of the pending deal for the Mahaiwe Block, including whether Rasch approached her with an unsolicited offer.

With a focus on acquiring existing downtown buildings for renovation and rental, it’s possible that Rasch and his partners and investors are still smarting from their failed 2018 effort to build a much-needed residential complex of 45 apartments on Manville Street. However necessary and worthy, those new-construction projects that create new rental inventory can face myriad challenges and risks, from securing funding, to navigating local permitting and securing board approvals, to finding available contractors, to opposition and legal fights launched by nearby residents.

That last risk was ultimately what derailed the Manville Street project. Complaints and legal action by neighbors and a court decision on a technical land-use issue that went against the developers led them to abandon the project in 2020.

Pedro Pachano, a Planning Board member who until this week also chaired the joint Selectboard-Planning Board housing subcommittee charged with developing ideas to address housing issues, told me that the failure of Rasch and Nickerson’s project on Manville Street added to the challenge of building much-needed housing in Great Barrington.

“What people don’t realize is that these guys who are in that business will find a way to do business,” he said. “So if you want them to take over existing buildings and convert them and do what you’re speculating they may do here, then that’s what’s going to happen when you challenge the construction of new buildings.”

Pachano’s architectural firm, Pachano & Vollert Architecture, has rented an office on the second floor of the Mahaiwe Block for about four years, he said, but he hasn’t been notified of any sale. He told me that he’s seen one of Rasch’s Alander colleagues in the building but that no details of a pending deal, or plans for the building, were shared.

A look at Alander Group’s other projects may provide some insight into what made the Mahaiwe Block an attractive acquisition. A 2017 presentation prepared by Rasch, Great Barrington Town Planner Chris Rembold, and two others for a Pittsfield gathering of the Massachusetts Association of Planning Directors, titled “Financing Small Mixed-Use Projects: A Case Study of 47 Railroad Street,” described Rasch’s approach to development.

In one section titled “Sources of Funds,” it says, “Equity: Your cash (or preferably someone else’s) maybe a grant (investors need a return for their money).” And in a section called “The Developer’s Perspective” under “Things that make it feasible” Rasch listed, “Building was 75 percent vacant at purchase,” “GB is a high rent market,” and “100 percent market rate.”

In 2018, just prior to the completion of 47 Railroad, Rasch told the New York Times for a story about second homes in the Berkshires that his new apartments were renting for between $1,900 and $3,500 per month. He also said he had a 49-person waiting list, and that “probably 65 to 70 percent are New York City people.”

A few days later he told the Berkshire Eagle, “We get calls from people willing to pay a lot.” It’s unclear how many of the development’s 13 apartments are currently rented to full-time Great Barrington residents.

The presentation to the planning directors also included a 10-year pro-forma operating and income statement for the project. Using estimates made prior to the pandemic-era run-up in local real-estate values and rents, the document projects that a sale of the property in 2028 would net the development group $4.4 million after taxes.

Those strategies and numbers reflect how market demand and an experienced developer led to a successful and lucrative construction project. And it’s unquestionably one that’s infused new energy at the top of Railroad Street, with a thoughtful and effective exterior design that reflects the aesthetics of older downtown buildings. The brick patio has become a popular new downtown meeting place around a restaurant, café, and innovative bookstore.

The Mahaiwe Block was completed in 1905, replacing buildings on the corner of Main Street and Castle Street that were destroyed by a 1901 fire. Photo by Bill Shein.

But it does raise questions for town officials and the community, particularly when it comes to conversion of existing downtown housing: Will largely unrestrained and unguided market forces mean that housing development for full-time residents, particularly those with low and average incomes, will now be pushed to the outskirts of town? How will that impact the fabric of downtown? And is there enough focus on addressing the lack of adequate public transportation to bring those workers downtown, particularly in light of ongoing, housing-related staffing challenges faced by many local businesses?

Both Pachano and Jane Ralph, executive director of local nonprofit Construct, Inc., which builds, manages, and provides services related to affordable housing, told me that expanded inventory of some higher-rent apartments could potentially free up less-expensive units as those willing to pay a little more in rent move up to nicer housing.

Yet that only applies with the creation of new housing inventory. It’s far less helpful when those higher-rent apartments replace less-expensive ones, as may happen at Mahaiwe Block. That speaks to the challenge of incentivizing developers like Rasch, Nickerson, and others to see financial opportunity in expanding housing inventory rather than just converting it to meet upscale-market demand, some of which is from those seeking second homes.

Pachano, meanwhile, has long expressed frustration that substantial state and federal funding for new-housing development has not been forthcoming, and that, in general, housing challenges are not being met by policymakers at all levels with the urgency required.

He’s been an advocate for streamlining the approval process for new construction to simplify and reduce the cost of developers’ engagement with town boards. That’s something that developers like Rasch, Nickerson, and Stanley have proposed for years, and finding the right balance between their interests and the community’s may be a prerequisite to accelerating the construction of new multi-family housing.

But for now? “A developer will obviously try to get as much money as he can. That’s just the way it works. Is there a strategy for dealing with rents? No, there isn’t,” Pachano said with some frustration.

Rasch has another project in the works that seems quite different but in the end may be another example of market forces responding to those with more dollars to spend.

As reported by The Edge in February, shortly after his purchase of the Prospect Lake Park campground, longtime seasonal residents of the park were told to remove their campers and belongings and that the park would close for the 2022 season for “necessary improvements to the facilities,” promising “a better and improved campground in 2023.”

It remains unclear if the campground will remain an affordable summer option for families who, for decades, rented spaces from May into October, or if it will be transformed into an upscale “glamping” resort as former park residents told The Edge they suspect. Or if the property will become something else entirely.

Rasch has not revealed any specific plans other than some vague suggestions in a January 31 letter from his lawyer, Peter L. Puciloski, to former park residents. It said upgrades were needed to the property’s electrical system in advance of what Puciloski promised would be “significant improvements to the facilities.” The letter also advised “the camp will not be able to open until after the improvements to the electrical system are completed.”

At this point, it appears that work on those improvements hasn’t yet started. Egremont Building Inspector Ned Baldwin told me this week that no building permits for any type of work at the property have been sought or granted so far in 2022. “Work at any level, except for the most minor repairs, would require a building permit,” he said in an email.

Ultimately, the next chapter in the long history of the Mahaiwe Block will be written at a moment of high housing and construction costs, insufficient rental inventory, contractors booked out for several years, a zero-percent rental-vacancy rate, and when market forces and private-equity investors are steamrolling through the rental market—both here and across the country.

That’s likely to mean a continuing reduction in the economic diversity of those who live in downtown buildings—unless there are policies and incentives put in place to preserve it. Indeed, the Mahaiwe Block is one of just a few downtown buildings that is visible from most windows in Great Barrington Town Hall, a place where housing policy that finds a constructive balance of incentives and zoning regulations could, just possibly, be crafted.

According to historian Bernard Drew’s encyclopedic, “Great Barrington: Great Town, Great History,” the top floor of the Mahaiwe Block—where a mix of local residents currently wait for more news with apprehension and unease—was initially a performance space called Mahaiwe Hall. It was closed in 1910, five years after the building opened, and was converted into small residential apartments.

Why? Because of something that will sound awfully familiar, but to our neighbors at the corner of Castle and Main, not-at-all comforting: “Market demand.”

Bill Shein writes a regular column for The Edge.

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