'Stunned': WPI Takeover Of Worcester Hotels Angers City, Business Leaders

WORCESTER, MA — Local municipal and business leaders are outraged over Worcester Polytechnic Institute's plans to take over two hotels in the Gateway Park area, saying the school is undermining an ongoing effort to redevelop the lower Grover Street area by removing key properties from the tax rolls.

Local officials in a recent letter to WPI said they were "collectively stunned" by the school's plan to acquire the Courtyard Marriott and the Hampton Inn to turn into student housing. The move would wipe out $1.6 million in annual property and hotel tax revenues for the area, and drastically reduce hotel capacity in the downtown area.

WPI earlier this summer applied to borrow about $26 million from the Massachusetts Development Finance Agency to convert the Hampton Inn at 65 Prescott St. into student housing. The agency approved the bond issuance at a meeting in early August. The college wants to do the same with the Courtyard Marriott, which abuts the Hampton Inn but is located along Grove Street.

In a letter sent to WPI leaders last week, City Manager Eric Batista, Mayor Joseph Petty, Worcester Chamber President Timothy Murray and Worcester Business Development Corp. President Craig Blais said the plan would derail an effort to grow the Gateway Park area into akin to the Kendall Square area of Cambridge.

"The Gateway Park Project was never at any point about utilizing public resources to solely facilitate WPI’s campus expansion or student housing needs, taking property off of the city’s tax rolls, and further burdening Worcester’s residential and commercial industrial taxpayers," the letter said.

"This would devastate the City and region's ability to attract and host conventions, events, and tournaments, which would be detrimental to the DCU Center, Polar Park, and other travel and tourism-related venues in the city and result in the loss of approximately 100 jobs at the two hotels. Further, it deviates from the public purpose for which taxpayer grant funding was invested to support the development of Gateway Park," the letter said.

Although already in motion, Murray said Monday the plans will likely face continued opposition from local leaders, including scrutiny of WPI's application for state bonds. WPI's plan is also galling, Murray said, given the millions in public tax breaks and subsidies that went into the Gateway Park project.

The $10 million Hampton Inn was first proposed in 2013 as part of a dual project by a developer that also built the Marriott in downtown Worcester as part of City Square. The city council in December 2013 signed off on a seven-year tax increment financing agreement that allowed the Hampton Inn property owner to save a total of $806,000 in property tax payments. The TIF went into effect in 2016 and expired in June 2023. In 2013, District 3 Councilor George Russell negotiated a clause in the TIF that said the property must be owned by a for-profit entity for 14 years.

WPI did not respond to multiple requests for comment about the project, including about whether the property would remain on the tax rolls. The Hampton Inn generated about $300,000 in property taxes in fiscal year 2023. Projections in 2013 said the property would generate close to $350,000 per year after the expiration of the TIF.

According to the bond document published by the state, the new student housing would be operated by a company called His Prescott Street LLC, whose address is the same as the main WPI campus and whose executor is Michael Horan, WPI's chief financial officer.

County records show that the developer sold the Hampton Inn in 2017 and the Courtyard Marriott in 2018 to a company called BREIT Mass Property Owner LLC. That company is a subsidiary of the investment giant Blackstone, which oversees about $1 trillion in investment assets ranging from real estate to energy companies.

The Gateway Park redevelopment got underway in 2010, but still includes wide open parcels near in between Lincoln and Grove streets. WPI floated a plan in 2022 to fill one of those parcels with new lab space, but the project has been called off.