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Ending months of rumors, a local developer has acknowledged the sale of a mixed-use site on Boston Harbor, a permitted project anchored by a 198-room luxury hotel. The Raymond Property Group toiled for five years to gain approvals for the plan at Battery Wharf, but says it is now passing the torch to RBW, a Massachusetts limited liability company, for $28 million.

“We are delighted to announce this sale,” Raymond principal James English said in a press release. English called the deal “an offer too good to pass up,” explaining that the funds from the transaction will allow his firm to pursue additional projects in the city.

English and company founder Neil St. John Raymond were unavailable to elaborate on the decision, but sources close to the company maintain that the complexity of the development conspired with a tricky capital market to dash Raymond’s hopes for completing the assignment. “I think [Raymond] is very happy to get out of that thing,” says one former member of the development team. “Any waterfront project is going to cost money, but that one is going to be really expensive.”

According to the source, the condition of the waterfront pier will require extensive investment to shore up, while the cost of materials is also up considerably from what was originally anticipated. The former home of the Bay State Lobster Co., Battery Wharf consists of 4.6 acres of filled land, water and the pier. When fully built out, the development will feature 35,000 sf of retail space, 100 residential condominiums and a 348-vehicle, below-grade parking garage.

Ironically, Raymond probably would have done better by pursuing its original plan to build luxury housing on the parcel. In the time spent at Battery Wharf, the company has successfully permitted, built and sold out its 104-unit Trinity Place condominium tower in the Hub’s Back Bay. Raymond changed the Battery Wharf project after finding it too difficult to obtain a Chapter 91 license, which requires a public use on the ground floor of any waterfront development, with residential units prohibited.

Besides delaying the project, the change impacted the financing efforts as well, with hotels now among the least favorite property type for investors. According to sources, it was that hurdle which finally proved too daunting for Raymond.

RBW, comprised of local developer Harold Theran and several New York investors, is eyeing an opening late in 2002. RBW principals were unavailable for comment, but the company supposedly has agreed to follow the plan approved by a local citizen’s committee. It is also said to have secured Regents International Hotels to operate the hotel.

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