Office space cut in redesign of development in Newton

Northland Investment Corp. is set to refile plans for a 23-acre site on Needham Street, eliminating office space and scaling back square footage

By Jon Chesto, Globe Staff

The pandemic-weakened office market has prompted a makeover for Newton’s largest development.

Rather than including offices in its plans for the former Marshalls plaza and an old mill complex next door on Needham Street in Newton Upper Falls, developer Northland Investment Corp. has decided to focus on the other two main elements of its project: hundreds of apartments and ground-floor retail space.

Northland now wants to build 100 apartments within the empty mill building instead of renovating it into 193,000 square feet of offices. As a result, Northland would remove five of the 15 new buildings it has planned for the 23-acre site near the city’s southern border, shrink two other buildings, and cut back on parking.

The project, should it be approved by the Newton City Council, would drop in size by about 10 percent from its originally proposed 1.4 million square feet. The total number of apartments wouldn’t change much — it would rise from 800 to 822, including 144 affordable units — and the total retail and restaurant space would remain unchanged at 100,000 square feet. Parking, meanwhile, would drop by about 300 spaces to 1,050 spaces. And Northland would drop plans for a shuttle to the Newton Highlands stop on the Green Line, about a mile away, because the demand would fall considerably without office workers coming to and from the site every day.

The developer plans to share the changes with community members at a meeting next week, said Peter Standish, a senior vice president at Northland. After that, Northland will file a request with the City Council to adjust the special permit that had originally been approved for the site.

That permit was approved by the Newton City Council in late 2019 after a contentious debate about the project’s impact, particularly on traffic in the area. Opponents challenged that decision, forcing a citywide referendum. Most voters ended up supporting the plan, but that referendum took place in March 2020, just a week before the arrival of COVID-19 prompted massive shutdowns — and longer-term shifts in commercial real estate.

While the redesign represents a significant drop in weekday traffic at the site, the need to return to the City Council could reopen a controversy that divided the city more than four years ago. The project had the support of Mayor Ruthanne Fuller and the business community in the first go-around, but Northland also faced a well-organized opposition.

Since that time, Northland has invested $73 million in designs and infrastructure work such as unearthing foundations for long-gone sections of the mill complex, installing a new drainage system, and starting work on a spray park and playground. The company also took the temperature of the office market and concluded that converting the mill complex to apartments would be a smarter financial move.

The end result, Standish said, is a better project.

“It allows us to move forward right away on this and really be able to start delivering critically needed housing,’’ Standish said. “At the same time, it allows us to reduce the traffic impact of the project, with the elimination of offices. I think that’s a real benefit to the community.’’

Standish expects the first residents would be able to start moving into apartments within 30 months of the City Council approval. He said Northland does not have financing yet but does not expect that would be an issue that would get in the way of construction.

Greg Reibman, president of the Charles River Regional Chamber, said he was disappointed to learn about the change of plans. He once thought the chamber might move into the mill building someday. But Reibman understands that the office market dynamics have changed dramatically since those early days.

“I totally understand why they’re doing it,’’ Reibman said. “The good news is this is still a transformative project for Newton and for the region. It’s a great upside for the housing shortage. … The reality is, they’re basically taking a contaminated heat island and turning it into a new neighborhood.’’