North Shore River Corridor Plan Market Summary6.1North River Canal Corridor
Market Summary
prepared by FXM Associates
6.2 North River Canal Corridor
Introduction
In order to provide a context for planning within
the North Canal Neighborhood Corridor, the
consultant team researched population demo-
graphics, general market conditions for various
types of residential and commercial develop-
ment, and potential of certain buildings for
redevelopment. This economic research has
provided a context for plan recommendations
described later in the master plan.
FXM Associates determined general market
conditions by analyzing relevant secondary
source data on population and business char-
acteristics, interviewing local real estate bro-
kers and property managers, and by research-
ing assessor’s records and property listings for
sale or rent in the city and the neighborhood.
This review should not be considered as a full
market analysis, but as a guide to suggest the
most appropriate general land uses. The
analysis was undertaken in conjunction with
other aspects of the planning process. The
information included in this market summary
was used as background for discussion during
the planning process. None of the information
included in this section reflects the views of
the Working Group.
General Population and
Business Characteristics
Demographic characteristics such as age,
income, marital status and level of education
tend to influence preferences in type of hous-
ing, retail outlets and employment. The type
of land uses that will be recommended by the
plan should be guided by the needs and
desires of existing neighborhood residents.
Except in the cases of neighborhood gentrifica-
tion or massive redevelopment, planners
should anticipate that new residents moving
into the area will exhibit similar demographic
characteristics as the existing population.
Study Area Demographics
An estimated 868 persons live in 416 dwelling
units located in the study area. The median age
of this population is 38 and more than half are
not married. One-person households account
for 43% of total, and two-person households
comprise 31%. Average household size is 2.08,
and more than half are non-family households.
Average household size is smaller than in Salem
as a whole, median age is similar to that of the
total Salem city population, while the proportion
of non-family households is considerably higher
(53%) than the city-wide average (44%). These
characteristics suggests a more independent and
mobile adult population than in the city overall,
and one that is likely to prefer condominiums or
rental apartments to single-family housing.
Interviews with local brokers confirm this obser-
vation for this neighborhood.
One-third of this group hold college degrees and
20 percent did not finish high school, similar to
statewide statistics for adults over 25 and for the
city of Salem overall. Per capita income is esti-
mated to be $37,000 in 2002; median house-
hold income is $51,000 and average household
income is over $76,000. The large disparity
between median and average household income
indicates that there are a number of relatively
higher income households within the study
area. Median household income within the
study area is 16% higher than citywide median
household income ($44,000), and per capita
income in the study area is 55% higher than in
Salem overall ($24,000).
An estimated 42% of the households in this area
are owner-occupied, with 58% renter occupied.
Estimated median value of owner-occupied
housing is $232,432 in 2002. Approximately
one-fourth of the units are within single-family
detached houses, 28% of the units are contained
in duplexes, and 39% of the units are located
within buildings containing 3 to 19 units. Less
6.3North River Canal Corridor
1 Source: Claritas, Inc. Site Reports
2 Op. cit., Claritas, Inc.
than five percent are larger than 19 units.
Three-quarters of the housing in this area was
built before 1940. These figures also indicate
that a planning decision to encourage develop-
ment of residential condominiums on proper-
ties that abut the existing residential area would
not be out of character with the neighborhood as
long as building size, massing and design were
also compatible with existing development.
There are 109 businesses located within the
study area, employing 845 persons and grossing
an estimated $87 million in annual sales.
Twenty of these businesses are manufacturers,
five of which employ 20 or more workers.
Eighteen are retail, employing 162 workers.
plans for this corridor.
General Real Estate Market Conditions
Rental Apartment Market
The apartment rental market in this area
appears to be remarkably strong, but may be
temporarily saturated by the Jefferson at Salem
Station development located immediately east of
the study area. This development offers 236 one
and two bedroom units and 30 townhouses of
815 to 1,538 square feet that rent for $1,275 to
$2,085 per month. In the 12 months since
opening, 155 units, or 58% of total, have rented.
Surprisingly, management estimates only five
percent of tenants work in Boston, with most
working in the Route 128 and 95 corridors.
Residential Condominium Market
The demographics of the study area popula-
tion indicate the strong presence of single-per-
son households with relatively high incomes.
While more than half are renters, the age and
income characteristics indicate that this group
is a primary market for residential condomini-
ums. Brokers interviewed by FXM confirm
that the condominium market in Salem is
brisk, with many first time buyers. They
report that buyers often move from Boston,
Cambridge and Somerville. They say that buy-
ers typically want two-bedroom units of 1,000
square feet or larger, and that they look for
“charm”, which includes fireplaces, traditional
design, courtyards or decks, and off-street
parking.
There are currently close to 100 units available
in Salem, ranging in price from $100,000 to
$570,000. Most units are conversions of
older buildings, and range in size from 550 to
2,700 square feet. In the past 12 months 93
two-bedroom townhouse or row house condo-
miniums sold in Salem. Average time on the
market was 37 days. Actual sale prices ranged
from $196,000 to $370,000 and averaged
$283,975.5 There appears to be little product
available for high quality new construction in
this neighborhood, although market demo-
graphics indicate a strong potential for such
units may exist.
Single-Family Dwelling Market
The market for single-family dwellings
remains strong in Salem, as well as in the rest
of the Boston metropolitan area. There is the
opportunity within the study area for single
family custom homes to built on limited sites,
however, the general market would indicate
that there is a preference for the development
of multi-family units.
Office Market
There appears to be surplus capacity in office
properties in Salem generally and in the study
area in particular. This situation could change
in the future, especially if the North River canal
and park is developed into a more desirable loca-
tion to live and work. There are currently more
than 70 office properties for rent or sale in
6.4 North River Canal Corridor
3 Source: Claritas, Inc. Site Reports
4 ibid.
5 Source: Multiple Listing Service
Salem, ranging in size from 200 to 75,000
square feet. Within the study area there is a
recently rehabbed office building on Mason
Street with 6,300 square feet available for rent.
Commercial Market Characteristics
To test the market potential for commercial
development at the intersection of Boston and
Bridge Streets, FXM examined the demographic
data and retail trade potential for the area within
a two-minute drive time of the site. This exami-
nation found approximately 15,500 persons liv-
ing in 6,800 households in this area. Median
age of all residents is 38 years and approximately
half are married. About 28% have college
degrees and 22% did not finish high school.
Average household size is 2.24 persons. More
than half are family households.
Per capita income in this area is estimated to be
$28,885 in 2002; median household income is
$51,092 and average household income is
$64,221. Approximately 35% of the households
are single person; two thirds of the households
are one or two person in size. About 46% of the
dwellings are owner-occupied, with 54% renter-
occupied. Median owner-occupied housing
value is $232,276. An estimated 28% are single-
family detached, 24% are duplexes and 32%
have between 3 and 19 units in the building.
About 62% were built before 1940.
Total retail spending by households living within
this two-minute drive time is estimated to be in
excess of $205 million, approximately equal to
the $203 million in gross sales experienced by
the 300 retail establishments in the area.6 A clo-
sure examination of resident spending potential
and current establishment sales within this area
indicates that establishments selling building
materials, household furnishings, and eating
and drinking establishments are now capturing
considerable sales from outside the local market
area. This excess of sales compared to local
market potential may suggest opportunities to
build on competitive clusters, particularly with
eating and drinking establishments. Sales at
general merchandise establishments, grocery
stores, and apparel stores within the two-minute
market area, are, by contrast, considerably below
local market potential. This indicates that local
residents are now spending for these retail pur-
chases at establishments outside the two-minute
drive time of the study area. There may be an
opportunity for new stores within the study area
to capture some of this “leakage”.
Hotel Market
Hotel development is not likely to be feasible
within the study area. Current plans for devel-
opment of a new downtown hotel will meet like-
ly demand for hotel rooms for the foreseeable
future.
Building Reuse Observations
F.W. Webb Building
The F.W. Webb building is a five-story brick
warehouse occupied by a plumbing supply
wholesaler. It appears from the outside to be
structurally sound, with straight roof and win-
dow lines, and no apparent structural cracking
in the brick walls. Relatively new replacement
windows indicate the likelihood of good mainte-
nance elsewhere. The size, massing, and loca-
tion of this building make it a strong candidate
for conversion to loft-style dwellings, either
rental or condominium, with adequate room for
on-site parking. This type of housing typically
requires minimum interior partitioning and
appeals to artists as work/living space.
Flyn-Tan Building
This former tannery appears from the outside to
have little if any potential for redevelopment.
Sagging roof and window lines indicate poor
6.5North River Canal Corridor
6 Op. cit., Claritas, Inc.
structural integrity. Asbestos shingles on the
exterior would be extremely expensive to remove
and suggest the presence of additional asbestos
inside. The City should proceed with its plans
to clear and clean this site for future redevelop-
ment. Its location, abutting residential, retail
and industrial uses, as well as both Mack and
Canal parks, lends itself to reuse for office, labo-
ratory, manufacturing, retail or residential use.
Salem Suede
The brick lower section of this building may
have some potential for redevelopment into
office or industrial use. The remainder of the
structure suffers the same deficiencies as the
Flyn-Tan building, however, with sagging roof
and window lines and asbestos (Transite board)
siding under the aluminum or vinyl clapboards.
This building also blocks the future extension of
Commercial Street to Flint Street. As with the
Flyn-Tan building, redevelopment of this proper-
ty represents a key step in enhancing the charac-
ter of the area.
Planning Suggestions
Rehabilitation of Existing Buildings Compared
to New Construction
While detailed comparisons of revenue potential
and construction versus rehabilitation costs have
not been made as part of this market overview, a
cautionary note must be stated for certain types
of market uses being considered by study partic-
ipants. There is a strong desire to encourage
artist live/work space, and possibly related retail-
ing. Such uses would be appropriate to the
diverse character of the neighborhood, and may
represent an opportunity to establish a competi-
tive market niche and destination for the study
area. The relatively favorable market prospects
for rental and condominium housing appear
supportive in this regard, as do opportunities for
specialty retail sales. However, the rents or pur-
chase prices that typically accompany artist
live/work/retail space are not likely to support
new construction. The selective and careful
rehabilitation of existing structures may be more
likely to yield competitive rental and purchase
opportunities for the artist-related submarket.
Park
Canal Park appears to be underutilized. It also
appears to lack a sense of purpose and needs
better connections to the surrounding neighbor-
hoods. If the park and its surrounding residen-
tial neighborhoods were better connected, and if
the canal were improved as an amenity, the
canal and park could serve as a catalyst for rede-
velopment of the entire study area.
Bridge Street
There are several small commercial properties
along Bridge Street. Most of these are single-
story buildings housing automotive repair or
parts businesses, and are assessed for less than
$300,000. These properties could support two
or three story residential structures, housing
four units each, with a combined value of
$800,000 to $1 million. Even with the adjust-
ment for difference in tax rates, replacing the
small commercial uses with more valuable resi-
dential units, and building out vacant parcels,
could substantially increase the City’s tax rev-
enue from this neighborhood.
If Bridge Street is rebuilt, it should be designed
as a parkway, which could still serve as a connec-
tor with adequate capacity, but be more compati-
ble in design with residential uses. Several
pedestrian overpasses could connect the residen-
tial neighborhood with the park and canal.
Sidewalks should be improved on both sides of
the street.
6.6 North River Canal Corridor
Commercial Street
Commercial Street serves primarily as access to
the abutting industrial uses. Commercial Street
should be connected to either Flint Street or
Mason Street to enable better access to the prop-
erties that front along Mason Street and to the
park. Its primary purposes would remain access
to the park and to parking and loading areas at
the rear of Mason Street properties.
Boston at Bridge Site
The vacant parcel at the southeasterly corner of
the intersection of Boston and Bridge Streets
appears to be ideally located, from a market per-
spective, for a neighborhood center of retail and
service office uses, such as neighborhood gro-
cery, convenience, bakery/deli, grooming shops,
dentists, lawyers, accountants and other service
businesses. This type of development should
not be extended along Bridge Street, however,
but concentrated at the intersection, with ade-
quate off-street parking located behind the build-
ings. Although the neighborhood appears to
have adequate retail businesses, this site might
be suitable for consolidation of existing retail
and service shops, as well as for stores and serv-
ices that are not currently available in the neigh-
borhood.
6.7North River Canal Corridor
6.8 North River Canal Corridor