🔒With highest-ever occupancy rate, Manchester’s Hilliard Mills office park eyes final redevelopment stage

After the COVID-19 pandemic hit, the Hilliard Mills business office park in Manchester lost about 15% of its tenants.

Now, the redeveloped former historic woolen mill site has its highest occupancy rate ever (at 92.4%), with just a few vacancies scattered around 55 small business tenants, according to the property’s owner.

Between photographers, small manufacturers, a sound-recording studio, dog groomer, and a future distillery, Hilliard Mills is home to a diverse mix of tenants largely occupying small office suites. The 5-acre property houses six buildings, five of which are currently operational with 96,000 square feet of usable space.

“We’re the most full that we’ve ever been right now, by far,” said Peter Bonzani Jr., owner and manager of Hilliard Mills, which he bought and began to redevelop about 17 years ago. “Like other commercial property owners, the second quarter of 2020 was pretty rough, but what was fortunate for us was that we had a waiting list at that point, so we were able to backfill a few spaces.”

Now, Bonzani is preparing to renovate the last of six buildings on the property, which will add 10,000 square feet of space for small businesses and events.

Bonzani, and town officials, hope the property continues to be an example of how to modernize old buildings while preserving their historic significance.

Commercial tenant focus

The Hilliard Mills property is listed on the state’s Register of Historic Places. It dates back to the 1600s, when John Allyn was granted land to build a sawmill on-site.

Over time, it expanded and had various uses, including as a furniture manufacturer.

Bonzani bought the property’s six buildings between 2006 and 2009, and has spent more than $8 million between land purchases and renovations, he said. State loans and financing from Chelsea Groton Bank have supported redevelopment efforts.

A popular, modern use for old mill buildings in the state has been renovating them into apartments or condominiums, but Bonzani’s development doesn’t have a residential component. It’s strictly occupied by commercial businesses.

One of the first companies on the property was Bonzani’s own engineering firm.

“We’ve spent the last 17 years renovating and improving the site for small businesses,” Bonzani said. “We do no residential here whatsoever. I’m a small business guy myself.”

Manchester Director of Planning and Economic Development Gary Anderson said the town has a long history of rehabilitating old buildings, particularly mills.

“Taking on a project like that is not easy, so the fact that Peter has done what he’s done there is really impressive and unusual,” Anderson said. “He’s been able to put the pieces together and figure them out — he’s faced structural and environmental issues and all sorts of challenges, so to be able to navigate that is really amazing when you think about it.”

Bonzani said a “delicate balance” is needed when restoring a historic property. The building must meet modern safety standards without removing the structure’s original charm.

“Some people just take the route of gutting them and redoing them completely over, but that’s not how we do it,” Bonzani said. “We like to keep as much of the original structure and details as we can, while meeting today’s building codes, which is important to us.”

The town has worked with the property over the years to support new business. The Manchester Planning and Zoning Commission in August, for example, approved new zoning regulations that will allow Eighth District Distilling Co. to open a 1,000-square-foot distillery in Building 3, sometime next year.

“It’s a unique property and something I think we want more people to know about,” Anderson said.

Small space demand

While the pandemic has hampered the office market in general, landlords of small office or coworking spaces have said they are seeing relatively strong demand.

Most of the offices available in Hilliard Mills average between 350 and 500 square feet, though there are some larger spaces.

“We’ve seen a very big trend, especially since COVID, for smaller office spaces, which we’ve always catered to here,” Bonzani said. “That’s been our bread and butter, but even more so since (the pandemic), we’ve seen a demand for spaces of less than 500 square feet.”

Of the 55 businesses that occupy space in Hilliard Mills, about 76% are women owned, Bonzani said. Tenants include therapists, artists, a craft brewery and even small makers of soup, tea and pillows.

The brewer, 2nd Bridge Brewing Co., has been leasing at Hilliard Mills since 2016. Founder and owner Steven White said the property is the perfect fit for his English football pub-style craft brewery and bar.

“Us football people … are a different breed, and it meant a lot for me to try and create an environment that gave you that kind of English pub type of feel,” White said.

Building 6

In collaboration with the State Historic Preservation Office, Bonzani is getting ready to restore the 10,000-square-foot Building 6. It’s the last remaining untouched property on-site.

He said he’s still finalizing paperwork for the state’s historic tax credit program to see what project funding is available, but expects work to begin sometime next year and to cost just under $1 million.

“There’s a lot of upfront work you have to do with these types of projects,” Bonzani said. “Building 6 is like 180 years old … so you’ve got to make sure that the buildings, both from an engineering standpoint and code standpoint, are compliant.”

Bonzani said he imagines Building 6 will include a mix of small business offices and event space. Building 4 already has space for weddings, baby showers, corporate and other types of events.

White, the brewer, said he’s seen Bonzani grow the property from just a dozen or so occupants to more than 50 today.

“This guy is really taking on a massive project, and it’s only getting closer and closer to absolute fruition,” White said.