Unlocking the Krocks, Part Four – The Next Generation

This evening, the Historical Commission will consider a demolition delay waiver for the Central Building, 332 Main Street, one of the many properties owned by the Krock family in downtown Worcester.

The Krocks’ lawyer, Gary Brackett, should be bringing detailed information about the costs to maintain the building and the financial situation of the owners, as the commission has requested.

Central Building

This is, of course, not the first time the Krock family has requested a waiver to demolish the building.

In September 2011, the Krocks requested a demolition delay waiver, and withdrew it shortly after requesting it.

At that point, the Telegram reported that “[c]ity construction permit records show the Krock family has spent $23,000 in the last 10 years maintaining the building.”  (Compare this to the much-larger, Krock-owned Commerce Building, which has had about $50,000 a year in improvements.)

After the second request for a demolition delay waiver, Katie Krock told the Telegram that “I don’t know what we would do with it [that is, the Central Building’s lot after demolition.]  I do know it’s costing us $150,000 a year, and we can’t do that anymore.”

Katie is the daughter of Aaron and Janet Krock, and is employed as the building manager for Commerce Associates, which includes 332 Main Street.  A lawsuit in 2010 alleged that she is paid “more than $250,000 a year, including a car and expense account.”

The cynical among us might ask if that sort of salary is warranted when the properties as a whole have perhaps a 50% vacancy rate, or whether a lack of investment over a great number of years led to the lack of marketability of the entire building.

Asbestos, again

The adorable 240 Main Street (which began part 3) is currently occupied by the civil process division of the Worcester County Sheriff’s Office.

Before that, the building had been in a state of disrepair, and was renovated in 2007 and 2008.

From Telegram reporting:

The state Department of Environmental Protection ordered a halt to the demolition work in the long-vacant building in 2008. The DEP alleged that workers employed by [Jonathan] Gabriel, doing business as Hammertime Construction, had not been given proper training in the removal of asbestos nor provided with protective equipment, prosecutors said.

The DEP also alleged that materials in the building containing asbestos were not wet down or disposed of in the proper sealed containers and that no arrangements were made to have a licensed contractor test the air for asbestos after the demolition work was completed.

Hammertime Construction might not sound familiar, but the name of Jonathan Gabriel’s former company might — it’s New England Demolition Co., the company that handled the demolition of Flagg’s Building.  In 1998, Gabriel was sentenced to two years in jail on seven guilty counts of illegally removing and disposing of dangerous asbestos.  Some of those counts were for Flagg’s Building.

Gabriel was found not guilty of violating the state’s Clean Air Act in 2011 (for work done at 240 Main Street), but “Janet E. Krock, president, treasurer and director of 240 Main Street Properties Inc., entered guilty pleas on behalf of the corporation in April 2010 and the property management company was fined $50,000.”

Again, the cynical among us might look at the track record of demolitions of Krock-owned properties and wonder if a demolition or renovation of 332 Main Street would be done in a way that would comply with state and federal environmental laws.

KJ Baaron’s

Katie Krock opened KJ Baaron’s, a wine and spirits shop, in the Courtyard Lobby Shops at the Commerce Building, in 2004.

A year later, she was named one of Pulse Magazine’s Ones to Watch.

In summer 2007, she closed the store and prepared to move to the current location at 220 Summer Street, a former auto parts store.  She also expanded the business to include cheese and specialty food items.

At that point — fall 2007 — Washington Square was in the middle of reconstruction, and Krock shared some frustrations with the Telegram:

“I drove in to work on Friday and I couldn’t even see my store from the rotary,” Ms. Krock said. “I’m thinking to myself, ‘This is going to be great for business.’ I’ve had customers complaining that they’ve almost gotten into accidents trying to pull in to the parking lot.”

Less than a month later, Krock and Houston Brothers, LLC (the owners of the building) had filed requests for injunctions, saying that the city’s reconfiguration of Washington Square had prevented her from creating an entrance to the store from Shrewsbury Street, and that the city could very well be creating a “landlocked” parcel.

Krock had previously requested a curb cut off the Shrewsbury Street side of Washington Square into her parking lot, and the request was denied.

Part of the reason is that the city-owned parcel facing Washington Square, in front of KJ Baaron’s, was proposed to be developed into a hotel or office building in the Washington Square master plan.

Krock had only been vaguely aware of the master plan and the Washington Square roundabout designs, which eliminated the driveway from Shrewsbury Street to her parking lot.  At the time she told the Telegram:

“I kind of just did this,” Ms. Krock said in an interview. “I have chosen where I’m going to put it and that’s where I am.”

The city argued that Krock should not have the curb cut from Shrewsbury Street, and that she had not requested a right-of-way.

“The entrance used to be there, but now the curb cut comes onto city property, not their property,” [City Solicitor David] Moore said. “What they’re doing is like asking Mass. Highway (the state Highway Department) for a curb cut to go over my neighbor’s property to my garage.

“We think a curb cut will have a negative effect on the marketability of the parcel and will also be a public safety problem,” he said.

In July 2008, the state land court ruled that the lack of curb cut did not prevent the owners from accessing the property.  Among other things, the decision stated that “[t]his was a case that never should have been brought in this court, seeking injunctive relief that neither this court, nor any court, could grant, based on an alleged fact … that was untrue.”

From the Telegram:

The court ruled that the lawsuit was based on a false premise and that a request by the city for monetary sanctions against the Worcester firm Brackett & Lucas, the plaintiff’s lawyers, is appropriate. The amount of the sanctions, if ordered by the court, will be based on the actual costs incurred by the city.

A few weeks ago, KJ Baaron’s has requested a move to 730 West Boylston Street from the License Commission.  So — there may be more of this story yet to come.

Animal House

The Krock family lives on a 9-acre estate off of Salisbury Street, near the intersection with Forest Street.  Close to that house is 274 Salisbury, which caused contention with neighbors up to the mid-2000s.  From a WoMag article:

“It’s worth noting that there’s no love lost between the Krocks and some of their neighbors.  For years, residents complained about a house at 274 Salisbury St. owned by the Krocks, which abuts their estate and the 12 new lots.

“For reasons that are unclear, the large, handsome Colonial house was perennially rented out to Assumption College students.  Neighbors complained of rowdy partying and overcrowding at the house.

“At one point, code officials and police officers staged an early-morning raid on the house, an action that showed nine people sleeping there. …

“The so-called ‘Animal House’ was ultimately silenced on May 5, when the Allen Trust (listed as the owner of the house) and the city reach an out-of-court settlement guaranteeing that no more than three unrelated persons would be allowed to rent the house simultaneously.”

“Never sign your name to anything”

In the excellent WoMag piece “Who Is Barry Krock?” from 1996, Jordan Levy was quoted as saying that Barry Krock was “not one of the boys.  He never had to be in the old-boy network.  Maybe they kept him out after he decided he didn’t want in.  I don’t think Barry Krock could give a damn whether he’s inside or not.”

There are many reasons the saga of the Krock family fascinates me so much.

For me, they are an example of what it is to be powerful in so many ways, and influential in so few.

When Worcester was considering building the civic center in the late 1970s/early 1980s, Barry Krock offered the city between $500,000 and $1 million to named the structure after his father.  Jordan Levy recalled that “[w]e were struggling and trying to get a major donation … He wanted it named the Aaron Krock Arena and for whatever reason, they balked; they weren’t interested in having it named for him.”

I can’t imagine having a million dollars to spend on naming rights for an arena.

But I really can’t imagine having that money, and wanting to create some kind of memorial to my beloved parent, and having that offer rejected by the community in which I’d lived my whole life.

That moment summed up the unique place the Krocks occupy in Worcester.

They own iconic Worcester buildings — whole blocks; their father and grandfather founded an iconic local bank; they own what is quite possibly the largest private estate in the city.

But they persist in tearing down or otherwise neglecting some of those iconic properties; the bank that was once so closely associated with their family is owned by others; and they rented out a party house in front of their estate despite the concerns of neighbors.

No matter how much money they have, or how many properties they own, it’s unlikely they will ever be beloved or influential or even just almost liked.

It doesn’t have much to do with being part of the “old boy network” or not.  As we’ve seen in the past 30-40 years, those on the inside, those in real power, can change dramatically in a relatively short amount of time.

In the case of the Krocks, especially in the past 15-20 years, there seems to be very little desire to want to have a deeper influence than the ability to shock the city with a building demolition.

WoMag quoted “…one businessman who knows [Barry] Krock” as saying that “a trait the son learned from the father…: Never sign your name to anything.”

“Never sign your name to anything” might be smart business advice, but it’s lousy life advice.

Any goodwill the family could have gained by acting as if they were part of the community rather than those set apart — by default or by will — can likely never be created.

Sources

“Who is Barry Krock?”, by Ellen O’Connor, Worcester Magazine, 28 August 1996

“Punishing polluters // Jail sentence sends strong message”, T&G, 20 October 1998

“There’s gold in that there land”, by Chris Kanaracus, Worcester Magazine, 14 October 2004

“Wine shop a family affair; KJ Baaron’s named after the Krocks”, by Barbara M. Houle, T&G, 28 October 2004

“Morocco will open at former Anthony’s; Mideastern eatery on Shrewsbury St”, by Barbara M. Houle, T&G, 17 July 2007

“Drivers work to navigate new square roundabout; Dirt mounds frustrating small-business owner”, by Ashley Bishop, T&G, 26 November 2007

“Store owner: Change roundabout; She says city cut off KJ Barron’s entrance at Washington Square”, by Shaun Sutner, T&G, 5 December 2007

“Curb cut confrontation continues; Liquor store retailer fighting entry ‘landlock'”, by Shaun Sutner, T&G, 12 December 2007

“Retailer’s lawsuit tossed out: Roundabout altered access to wine store”, by Thomas Caywood, T&G, 11 July 2008

“Contractor cleared of violations”, by Gary V. Murray, T&G, 6 August 2011

“Property problems: Demolition threat highlights neglect”, by Shaun Sutner, T&G, 25 September 2011

“Central Building downtown headed for scrap heap?: Owners seek waiver to tear down landmark, by Steven H. Foskett, Jr., T&G, 21 November 2012

“Demolition request for Main St. building on hold”, by Steven H. Foskett, Jr., T&G, 11 January 2013

Unlocking the Krocks, Part Three – Down on Main Street

In this installment, I’d like to talk about some of the Main Street properties the Krocks have owned; in the next installment, we’ll look at the Central Building (332 Main Street) in particular.

240 Main Street

The adorable, Second Empire style building that is 240 Main Street was the first headquarters of the State Mutual Life Assurance Company.

From the Telegram in 1955: “State Mutual and Merchants & Farmers Mutual Fire Insurance Co. constructed the four-story building in 1872.  It served as their headquarters until 1897, when State Mutual moved into its present building.  Worcester Gas Light Co. owned the building until” 1951, when it was bought by Anna Krock, the wife of Aaron Krock.

State Mutual is now Hanover Insurance, and it moved into Worcester’s first skyscraper, 340 Main Street, in 1897.

Currently, the Krocks own the first two homes of State Mutual — 240 and 340 Main Street.  And Janet is the official owner (in this case, trustee) of 240 Main Street, just as her mother-in-law was sixty years ago.

Commerce Bank

Four years after Anna Krock purchased 240 Main Street, it became the home of Commerce Bank.

Aaron Krock began Commerce Bank with $525,000; of the fifteen incorporators of the bank, one was his then-21-year-old son, Barry.

The bank had ten employees when it began, one of whom was William Roberts, the executive vice president and treasurer, as well as one of the directors of the bank.  Roberts, originally from Havana, Cuba, had worked with Aaron Krock for several years before the founding of Commerce Bank.

(Readers of part one may also remember that William Roberts would become one of Barry Krock’s closest business partners.)

So Commerce Bank began business in 1955, and Anna Krock received rent from the bank and the tenant that occupied the upper floors of the building, the Ward School of Airline Training.

Rogers Block

By the mid-1960s, the bank was so successful that it opened its first branch in a building Aaron Krock owned at 426 Main Street, the Rogers Block.

Today, the Rogers Block, on the corner of Main and Pleasant, has Honey Dew Donuts on the ground floor, but for 93 years –from 1871 to 1964 — it was home to Easton’s news and soda shop.

The building was constructed in 1869 by Thomas Rogers, who had made his money in shoe manufacturing and real estate.  (Among other things, he owned buildings on Front Street, 11 Pleasant Street, and most of the land around Canterbury and Southgate Streets — SWIP!)

I haven’t seen pictures of the exterior in 1965, but according to newspaper accounts, the upper exterior of the building had blue tile siding, and there was a “‘marble-ized’ white concrete sidewalk” in front of the bank.

I’m not sure when the Krocks sold the building and when the Commerce Bank branch there closed; I think it was before the 1980s.

Commerce Building

The location of the Commerce Building, 340 Main Street, was previously home to Brinley Hall, the location of the first National Woman’s Rights Convention on October 23-24, 1850.

After Mechanics Hall was constructed in 1857, Brinley Hall was used less and less, and was eventually demolished in 1895 to make way for the new State Mutual Building.

By 1894, 240 Main Street had become too small for State Mutual, and plans were made to construct Worcester’s first “skyscraper”, the nine-story Classical Revival building we now know as the Commerce Building.

State Mutual moved to its current location on Lincoln Street in 1957.  Aaron Krock and then-partner Harry Talman purchased the Commerce Building shortly thereafter.

Talman and Krock eventually dissolved their partnership and sold the building, but Aaron’s son Barry and frequent partners Williams Roberts and Herb Ingram bought the building back in 1975.  The building has been owned by the Krocks and their associates ever since.

Planned Parenthood was located on the sixth floor of the Commerce Building from 1982-1992.

A month into its tenancy, Problem Pregnancy moved into office space on the same floor.  Planned Parenthood sued their landlord, and Problem Pregnancy was evicted in 1984.  (Problem Pregnancy moved to 332 Main Street — the Central Building — so at least the Krocks and their partners kept the tenant within their buildings.)

Planned Parenthood drew weekly protests for the duration of its time there, especially during the late 1980s/early 1990s.  A protest on February 17, 1990 drew 280 protesters (supporters and foes) which resulted in 79 arrests.  The clinic was also firebombed in September 1990.  Herb Ingram declined to renew their lease in 1992, and they moved.

In 1994, Commerce Associates (a limited partnership of Barry and Janet Krock, Barry’s sister Beverly Goldman, Herb Ingram, and William Roberts) won bids for DSS and DET to rent office space in the Commerce Building, and DMH to rent office space in the Slater Building (390 Main).

But in 2005, DSS opted to move to a new location (the former St. Vincent Hospital maternity ward on Vernon Hill) even though the Commerce Building submitted a lower bid.

DSS accepted a higher bid because it had had “years of complaints from workers about rat- and cockroach-infested cubicles and lack of free parking.”

A judge denied Commerce Associates’ attempt at an injunction to stop the move (because they were the lowest bidder); their attempt to appeal was also unsuccessful.

Commerce Bank, continued

Aaron Krock founded Commerce Bank in 1955 with $525,000.  Commerce was successful enough to open the branch in the Rogers Block in 1965.

That same year, Krock also acquired a controlling interest in Shrewsbury Bank & Trust Co., and his son Barry was made president of that bank.  Three years later, the bank merged with Commerce.

At Aaron’s death in 1972, the bank’s assets were up to $36 million, and Barry said that the bank would need at least $100 million to survive.

By the end of December 1976, Commerce Bank had assets of $50 million.

But Commerce Bank was not the only bank the Krocks invested in.

In 1968, they tried (and failed) to take over Merchants National Bank of Leominster.  Their rival, Ronald Ansin, acquired enough shares to prevent them from having a majority holding.

It seems as if the rivalry continued for decades, until 1989, when Merchants began losing millions from real estate development loans.  The Telegram reported in October 1991 that:

In November 1990, federal regulators ordered Merchants’ management to raise close to $10 million in equity capital this year or face government takeover.

But for much of 1991, the bank’s two major stockholder groups were locked in a court battle over the kind of stock the bank agreed to sell to meet the regulators’ capital requirement.

The two stockholder groups were, of course, led by Krock (who had a 34.5 percent interest in the bank) and Ansin (who controlled a 64 percent interest).

By Fall 1991, Merchants had a negative net worth of $6.4 million.  In December 1991, WCIS paid the FDIC “$2.7 million to acquire Merchants’ $150 million in deposits.”

But Merchants was not the only bank in trouble in Barry Krock’s world in the early 1990s.

“Commerce Bank lost $1 million in 1990, $1.9 million in 1991 and $743,000 in 1992” — primarily because of losses in commercial real estate loans.

In August 1993, two financial ratings firms questioned the health of Commerce Bank.

In October 1993, David “Duddie” Massad bought Commerce Bank for an undisclosed sum; the Krocks had owned 96 percent of the shares in the company.

After nearly forty years, the Krocks were no longer in the banking business.

Slater Building

Even after Duddie bought Commerce Bank, the Krocks continued to own the building that housed the main branch: the Slater Building, at 390 Main Street.

The Slater Building became the city’s second “skyscraper” in 1907 (ten years after the Commerce Building), and was constructed by the Norcross Brothers.

(Fun fact: Fallon Clinic’s first home was the Slater Building; it occupied space there from 1929 to 1946.)

Commerce Bank spent $1 million renovating the first and second floors of the Slater Building in 1999.  (The project was managed, unsurprisingly, by TASC, Herb Ingram’s architectural/construction management firm.)

In October 2010, Barry and Janet Krock, and their daughter Kathryn, were sued by the other trustees that owned the Slater Building: Barry’s sister, Beverly Goldman; Herb Ingram; and the executor of the estate of Irene Roberts, the widow of William Roberts.  The Telegram reported that:

The plaintiffs allege that Mr. Krock reneged on a 2006 agreement to sell the buildings within six months and that he turned down, interfered with or blocked offers of $21 million and $10 million from out-of-state companies, and, finally, $11 million from Mr. Ingram and David G. Massad, chairman of Commerce Bank.

They also charge that the Krocks drained the trust by, among other things, overpaying Kathryn Krock as manager of the properties; the suit says she is compensated more than $250,000 a year, including a car and expense account. The suit refers to the 31-year-old as a “fashion school graduate with no training whatsoever as a manager of commercial properties.”

Shortly after that article was written, Commerce Bank bought the Slater Building from the Krocks for more than $4 million in October 2011.

WCIS/365 Main Street

The Krocks and Herb Ingram bought 365 Main Street — the former WCIS building — along with an 87-car parking lot off Foster Street for $1.25 million in 1999.

Pearl-Elm Garage

I’d like to end this part on a slight tangent that I know some of you will appreciate.

In 1986, a developer offered the city $1.8 million to buy the Pearl-Elm and Federal Plaza garages, and two other businesses indicated they, too, would be interested in purchasing them.

The city did not sell them, but financial difficulties in the late 1980s made the city start thinking about selling one or both garages (as well as the Centrum).

In the late 1980s, NYNEX and St. James Properties proposed building a 10-story, $30 million office building at the corner of Chestnut and Elm: Chestnut Place.

The catch?  They wanted the city to sell them the adjacent Pearl-Elm garage.

The off-street parking board had already done a study that showed they needed more space, and they had recommended a $4.5 million, 200-space expansion to the city manager, $1 million of which would have been funded by a state grant.

Then-CM Mulford said that if they sold the garage to the Chestnut Place developers, the sale price along with the $1 million grant could be used to build a new municipal garage in downtown Worcester.

In October 1989, the off-street parking board unanimously agreed with Mulford, approving the sale.

Many property- and business-owners in the area opposed the sale.

Barry Krock, who owned much of the property near the garage (including the Slater Building next to it), said that the garage should be put to public auction, and that he was willing to pay $7 million for it.

But by November 1989, the city had hammered out a compromise with the developers: the garage would continue to be city-owned, but the city would build two new decks on top of the garage (as was originally planned) and would agree to a 99-year lease of 200 parking  spaces with the developers at market rate prices.

So — next time — more on the Central Building, which the Krocks have recently proposed demolishing.

Sources:

“New Bank to Open Here This Summer”, Worcester Telegram, 8 April 1955

“Modern Bank Gives New Look to Old Corner”, Worcester Telegram, 4 March 1965

“Krock Follows Late Father As Head of Commerce Bank”, Worcester Telegram, 13 January 1973

“City “garage sale’ is opposed”, by Russell Eames, T&G, 9 February 1989

“Ingram has stuff to make it work”, by Robert Bliss, T&G, 10 February 1989

“The Fallon Clinic turns 60 tomorrow”, T&G, 19 June 1989

“Board backs garage expansion”, T&G, 21 July 1989

“NYNEX joins developer to build city office tower”, by Nick Kotsopoulos, T&G, 20 October 1989

“Price of Pearl-Elm garage is a worry”, by Nick Kotsopoulos, T&G, 20 October 1989

“Plan to sell garage worries merchants”, by Kathleen Pierce, T&G, 24 October 1989

“Board gives the go-ahead to Pearl-Elm garage sale”, by Nick Kotsopoulos, T&G, 27 October 1989

“Sale of garage seen as catalyst for good or bad”, by Nick Kotsopoulos, T&G, 29 October 1989

“Garage plan changes; Agreement includes addition, rate hike”, by Nick Kotsopoulos, T&G, 10 November 1989

“City calls off sale of garage; Developers to lease 200 spaces”, by Nick Kotsopoulos, T&G, 15 November 1989

“Police try to recoup costs from protesters”, by Lynne Tolman, T&G, 24 February 1990

“Two men tussle over bank; Financial remedy is central issue”, by Kathleen Pierce, T&G, 20 October 1991

“WCIS takes over Merchants”, by Kathleen Pierce, T&G, 14 December 1991

“Planned Parenthood to relocate within city”, by Geraldine A. Collier, T&G, 21 February 1992

“Commerce Bank rebuts zero rating; Firm issues gloomy report”, by Chris Pope, T&G, 10 August 1993

“Women’s vote is 73 years old; Observances at suffragette’s grave”, by Richard Duckett, T&G, 26 August 1993

“‘Duddie’ agrees to buy Commerce Bank & Trust”, by Chris Pope, T&G, 5 October 1993

“State agencies move to Main St. ; DSS, DET to go to Commerce Building; DMH office in Slater Building”, by Emilie Astell, T&G, 24 March 1994

“Foes to be neighbors again”, by Winston W. Wiley, T&G, 22 December 1995

“Silver Hammer Awards”, T&G, 6 May 1999

“Landmark Main St. building sold”, by Lisa Eckelbecker, T&G, 22 October 1999

“Before Mechanics Hall there was Brinley Hall”, by Albert Southwick, T&G, 8 May 2005

“DSS gets ready to move city office; Relocation to former St. Vincent Hospital set for end of summer”, by Shaun Sutner and Lisa Eckelbecker, T&G, 7 June 2005

“DSS move is resisted; Main St. landlord fights lease award” by Shaun Sutner, T&G, 3 August 2005

“Property problems: Demolition threat highlights neglect” by Shaun Sutner, T&G, 25 September 2011

“Commerce pours its heart into Worcester: Bank prepares to renovate historic building”, by Priyanka Dayal, T&G, 5 February 2012

Unlocking the Krocks, Part Two – 280 Main Street: Between a Krock and a Hard Place

An introduction to some of the players

In 1989, Center Boulevard Associates — a partnership between “Ralph Crowley, chairman of Polar Corp.; William F. Sullivan, president of William F. Sullivan Insurance Agency; Philip X. Reid, owner of Park Ave. Realty; R. Norman Peters, a Worcester lawyer and developer; and Herbert G. Ingram, president of TASC Inc.” — proposed a large project on land owned by North Main Street Real Estate Trust, which was — of course — owned by the Krock family.

Before we talk about those plans, let’s talk a little bit about some of the players.

Herb Ingram was mentioned briefly in our last installment.  Ingram had begun his career in property management in 1958, working for Aaron Krock and Harry Talman, the then-owners of the Commerce Building (340 Main Street).  In the 1970s, Ingram acquired 340 and 390 Main Street with partners Barry Krock and William Roberts (vice-president of Commerce Bank); they acquired 332 Main Street in 1981.

But these were not the only partners Ingram had.  He purchased the Graphic Arts Building at 25 Foster Street (now owned by MCPHS) in 1974 with Duddie Massad and Donald F. Flanagan.  Ingram and Massad eventually created their own real estate firm — M&I Realty — and bought 65 James Street in 1991, 70 James Street in 1996, 700 Southbridge Street in 1995, and the Home Federal Savings Building (where WCCA is now) in 1997.  (I think they’ve owned and sold more properties, so consider this an incomplete list.)

(Aside: I think Herb Ingram really resembles the actor Mitch Ryan, who played Burke Devlin on Dark Shadows and Commander Riker’s father on Star Trek: The Next Generation.)

Another one of Herb Ingram’s real estate partners was R. Norman Peters.  Ingram and Peters met in the 1960s when Peters was working as a lawyer at 340 Main Street, which Ingram managed.  Ingram and Peters did their first joint real estate deal with a subdivision of foreclosed land off of Salisbury Street (18 units on Lantern Lane) in 1981; the same year, they also bought Executive House apartments (80 Salisbury Street) and turned them into condominiums.

While they built the office tower at 255 Park Avenue, which opened in 1986, they also spent much time buying apartment buildings to convert into condos.  They converted the El Dorado Apartments on Ashland Street and an apartment block at Chatham and Irving streets into condominiums.  In the late 1980s/early 1990s, Ingram and Peters built Lynden House (which was apartments and is now condominiums) at the corner of Elm and Linden Streets; they bought the former Quality Inn on Southbridge Street, with the intention of turning it into 138 units of condominiums, but eventually turned most of the units back into hotel use.

Ingram and Peters also owned land on Barber Avenue (behind the Greendale Mall) that became the Sam’s Club; with Duddie Massad, they also own land in North Smithfield, RI.  And they would become members of the board of Commerce Bank & Trust when Duddie bought that in 1993.   (But that’s a story for another installment.)

I’m not terribly familiar with William F. Sullivan or Philip X. Reid; Sullivan became a member of the board of Commerce Bank along with Ingram and Peters in 1993, so he must have been close with Duddie.  In the early 1990s, Reid and Peters had been part of a group pushing for a football stadium (for the Patriots) to be built.

Twin Towers

Those five partners — Center Boulevard Associates — had originally proposed a “$35 million, 15-story office condominium project” for a 1.1 acre lot (“Lot 35”; cue Thomas Pynchon) on Worcester Center Boulevard, “the area bounded by Central, Commercial and Exchange streets and Worcester Center Boulevard”, across from the Centrum (currently called the DCU Center).

But in March 1989, they pulled their bid for Lot 35, and instead proposed an $84 million project to “build two 18-story office towers on 2 1/2 acres along Main Street with two parking garages for 1,500 cars.”

The first phase of the new project, which will be called 280 Main Street, will contain a 220,000-square-foot tower and an eight-story parking garage. Phase two will contain a 250,000-square-foot tower and a 500-car extension of the parking garage.

Construction should begin within six months, with occupancy slated for 1991, Peters said yesterday.

Ingram had wanted to develop something on that land for years, and had finally gotten Krock to agree.  The group had spoken with then-City Manager Jeff Mulford about getting tax incentives for the development.

But four months later, the project was dead in the water.

Center Boulevard Associates were going to lease the land from a trust owned by the Krock family for 99 years.  The Krocks owned 340 Main Street, just a block away from the proposed “twin towers”, and were leasing 50,000 square feet of that building to Paul Revere Insurance Group.  So Barry Krock wanted part of the lease for 280 Main Street to include compensating him if Paul Revere moved out of 340 Main Street and into the new tower complex.

By August 1989, talks were back on.

But by February 1990, they were off — permanently.

“‘We’ve tried to put together something on north Main street,’ [Herb Ingram] said. ‘I would say the obstacle there is the unrealistic value they’ve put on their property.’

“Brenda Baris, a spokeswoman for [Barry] Krock, said he does not give interviews.”

Flagg’s Building

The building located on the property we’re talking about (282-306 Main Street) was Flagg’s Building.  Though you can’t tell from the picture, it had originally been a beautiful Italianate building (see #11 on this page for a picture of Flagg’s in its full glory).  It had been built in 1854 for Augustus and Elisha Flagg, who were descended from some of the first English settlers of Worcester.  The family had previously built a building for a bakery in 1800, and the building had burned down in 1815.  It’s unclear what occupied that parcel from 1815-1854, but in 1854, the most recent Flagg’s Building was erected at a cost of $50,000.

The building originally had six storefronts on the first floor, offices on the second, and lodging on the third and fourth floors.

In October 1990, the building was only occupied in the first floor — by a sports bar, a nightclub, and an adult bookstore — when a two-alarm fire struck and damaged some of the upper stories.  I believe the building continued to be at least partly occupied on the first floor after the fire.

In 1995, Preservation Worcester named Flagg’s Building to its first list of Most Endangered Properties.  At the time, the tenants were Sports Pub, Union Books, and the Kaleidoscope night club — the same tenants at the time of the fire five years earlier.

On Friday, May 31, 1996, the owner of Flagg’s Building, 288 Main St. Associates Limited Partnership — a partnership between Barry Krock and his sister Beverly Goldman — received permission from the city to demolish the building.  New England Demolition Co. began the demolition on the following day — June 1.

Then-WoMag reporter Ellen O’Connor reported the following in 1996: “‘From what I understand, he had some structural studies done and had them sort of cooked to make it look absolutely urgent that the building had to come down,’ said a source, who added he had received that information from someone within the city administration.”

The building’s owners also didn’t apply for a permit from DEP to demolish the building, and DEP temporarily stopped the demolition after about a week, after asbestos seemed to have been observed in the building.  The state inspected the building, found the asbestos, the owners worked on an abatement plan, and the demolition was back on by the end of August.

[The president of the company that did the demolition, New England Demolition Co., would eventually be charged under air pollution and asbestos removal laws, and would be found guilty in the largest asbestos criminal enforcement case in Massachusetts history.]

Courthouse

If Ellen O’Connor’s anonymous source was right, and there was no true structural problems with Flagg’s Building that would require immediate demolition, then why was Barry Krock so keen to tear it down?

The answer was that the state was thinking of building a courthouse annex (to expand the capacity beyond the existing county courthouse at the corner of Main and Highland Streets), and the former Flagg’s would be one of the sites considered for the annex.

As the courthouse project turned into building a large courthouse complex (versus an annex to an existing building), the Krocks offered to have the courthouse built at 252 and 288 Main St., and to demolish the Commerce Building to put in an 800-car garage.

But an alternative site — the one the courthouse currently sits on — won out.  It was owned by Philip O. Shwachman, a developer who had partnered with Herb Ingram and Norm Peters in the past.

Regarding the property owned by the Krocks, the Telegram reported that “state officials said a purchase price of $15.5 million was deemed to be substantially higher than the market value of the property. They also said its irregular shape and a steep grade at the rear of the property would put constraints on the courthouse design and could complicate security at the rear of the courthouse.”

Legacy

The site of the former Flagg’s Building has now been an ugly parking lot for more than a decade, and is currently used as a parking lot for the courthouse.

As Shawn Sutner wrote in 2011:

Mr. Krock, who controls several hundred parking spaces in surface lots scattered around downtown, later ran afoul of city officials when he erected signs at the courthouse lot that did not conform to signage regulations. Ordered to take them down, he instead had two trucks parked on the property emblazoned with huge signs hawking courthouse parking.

But the legacy of Flagg’s Building is not just a parking lot: it is also the demolition delay ordinance.

Originally set at six months, and now set at a year, the demolition delay ordinance means that if you own an historic building (on the National Register of Historic Buildings, or listed in MACRIS) and want to demolish the building, or make certain changes to the structure, that you must request a waiver of the delay from the historical commission.

This allows preservation groups (or other interested parties) time to create a plan to save a building or part of a structure.

I think the next installment will focus on other Main Street properties owned by the Krocks.  I welcome comments/clarifications/amplifications to what I’ve written so far.

Sources:

“His father would be proud”, by Robert R. Bliss, Telegram & Gazette, 10 February 1989

“Lot 35 competitor pulls out of race ; Main Street project in the works instead”, by Kathleen Pierce, Telegram & Gazette, 2 March 1989

“Twin towers plan grounded; Lease restriction stalls plans for North Main St. office project”, by Kathleen Pierce, Telegram & Gazette, 18 July 1989

“CityPlaza group might ask for a plan change; Hotel rooms may replace planned condos”, by Nick Kotsopoulos, Telegram & Gazette, 19 September 1989

“Tale of two city sites; Biotech park zooms, no downtown rehab boom”, by Paul P. Heldman, Telegram & Gazette, 10 February 1990

“All-suites Clarion hotel opens”, by Kathleen Pierce, Telegram & Gazette, 19 June 1990

“State warns against Lot 35 plan”, by Nick Kotsopoulos, Telegram & Gazette, 30 June 1990

“Fire hits Main St. building”, by Russell B. Eames, Telegram & Gazette, 15 October 1990

“Wholesale club war heats up; PACE plans Worcester outlet”, by Kathleen Pierce, Telegram & Gazette, 16 January 1992

“‘Duddie’ agrees to buy Commerce Bank & Trust”, by Chris Pope, Telegram & Gazette, 5 October 1993

“Endangered city property ranked // Preservation Worcester lists top 10”, by Richard Duckett, Telegram & Gazette, 11 December 1995

“Worker hurt on demolition job // Preservation Worcester protests wrecking of Main St. building”, by Richard Duckett, Telegram & Gazette, 2 June 1996

“State calls halt to Flagg razing // Asbestos contamination feared”, by Richard Nangle, Telegram & Gazette, 7 June 1996

“Building owners face deadline // Inspect for asbestos by Monday or face fines, DEP says”, by John J. O’Connor, Telegram & Gazette, 8 June 1996

“Historic Worcester building found to be full of asbestos // Disposal plan needed for Flagg’s Building demolition”, by John J. Monahan, Telegram & Gazette, 13 June 1996

“Hoover recommends ‘demolition delay ordinance’, by Nick Kotsopoulos, Telegram & Gazette, 19 August 1996

“Who is Barry Krock?”, by Ellen O’Connor, Worcester Magazine, 28 August 1996

“Central Mass Digest”, Telegram & Gazette, 25 September 1996

“Two Main St. sites eyed for new courthouse annex”, by Emilie Astell, Telegram & Gazette, 4 February 1997

“Purchase of Vuona’s boosts downtown”, by Peter P. Donker, Telegram & Gazette, 6 February 1998

“Man convicted in asbestos case”, by Richard Nangle, Telegram & Gazette, 10 October 1998

“Courthouse site on front burner”, by Emilie Astell, Telegram & Gazette, 14 April 1998

“Time, money tip scales on court site”, by John J. Monahan and Emilie Astell, Telegram & Gazette, 12 November 1999

“Property problems: Demolition threat highlights neglect”, by Shawn Sutner, Telegram & Gazette, 25 September 2011

Unlocking the Krocks, Part One: Tough Nut to Krock

With the demolition of the Central Building (332 Main Street) coming up before the Historical Commission tomorrow evening, I thought it would be a good idea to write a series about the business endeavors of the Krock family.  That Krock works so well in so many puns factored into this decision.  Here’s part one.

Aaron Krock

The life of Aaron Krock is part Horatio Alger, part Gordon Gekko.

Krock was born in Europe in 1901 (or 1899), and came to Worcester ten years later.  He worked as a Telegram paperboy and a Western Union messenger boy.  At age 15, he’d saved up enough money from his work as a paperboy and a messenger boy to go down to Wilmington, NC, and open a small dry goods stores.

Two years later — at age seventeen — he sold the store and became an auctioneer.  (From what I can tell, I think he started in tobacco auctions and later moved on to auctioning off pretty much anything, mostly higher-end deals.)

After two years as an auctioneer in North Carolina, he came back to Worcester and started Aaron Krock Auctioneers.

By the late 1930s, he was working as an agent to find buyers and operating personnel for various businesses, but he also owned various box, paper, and furniture companies.

In 1945, he acquired the North Works of American Steel and Wire.

In 1955, forty years after leaving Worcester to open his first business, he opened Commerce Bank & Trust with $525,000 in capital surplus and undivided profits.

Whatever else one can say about the Krock family — and I think most of us have our opinions — it is pretty extraordinary for someone to come to this country with little money, work hard as a young boy, and open one’s first successful business at age 15.  What is both good and bad about the Krock fortune comes from Aaron Krock and his relentless drive to make lots of money, own lots of property, and owe no one anything.

After opening a bank, after buying, running, and selling numerous businesses, Krock never forgot his first love — auctioneering.

Indeed, in the early 1960s, he was auctioning off fleets of planes, shoe factories, and an iron works mill.

Auctioneering was certainly lucrative — he said that ‘One auction pays me more than a bank president makes in a year.’  From what I’ve read, many of these auctions were federal bankruptcy auctions (or auctions of companies that had seen better times), and his fees ran between 3 to 7.5 percent of the sale price.   (In 1996, one anonymous city official told Worcester Magazine that Aaron Krock “used to make his money on other people’s problems.”)

By the early 1960s, he had also acquired one of the properties most associated with his family — the Commerce Building (340 Main Street, bought in the late 1950s when State Mutual Life Assurance Co. moved to Lincoln Street), as well as the entire block on the corner of Main and Pleasant where the Honey Dew Donuts is now.

By the time of his death in 1972, Aaron had seen Commerce Bank’s assets grow from $525,000 to more than $36 million.

Whether or not Krock made his money on other people’s problems, a man was able to go from paperboy to owning whole city blocks, and build a financial foundation that continues to make his family one of the most powerful and influential in the city.

Edward Krock — an aside

No discussion of the Krocks would be complete without a short diversion into Aaron’s younger brother, Edward, with an equally Algerian rise to fame (Worcester newsboy to teenaged grocery store owner to personal fortune of $50 million) and a Gekko-like fall (serving on the boards of major corporations to largest personal income tax evader of his time).

I don’t think Aaron and Edward did business together — I haven’t found anything about it in my reading — but I figured I’d mention it in case anyone was wondering if it was Aaron who had to flee to the Bahamas to keep out of the federal penitentiary.  Nope — that was Edward.

The Rise of Barry

When Aaron passed away in 1972, his son Barry, then 39, stepped into the role for which he’d been groomed for years.

Barry attended Worcester Academy and BU.  He began working at Commerce Bank in 1955 as a messenger.  By 1956, he was assistant treasurer, then assistant vice president in 1957, and vice president in 1963.

In 1965, Aaron Krock acquired a controlling interest in Shrewsbury Bank & Trust Co., and Barry was made president.  He was 31 “and reportedly the youngest bank president in the country.”  In 1968, it merged with Commerce Bank, and he became vice president of Commerce.

In an extremely rare interview he gave to the Telegram in 1973, he said that, “My father wanted me to succeed him.  He stipulated it in his will.  I did not know it.  This is one thing he never told me.  It shows he had faith in me.”

Krock was also “a trustee and acting investor of National Trust of 390 Main St., a securities holding company which underwrites securities, manages industrial enterprises, serves as consultants and invests in special situations.”  The trust was, of course, owned by the Krock family.

Barry continued his father’s work in banking, real estate, and acquiring companies at a steep discount.

I gather that at some point 340 and 390 Main Street were no longer owned by Aaron Krock and his business partner Harry Talman (I think they had a falling-out).  In 1975, the buildings were acquired by Barry Krock and his then-business partners Herb Ingram and Commerce Bank vice president William Roberts.

Krock and Co. also acquired the building that inspired this post — the Central Building, 332 Main Street — in 1981.

Lawyers, Guns, and Money — and Burgers and Real Estate

This is not to say that all real estate deals Barry was involved in were as amicable.

The Park Chandler Realty Trust was established to buy the old Harrington & Richardson gun factory property on the corner of Park Avenue and Chandler Street (where the Walgreens drug store is).  Barry was one of the trustees.

The Harrington & Richardson factory was demolished with the intention of putting in a Burger King.

Some of the shareholders in Park Chandler Realty Trust alleged that Barry had a secret shareholders meeting on September 20, 1986, didn’t tell the other shareholders, and removed two people as trustees while electing himself and William Roberts (his real estate partner/Commerce Bank VP) as the sole trustees.

[How did this happen?  It seems he had 600 of the 1200 total shares, and worked with another shareholder — a majority of the shareholders at that point — to name Krock and Roberts the sole trustees.  I clearly do not have these kinds of skills.]

Barry, his wife, Janet, and some other trusts owned by family members also bought the Coppus Engineering Corp land — which adjoined the Park Chandler Realty Trust land — without involving the other members of the Park Chandler Realty Trust.

So they alleged that he cut them out of buying land next to the existing land — a conflict of interest — in an underhanded way.

I’m not sure what happened to the initial allegations (from 1987), but keep this in the back of your mind as we discuss what was eventually built on the property and another lawsuit about Krock’s actions as trustee of the Park Chandler Realty Trust.

So — Harrington & Richardson’s factory is knocked down, but the Burger King that was anticipated was never built.

For years (if you’re my age, much of you childhood), the lot seemed to be devoted to everything that an unsightly dirt lot is good for: carnivals, used car sales, waiting for something better to come along.

“Something better” in this case was a Stop & Shop supermarket, which Krock had attracted to the site in the early 1990s.

The problem was that Big Y was also pursuing a property for their own supermarket — at the corner of May and Mayfield, the site of the former Zayre.

Neighbors liked the proposal of the Big Y at May and Mayfield, and hated the proposal of another supermarket at Park and Chandler.

Barry fought anyway — he appealed the variance granted to the Big Y, which I think held up the process somewhat.  But — as we all know — Big Y was still able to get a building permit for the supermarket.

Barry was still stuck with the Harrington & Richardson property, and had earned the disgust of many of the neighbors in the Beaver Brook neighborhood and then-D5 councilor Wayne Griffin.

But he wasn’t stuck for long: Krock and Roberts (the trustees of Park Chandler Realty Trust) signed a 50-year lease with Walgreens in 1994.

Among other things, the lease said that a third of the rent should go to Superland Associates Limited Partnership, which is the trust for the land Barry & Co. acquired without the other members of the Park Chandler Realty Trust way back in 1986.  This would be to ensure that the Superland property would not be used to build a business that would compete with the Walgreens.  (That the Superland property is a dump that could never have anything that would compete with the Walgreens is, of course, beside the point.)

So, shareholders of Park Chandler Realty Trust (PCRT) sued Krock and Roberts (who died in 1996) for mismanagement and abuse of fiduciary discretion.

From “Krock to repay $500,000 to trust; Trustee diverted rental income from real estate trust” by Milton J. Valencia, 26 July 2006, Worcester Telegram and Gazette:

From 1988 to April 2005, Superland collected $707,250 in rent from the deal. The real estate appraiser, Martin J. Coleman, estimated it should have been more like $73,000. …

Much of the allegations pertain to Mr. Krock, such as the management fee of $170,000 he gave himself in 1997, which he said was owed for his duties. From 1998 to 2005, he paid himself $342,000.

Trustees are often paid for their services, and there’s no set law on how much they should be paid. Accountants testified managers could be paid 3.5 percent of gross rental income, though that work includes cleaning, management of the property, landscaping, snow removal and bookkeeping.

Mr. Krock did none of that, according to the court records, but charged a rate of $600 an hour, or $5,000 a day.

He was ordered to repay $282,000 of the money he collected, reducing his fee from $342,000 to $60,000.

That that particular Walgreens seems to be stuck somewhere between the first and third circles of Hell is not surprising when you think back to everything that’s happened there: stacking the trustee deck without involving all the shareholders, trying to build a supermarket no one wants after trying to build a fast-food restaurant no one wants, grossly overcharging management fees…

And that’s just one property.

In our next installment, we’ll talk about the ups and downs of Krock properties on Main Street.

Sources:

“Elect Krock Director, President of Bank” by Joseph H. Gauthier, 10 August 1955, Worcester Telegram

“Just Another Auction for Aaron Krock: Fleet of Planes Go on Block in Boston Next Week” – Worcester Evening Gazette, 1963

“For Him, Business Is a Vocation and Avocation” by Peter Donker, 11 February 1973, Worcester Telegram

“Three Area Men Buy Division of Singer Co.” 16 February 1978, Worcester Evening Gazette

“Coppus Site Purchase: Defendants Answer Suit” by Billings Kingsbury, 8 September 1987, Worcester Telegram

“Krock Is Sued in Land Purchase” by Billings Kingsbury, 7 August 1987, Worcester Telegram

“Ingram has stuff to make it work” by Robert R. Bliss, 10 February 1989, Worcester Telegram

“Who is Barry Krock?”, by Ellen O’Connor, 28 August 1996, Worcester Magazine; hie thee to the clipping file and read this article; you will not be disappointed!

“Mac attack“, by Walter Crockett, 1 May 1998, Worcester Phoenix; if you’ve gotten this far, read that column.  I aspire to be that level of biting commentary.

“Krock to repay $500,000 to trust; Trustee diverted rental income from real estate trust” by Milton J. Valencia, 26 July 2006, Worcester Telegram and Gazette

Many, many, many thanks to the biographical clipping files at the Worcester Public Library.