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BOSTON-In a move that has stunned the city, Nicholas Pritzker is putting the 21-acre Fan Pier project on South Boston’s waterfront up for sale. The Chicago-based developer spent nearly three years getting the $1.2-billion hotel, office and residential complex permitted, but never secured the necessary financing to move the project forward.

Pritzker’s local representative tells GlobeSt.com that the company is not commenting on the sale. Calls to the Hyatt Development Corp., of which Pritzker is the chairman, were not returned by deadline.

Meredith Baumann, a spokesperson for the Boston Redevelopment Authority, confirms the project is going on the market. She tells GlobeSt.com that Pritzker met with Mayor Thomas M. Menino earlier this week and informed him that Hyatt Development Corp. would start to look for a potential buyer for the site. Baumann did not comment on Pritzker’s motive, but a city representative tells GlobeSt.com that Pritzker “ultimately decided that the project didn’t fit in squarely with [the company's] areas of expertise.”

Baumann emphasizes that Pritzker assured the mayor and the city that he would maintain the agreement he made with the city, especially in regard to the environmental and artistic commitment. The project, as approved, consists of nine buildings with 625 residential units, office and retail space, and a 325-room anchor hotel. Twenty percent of the residential space will be designated as affordable–50 units on site and 75 units off site. The development also includes 263,000 sf of open space with 107,000 sf for civic use, marina use and associated parking. The Institute of Contemporary Art recently signed a 99-year lease for a 62,000-sf museum on the property.

The value of the property is not yet known, but Baumann says the company plans to have assessors determine a value.

The deal has huge implications for the city’s waterfront section in South Boston, an area considered the last frontier of developable land in the city. The Fan Pier project is the largest development on the South Boston waterfront and its huge expanse currently sits nearly vacant and is used largely as parking lots. The city had great hopes for the development of this area but hotel projects, which have never been easy to finance, became even trickier with the recent downturn in the economy. The timing of this deal is also dangerously close to Frank McCourt’s recent move to look for an investor or buyer for his 25 acres–which sit adjacent to Fan Pier.

But Baumann notes that Menino is very optimistic about this latest turn of events. “If they can’t get it done,” she says, “then sell it and get someone in that can.”

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