Construction on Columbus Center halted
by Linda Rodriguez managing editor Thursday Mar 27, 2008 The developers of the massive Columbus Center asked the Massachusetts Turnpike Authority for a "continuance on any further construction" last week, which, if granted, could stop construction on the luxury condominium project for up to 18 months. "The developers of the Columbus Center recently asked for a continuance on any further construction, which the Turnpike Authority is currently considering," Mac Daniel, spokesman for the Turnpike Authority, said in an e-mailed statement. In a phone conversation, Daniel confirmed that asking for a continuance on construction did in fact mean a cessation of construction for a time. "While we still kind of have hopes for the project," he said, "it looks like it’s being put on hold." Because of the developers’ request, the recently approved amendments to the Turnpike Authority’s lease agreement with the developers were withdrawn from the consideration of the Metropolitan Highway System Advisory Board on March 20. The amendments to the lease were part of a lengthy negotiation between the Turnpike Authority and the developers; when they were approved by the Turnpike Authority Board on Feb. 19, it seemed that the massive project was finally getting off the ground. The Highway System Advisory Board was to conduct a 30-day review of the lease amendment, before sending it on to the Patrick administration for final approval. The lease amendments included the deferment of the rent paid by the developers to the Turnpike Authority until the developers received a return on the project; a guarantee from the developers that the proposed four-block deck over the Turnpike would be built, at a projected cost of $220 million, with $50 million in reserve for potential increases in construction cost; and a $15 million Letter of Credit to be paid to the Turnpike should the developers default on that guarantee (See "Columbus Center Plot Thickens," March 6). At the moment, said Daniel, "Until an agreement is worked out on this issue between both parties, there is no sense in bringing the proposal before the advisory board this week." A spokesman for the developers said that they asked for the continuance because they are waiting on "clarification" regarding approximately $40 million in state grants and loans. Whether or not construction, which officially began last November, will continue depends on that clarification. "We’re still trying to get clarification from the state on its portion of the funding of the project, so depending on what that clarification looks like, we will make that decision," said Alan Eisner, spokesman for Winn Developers, the company behind the project. Eisner characterized the funds as an "essential component of the capital structure needed to solidify the project’s finances"; the $270 million guarantee that the developers made to the Turnpike Authority does not include those funds, but is made up of money invested by one of their partners, MacFarlane. The funds Eisner is referring to are the $20 million Massachusetts Opportunity Relocation and Expansion Jobs (better known as the MORE) grant and $20.6 million in loans from MassHousing. Though Eisner said the developer is depending on those funds, the MORE grant, which is designated for projects that benefit or improve publicly-owned infrastructure, in particular has not been guaranteed (see "Columbus Center Developers Are Counting on State Grant," March 20). Additionally, the grant doesn’t actually go to the developer, but rather is issued to the city of Boston, which can then reimburse the developers after the portion of the project involving public infrastructure is built. As of this writing, the developers’ application for the grant is still under consideration, according to a spokesperson with the Executive Office of Housing and Economic Development, which administers the grant. According to a representative of MassHousing, there were two separate MassHousing loan commitments made, $15 million in February 2006 and another $5.6 million in December 2006, neither of which have closed as of yet. At the point that the developers come to MassHousing and confirm that they are ready to close on the loan, the agency will then conduct a standard review of the application before issuing the loans. Asked if there was a possibility that the project would not be built, including the deck over the Turnpike, Eisner said, "We’re not saying that at this time. The only thing we’re saying right now is that we’ve asked for a continuance for up to 18 months and we are trying to get clarification from various state agencies on how and when state funds that were earmarked for the project will actually be available to be used." At the moment, however, construction on the seven-acre site appears to be on hold. Over the last few days, the site has been eerily quiet - some of the heavy equipment has been cleared away and few workers are left. The proposed complex stretches over seven acres of Turnpike air rights parcels and includes a 35-story high-end hotel, a complex of luxury apartments, and a 595-car parking garage. At this point, more than a decade after the project was first proposed, the total cost of construction has swollen from $300 million to $500 million and ultimately may cost as much as $800 million. The developers have asked for around $50 million in publicly subsidized financing, though when they had initially proposed the project, they promised it could be built without public assistance. As the cost of the project has ballooned, the public benefit to be reaped from it - the proposed parks and units of affordable housing - has remained relatively constant, at around $50 million. Linda Rodriguez can be reached at lrodriguez@southendnews.com
This article is part of our "Columbus Center" series. Want to read more?
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