Published: 4/29/2020 6:21:38 AM
ATHOL – Athol Town Manager Shaun Suhoski confirmed in an interview Monday that the former Union Twist Drill campus, now the home of MassGrow Athol, has been sold to a San Diego investment trust for a reported $26.8 million.
Innovative Industrial Properties is a publicly traded company which, according to published reports, provides real estate capital to medical-use marijuana businesses.
According to the online industry newsletter New Cannabis Ventures, in addition to the nearly $27 million purchase price, Innovative Industrial Properties has agreed to reimburse MassGrow’s parent company, Ascend Wellness Holdings of Cambridge, for up to $22.2 million in planned improvements to the former industrial property. This would bring the San Diego company’s total investment in the facility to $49 million.
The newsletter further states MassGrow will pay rent equal to 13.5 percent “of the sum of the initial purchase price and tenant improvement allowance.” The rental amount will be phased in over time.
Suhoski said he spoke to MassGrow CEO Andrea Cabral shortly after catching wind of the deal in early April.
“Essentially,” said Suhoski, “it’s a sale of the real property to a real estate investment trust. MassGrow wants to cultivate and manufacture cannabis, not to own real estate. I’m sure they have their own business model reasons for moving the real estate to a different entity. My understanding is it’s as simple as that.
“MassGrow will lease the facility — they are leasing the facility. They’re continuing operations; they’re ramping up. Andrea is still in charge. With the COVID-19 ramping up, she told me about some of the modifications to their operations being made to follow best practices.”
Suhoski said the sale has no effect on any agreements made between MassGrow and the town.
“The host community agreement remains with the marijuana enterprise,” he said. “So, MassGrow is still there and still operating, but the agreement would be binding on any successors in any event.”
The sale, along with continuing improvements to the property, is likely to translate into more revenue going into town coffers.
“I forwarded the information to the assessor (Lisa Aldrich),” said Suhoski, “although she would get the record anyway because they keep up on all those transactions. So, I’m not sure we have an exact calculation because the actual assessed value doesn’t always correspond directly to a sale price or planned investment value. But certainly, the value is going up, so that’s a good thing. But I don’t have a number on that just yet.”
The cannabis grown at MassGrow Athol supplies Ascend's medical and retail pot shops in Cambridge and Boston.
The Union Twist Drill site at 134 Chestnut Hill Ave. sat vacant for nearly three decades before Ascend bought the property for $1.2 million in 2018. The MassGrow operation, which plans to eventually employ up to 150 people, occupies about 200,000 square feet of the old factory building.
Union Twist Drill, which manufactured industrial grinding tools, was founded in 1905. In 1964, company shareholders voted to change the name to UTD Corporation. The company, once Athol’s second-largest employer, closed its doors in the early 1980s.
Greg Vine can be reached at gvineadn@gmail.com.