The last thing downtown Boston needs is another ugly hole in the ground.

So it’s not surprising then that the Harvard Club, one of the city’s top civic institutions, and the Eliot Hotel, a thriving boutique, are teaming up to stop plans for an outsized new retail and office project next door on Massachusetts Avenue.

The development team behind the plans is none other than Kensington Investment Co., which tore down the historic, Vaudeville-era Gaiety Theater on Washington Street earlier in the decade to make way for a new apartment and condo tower.

Sadly, the tower has gone missing, leaving only a giant hole in the ground just a short walk through Downtown Crossing from the site of the much better known Filene’s development fiasco.

Somehow Kensington has now resurfaced with City Hall’s apparent blessing, with plans to replace a low-slung string of buildings along Mass. Ave. with a 50,000-square-foot office and retail complex.

The project’s neighbors, the Harvard Club and the Eliot Hotel, have responded by going to state Land Court in a bid to pull the plug on Kensington’s permits.

A hearing is set for Dec. 4.

Competing Interests

While it clearly has large development ambitions, Kensington is actually headed by a local travel magnate, Alan Lewis, chief executive of Grand Circle Corp.

“The point here is you have two institutions that are each pretty important to the fabric of the city,’’ said Richard Bluestein, an attorney representing the Harvard Club and the Eliot. “They bring a lot of economic activity. You are talking about bringing 100 construction jobs, and that’s tremendous, but you don’t want to do that at the expense of two institutions that have 200 permanent jobs.’’

OK, I know what you are thinking, but this is not another NIMBY battle.

Both the Harvard Club and the Elliot are interested in seeing the neighboring strip of low-slung, student-dominated retail buildings redeveloped.

But both institutions have significant concerns about both the scale of Kensington’s proposal and whether the firm will be able to pull off its plans amid one of the worst downturns in generations.

The height is not a problem, with plans to add a couple floors staying within neighborhood height limits. But density is another issue, with Kensington proposing to build out much of the current site right up to the neighboring Eliot, according to Bluestein.

We are talking about a not insignificant construction project packed into a relatively small and constricted downtown site.

For both the Harvard Club and the Elliot, that could mean trouble, with the prospect of construction crews banging away on their doorsteps for months at a time, starting as early as 7 a.m.

In essence, it would have the feel of a “small earthquake,’’ the hotel was informed by construction experts it hired.

Shadowy Company

The new building, when it is finally constructed, also poses problems. It would cast the Harvard Club, which now enjoys a fair degree of natural light, into shadow. And it would obstruct the views of some rooms at both the Eliot and the Harvard Club.

Both institutions have tried to work out a deal with Kensington for a smaller, less intrusive project that would meet their needs, to no avail, Bluestein notes.

But there is also another, maybe even more compelling concern, and that relates to financing.

Given the stress the economy has put on developers, there is a natural concern on the part of these two well-respected Hub institutions about the ability of Kensington to actually finance and build the project it is proposing.

For his part, Bluestein said he is unaware of Kensington’s previous proposal for a tower on Washington Street that left a large hole in the ground.

But he indicated that learning of it far from eases his concerns.

The proposed, but yet to be built, condo and apartment tower, as well as the Mass. Ave. redevelopment project, are listed on Kensington’s website.

“We don’t know anything about what their specific marketing plans are, what their specific financing arrangements are,’’ Bluestein said. “We could end up with a shell of a building, or something of that vein, and that would be very bad for the neighborhood and for the Harvard Club and for the businesses next door.’’

Let’s be fair here. Kensington’s latest proposal to redevelop a strip of retail buildings is probably a lot more financially doable than the firm’s proposed, and so-far unbuilt, Washington Street tower.

You know, you’ve got to crawl before you walk and walk before you run.

Still, these are hard times, and even the most experienced, battle-hardened developers are struggling to line up loans for even the most basic projects.

So it’s not hard to see why the Harvard Club and the Eliot might be just a little bit nervous.