Delays and cancellations of air traffic have always been the leading issues for proponents of a new runway at Logan International Airport, but as the debate continues to slog through a political quagmire, those maladies are apparently extending into the nearby commercial real estate market as well.
According to property owners along Route 1A, the main airport thoroughfare from the north, several development projects have been held up – or nixed completely – now that the runway controversy has entered a long-term holding pattern. The owners of Suffolk Downs Racetrack said last week that two separate proposals for adjacent land sites have been shot down, for example, while owners of East Boston industrial sites say the situation has clouded the future growth of that sector.
People don’t know what’s going to happen [with the runway], Hall Properties official Steve Wheeler told Banker & Tradesman last week. It’s just hard right now to say how long it’s going to take.
Wheeler, whose firm owns and operates Suffolk Downs, said Spaulding & Slye has relinquished control of a 25-acre site it had agreed to acquire last year, upon which the firm planned a multibuilding industrial/warehouse complex. Meanwhile, a proposed 250-room hotel that would have been built at the racetrack’s entrance on Route 1A has also been quashed, Wheeler said.
I’m sure it’s totally dead, Wheeler said of Ocean Properties Ltd.’s plan to build a Sheraton Hotel on the parcel. And while Spaulding & Slye spokesman Steve Steinberg said last week that the Suffolk project is status quo, Wheeler said the option on the land has expired, and as far as Hall Properties is concerned, so has the Spaulding & Slye proposal.
Ocean Properties Vice President Richard Ade insisted last week that his firm’s interest was not as advanced as some previous reports had suggested, maintaining that while the New Hampshire-based firm had looked at the property a while back, it never pursued a formal plan. In either case, Ade stressed that Ocean Properties is bullish on the area’s hospitality market, so much so that it has entered into discussions with city officials over a potential hotel for a site abutting Ocean’s existing Holiday Inn at 225 McLellan Highway (aka Route 1A) in East Boston.
Our intention is to do something there, but we’re really just in the planning stages now, Ade said of the eight-acre parcel, adding that, it’s definitely a great location.
Indeed, despite the gritty industrial nature of the Route 1A landscape, hotel development has been the most successful product type moving forward of late. Just on the other side of Bell Circle in Revere, for example, Saunders Hotel Group is underway with a 10-story Comfort Inn, a property being built next to a warehouse and intermingled with gas stations, auto body shops and an adult bookstore. Closer to Logan, Suffolk Construction Co. last week completed demolition of a former oil company headquarters on Route 1A. The property, situated next to a freight forwarding company and located in a sea of oil tanks, will be resurrected as a Hampton Inn.
Air Cargo
Minus the hotels and occasional donut shop, the two miles of Route 1A closest to Logan continue to be dominated by industrial uses, mostly freight forwarding companies that need immediate access to the airport. According to Mark Stevens of the Stevens Group, such companies resisted one property he recently had available that was just a few streets off Route 1A. Rental rates tend to be higher for industrial space along the roadway, he said, making it almost exclusively populated by such air cargo operations.
It’s such an in-and-out operation, they have to be very location-sensitive, Stevens said. The closer you are to the airport, the better.
Given that, most of the available distribution space is occupied, although Weld Management is advertising a 12,000-square-foot swath at its 440 McLellan Highway facility, which is dominated by air cargo companies. William Clark of the Clark Co., leasing agent for the site, said that there are already four or five such firms vying for the space, predicting that we should lease that up very shortly.
Clark has a more challenging goal at an abutting site, upon which Weld Management is obtaining final approvals to build a 150,000-square-foot industrial/office building. Located on land owned by the Massachusetts Port Authority, Clark said the effort has been slowed while the developers receive Massport and neighborhood approval, but he said it appears that the permitting process is finally nearing the end. If so, construction could begin within a few months, with a completion sometime in early 2001.
As with the existing space at 440 McLellan Highway, Clark said a lot of interest has been generated for the new building, although he acknowledged that the runway situation has created some uncertainty. At present, several hundred thousand square feet of distribution space at the airport is in limbo, with a need to relocate companies from those buildings should the runway move forward. Although Clark would not speculate, some observers cite the runway as the main reason behind the Spaulding & Slye project fading from the drawing boards.
Even if that were the impetus, Clark said he is bullish about 480 McLellan Highway, noting that the few available land sites along Route 1A are being converted to higher uses such as the hotel activity. Between the strong economy and limited supply, Clark predicted that the venture known as the Logan Air Commerce Center will soon be built and occupied.
Strategically, we’ve got a great location, and we think the momentum is there, Clark said. It has been a slow process, but we are finally moving forward.
