Despite protests from some, Governor A. Paul Cellucci has signed a bill clearing a major hurdle for a $600-million mixed-use complex planned for South Station. A provision included in the state’s $3.2 billion transportation bond bill exempts Hines Interests from so-called Chapter 91 regulations that guide development along Massachusetts’ waterways.

Hines vice president David Perry says the Texas-based firm is encouraged by Cellucci’s action, which came after considerable debate. Up until the final moment, it was unclear whether the governor would side with Hines and the Boston Redevelopment Authority, or acquiesce to environmentalists and several watchdog groups who claim the exemption will weaken oversight of waterway development.

According to Perry, the change was needed to correct “an unintended consequence of Chapter 91.” A road separating South Station from Fort Point Channel would normally have exempted the project from the regulations if it were considered a public way, but because it is technically private due to the presence of a large United States Postal Service operation, the Hines venture falls within Chapter 91 oversight.

“The legislation was essential to enable us to go forward,” says Perry, whose firm is proposing a 46-story office tower, 500-room hotel and 400,000-sf of residential uses. Other projects that have come up against the Chapter 91 rules have either been slowed or altered, including the 3.1 million-sf development planned for nearby Fan Pier.

Among those voicing concerns over Cellucci’s decision is Vivien Li of The Boston Harbor Association. Li’s group, which includes a mix of developers, maritime businesses and environmentalists, has long supported Chapter 91 as a way of ensuring continued access to the waterfront. The law governs such matters as public accommodations, project height and density. Li says she fears the Hines exemption could set a precedent.

“What’s to stop someone else from doing this?” says TBHA’s executive director. “That’s the thing that makes us nervous.”

In the aftermath of Cellucci’s decision, Li says TBHA has received assurances that Hines will honor several public benefits that were being negotiated such as water transportation subsidies and a harborwalk along the channel.

Hines hopes to work with the community, Perry stresses, noting that his group still has to obtain other city and state approvals. The company, which has already spent two years on the project, hopes to file its environmental impact report with the state this fall, and then begin wending it way through Boston’s Article 80 process for projects over 50,000 sf.

Even with the lengthy delays, Perry says Hines is still bullish on South Station, with hopes to begin construction by the end of 2001. The economy is holding up nicely for the time being, and demand is still there,” says Perry, whose company has seen several other Boston developers advance past them while its project has tried to deal with Chapter 91.

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