Kollmorgen Puts King Street Parcel on the Block

The day after Kollmorgen listed its 5-acre King Street parcel for $4 million, the U.S. Defense Department announced it had awarded the Electro-Optical Division a $41.2 million contract for a new generation of submarine masts.

 
NORTHAMPTON – Sixty years ago last month, the Kollmorgen Realty Corp. bought a 5-acre parcel on King Street for for $1 “and other valuable considerations” from the Boston & Maine Railroad. Last week, the company put the property on the commercial real estate market for $4 million. (To see the original deed, click here.)

The parcel now houses the Kollmorgen Corporation’s Electro-Optical Division, which plans to relocate its offices and manufacturing operations to 13.6-acre parcel off Route 66, on the site of the former Northampton State Hospital.

In 2009, the parent Kollmorgen Corporation bought the new headquarters for $1.65 million, and is reportedly spending $18 million on construction that is nearly done. (To see the complicated deed, click here.) The new facility at Hospital Hill contains about 150,000 square feet of modern manufacturing and office space, and plenty of room for the division’s approximately 390-person workforce.

Last Tuesday’s listing of the King Street property – where the company makes periscopes, optical and imaging equipment for the U.S. Navy and other countries – came one day before the U.S. Department of Defense made a major announcement that signals good times ahead for the 195-year-old company.

On Dec. 29, the U.S. Naval Sea Systems Command in Washington, D.C. announced it had awarded Kollmorgen’s Electro-Optical Division a $41.2 million contract to build eight new photonic mast systems for Virginia-class submarines. The new masts, unlike traditional periscopes, are non-hull penetrating communication and imaging devises that are expected to provide U.S. submarines with a powerful new generation of offensive and defensive capabilities.

The award is so new that even the company’s own website hasn’t announced the contract yet.

But, according to published industry reports, the Kollmorgen submarine mast contract allows for spare masts and additional engineering that could boost the contract value to more than $123 million over the next decade. (See “Kollmorgen Wins $41M for photonics mast contract.”)

In 1951, The Kollmorgen Realty Corp. turned around and sold its newly acquired King Street parcel to a new division of its own company, The Kollmorgen Optical Corp., for $100 and other considerations. Looking back, it seems like a good move. (To see the original deed, signed by company president E.O. Kollmorgen and notarized by local notable Edwin P. Dunphy, click here.)

Kollmorgen officials were not available over the weekend for comment.

Realtor Pat Goggins said the value of Kollmorgen's King Street parcel is in the location, not the old building. (Photo from Pat Goggins)

Marketing the King Street Property

Northampton Realtor Patrick Goggins, Kollmorgen’s broker for its King Street property, said the parcel’s value is more in its prime location – at the intersection of Routes 5 and 10 and Interstate 91 – than in its existing building. “It’s got a totally useless building,” said Goggins, president of Goggins Real Estate.

According to the property listing, the industrially zoned parcel sits on 5.12 acres, sports 60,000 square feet of office and 35,000 square feet of manufacturing space, 99 parking spots, two loading docks and eight bathrooms. The city assesses the land at $2.25 million and the two-story building at $821,000, for a total of $3.075 million.

“Site has tremendous retail potential,” the listing states: “5.1 acres at Route 91 Interchange Gateway to Northampton. High Traffic count. City considering new zoning options. Potential for assemblage of other parcels.”

Goggins said potential buyers would include shopping center developers and hotels. He said the parcel is too small for a big-box retailer, but said some synergy is possible with the adjacent Hill and Dale shopping center, 6.7-acre parcel to the south.

In 2007, the Connecticut-based Colvest Group bought the Hill and Dale parcel for $5.3 million through its Colvest Northampton LLC; in September, the city Planning Board approved a site plan for the former Price Chopper site. At the time, Frank Colaccino, president of Colvest and manager of Colvest Northampton, told Northampton Media his plan was to renovate the old building and attract five or six “quality” retail tenants. (See “Hill and Dale Site Plan OK’ed.”)

Whether the two sites combine to make one mega-parcel at the top of King Street, or whether their separate plans move ahead independently, cannot now be known. And as the regional economy becomes healthier, of course, more potential uses for the site will present themselves, Goggins said.

The fact that two sizable chunks of developable land on the city’s main commercial strip are surfacing at the same time that the Chamber of Commerce is pushing for more business-friendly zoning is hardly a coincidence. That rezoning package will undergo approvals by the Planning Board and CIty Council.

Goggins, who is also co-broker for Kollmorgen’s Route 66 property, said the King Street parcel’s appearance onto the commercial market listings is a big deal.

“It’s something the city’s really been aware of and anticipating for a long time,” he said.

(For a brief financial history of Kollmorgen, click here.)

© 2010 Northampton Media             

David Reid can be reached at dreid@northamptonmedia.com