Former Fallon HQ in Worcester the latest entry in office-to-housing pipeline

The former headquarters of an insurance company in downtown Worcester is being transformed into almost 200 apartments with the help of a loan that's partly footed by the state's development finance agency.

MassDevelopment partnered with The Washington Trust Company to deliver about $51.2 million in loan financing for the project to overhaul the former Fallon Community Health Plan headquarters, the agency announced Monday. An affiliate of real estate development company Synergy is leading the office-to-residential conversion, which is expected to yield 198 market-rate apartments.

"Office-to-residential conversions like this project provide a variety of benefits including stabilizing the property value in the wake of the pandemic's impact on office buildings, restoring the occupancy of the building and contributing to the vitality of downtown, and addressing the community’s need for more housing opportunities," Worcester City Manager Eric Batista said.

The 11-story building will be renovated to include 41 two-bedroom units, 85 one-bedroom units and 72 studios, MassDevelopment said. Construction started last May and is expected to be done this August.

Fallon in 2023 announced it would move its headquarters from One Chestnut Place to the One Mercantile office building in downtown Worcester to keep up with workforce needs and support its expansion into government-sponsored health insurance plans. Fallon is now poised to be acquired by Mass General Brigham Health Plan, though CEO Manny Lopes has said it plans to maintain its presence in Worcester and central Massachusetts.

As it implements the 2024 housing bond law, the Healey administration last month announced $8.4 million in commercial conversion tax credits to support projects in Boston, Fitchburg, New Bedford, Pittsfield and Worcester. That included $3.6 million in tax credits for One Chestnut in downtown Worcester.

A former Lowell courthouse is also in the early stages of a housing redevelopment effort but it's too soon to know how many units could be created, a city official told the News Service.