BRA Throws Funding Curve at Hayward Finalists

According to Meredith Baumann, spokesperson for the BRA, "This is the last step in the due diligence process." Baumann tells GlobeSt.com that essentially the BRA wants to see the each developer is financially able to meet these deadlines.

The requirement involves an "unconditional payment" of $13 million by the beginning of this coming June. Title to the property will be conveyed with this payment as well as a note and mortgage from the developer securing payment of the remaining $10 million, which is due by the start of construction. The time between those two payments cannot be more than two years. In that time period, the developer chosen will agree to pay the city a rent charge of $537,500.

Baumann insists that the requirement is not unusual but she acknowledges that the BRA has come under heavy criticism because it seems to be taking a long time to pick a developer to build on this prime piece of real estate--a former parking lot--located in the heart of the city near Boston Common and the recently built Millennium Place. "I am not going to comment on the length of time that we're being criticized for taking," she says. "We're doing our due diligence."

Eight developers originally responded to the BRA's request for proposal to develop the site. The original criteria included a minimum disposition price of $13 million. The price is now fixed at $23 million, the highest bid among the developers that was submitted by Lincoln Properties Co., one of the five finalists.

Lincoln's proposal involved 10,000-sf of retail space, 342 residential units and 567 parking spaces. Avalon Bay Communities's proposal included 32,000-sf of retail space, 300 residential units and 274 parking spaces. Keen Development Corp., which proposed 62,800-sf of retail space on two levels, 150 residential units and 310 parking spaces, has since joined forces with New Development Capital Partners, which had originally proposed 25,000 sf of retail space, 66 residential units, 265,000-sf of office space and 460 parking spaces. Millennium Partners Boston, a joint venture of Millennium Partners and MDA Partners LLC, proposed 40,000-sf of retail space, 330,000-sf of office space and 90 parking spaces. All developers want to build to the 155-foot maximum and include the required 10% affordable housing, where applicable.

The development of this site is part of the revitalization of the Downtown Crossing area, an effort that is being termed by the city "a hallmark" of city Mayor Thomas Menino's administration. In addition to the required price, additional required elements include at least 290 below-grade parking spaces and retail space.

This is not the first time this project has courted controversy. This past March, right after the finalists in the bidding process were chosen, the BRA's control over the parcel was challenged by the city council. The BRA had seized the land under the law of eminent domain but the council claimed that it was never notified of the action.