A sweet deal is apparently about to become even sweeter.
Less than six months after making a multibuilding purchase in Boston’s Fort Point Channel area that some consider the steal of the year for commercial property sales locally, Beacon Capital Partners is seeking to add 1 million square feet of new space to the seven-acre parcel, industry sources told Banker & Tradesman last week.
“It’s going to be something,” one source said of Beacon’s plans to transform a dilapidated swath of brick warehouses into a bustling mixed-use complex. “It will change that whole area.”
The Beacon effort comes as the city begins a final push to move several developments planned for the 1,000-acre Seaport District off the drawing boards. Many of the projects, most notably the 3.4 million-square-foot Fan Pier proposal, have been mired in controversy over their size and potential impact on the emerging area, currently a blend of warehouses, industrial uses and parking lots.
The Seaport District was a popular topic at last week’s Build Boston program, held conveniently in the heart of the neighborhood at the World Trade Center. With more than 11,000 building professionals on hand, including thousands of architects and urban planners, a number of forums focused on the ongoing planning process. The Municipal Harbor Plan, which would establish development guidelines for the district, was dissected during one discussion, for example, while the Boston Society of Architects also sponsored a panel outlining and updating specific projects.
At the latter event, moderated by architect Marc Margulies, Boston Redevelopment Authority official Homer Russell briefly touched on the Beacon proposal, although he was unavailable afterward to elaborate. Russell said three architectural firms have been retained by Beacon to design the ambitious renovation and expansion, adding that “we’re looking forward to a great project.”
Beacon spokesman Alex McCallum later confirmed that Sasaki Assoc., Bruner Cott and CBT/Childs Bertman Tseckares are working on various aspects of the redevelopment. Sasaki will take the lead in site planning, civil engineering and exterior landscaping, McCallum said, while Bruner Cott will renovate the existing structures. CBT has been hired to design an underground garage and a mid-rise building to be developed on top of the parking facility.
When asked about the overall scope of the project, McCallum would only say that “it is still in the process of being finalized.” The private real estate investment trust has yet to file a formal proposal with the city, but company officials did recently meet with BRA Director Mark Maloney, and sources said Beacon is close to beginning the planning process.
Beacon acquired the 14 buildings from the Boston Wharf Co. in June for $44.9 million, or about $54 per square foot for the 833,000-square-foot portfolio. While the properties are in need of substantial repair, some observers were amazed at the low price for which Beacon obtained the buildings, with some claiming the assets could have fetched upwards of $100 million. If another 1 million square feet were added, that would bring the per-square-foot cost down to $24.
“Quite simply, the baseline purchase was excellent by itself, and the [additional space] adds significant value,” said one Boston investor familiar with the properties. “It’s a great buy for Beacon.”
According to another source, the parcel’s configuration presents “a unique opportunity” to transform an entire block into a self-contained complex of housing, office and retail uses. Along with a roadway known as Midway Street that separates two stretches of warehouses, the parcel backs up to the $700 million Boston Convention Center that is just now moving into construction.
Art of the Deal
With no formal proposal, BRA spokeswoman Susan Elsbree said the planning agency cannot comment on the matter at present, but said the main points made to the developers by Maloney were the area’s 150-foot height limit for new buildings and the BRA’s interest in adding to the city’s housing stock. Another hope, Elsbree said, is that Beacon work with local artists to make sure they are not pushed out of the Fort Point section of the Seaport District.
“We are trying to help [the artists] any way that we can,” Elsbree said. “They add life to the culture down there, and they were in there when nobody else wanted to be.”
A coalition of artists’ groups has been in discussions with Beacon to see whether the company would sell off a portion of the existing buildings, but it is unclear whether those talks are continuing.
Vivien Li, executive director of The Boston Harbor Association, said she had not yet heard of Beacon’s intentions. While reserving final comment until after the plans are presented, Li did say the scope of the proposal could be a concern, considering potential impacts on traffic and how it would affect nearby residents.
“If they are talking about a million square feet, that’s a lot more than anyone ever envisioned,” said Li. “We would clearly have to take a look at what the impacts would be.”
Indeed, one of the common themes regarding the Seaport District during Build Boston was the ability for the area to cope with traffic and other complications resulting from proposed developments. During the discussion moderated by Margulies, Russell vehemently denied that the addition of 17 million square feet of new space anticipated for the Seaport District would overwhelm a new transit line now under construction. While it is a large block of space, Russell said it would be developed over 25 years, allowing for transit upgrades as the area matures.
Margulies said he believes Build Boston presented a rare opportunity for the building community to focus in on such a massive undertaking as transforming the district. He is a member of the BSA’s South Boston Waterfront Focus Team, a committee which meets regularly to review the Seaport planning and make recommendations on what direction it should be headed.
“It’s absolutely fascinating,” Margulies said. “I can’t imagine a more intellectually challenging professional discussion about what makes for a great city, because what we are really doing here is building a whole city out of nothing.”
Despite that, Margulies also said he believes the city has not been as receptive to the BSA’s efforts to weigh in on the initiative, adding that “it is too bad we haven’t been able to move the process along more successfully.”
Elsbree disputed the notion that the BRA has shunned the architectural profession in formulating its plans, noting that a group of 20 architects recently submitted an unsolicited letter backing the Fan Pier project. She also maintained that the city has done its best to garner input from all areas.
“Our process is open, well advertised and inclusive,” Elsbree said. “To say we haven’t reached out to people after two and a half years [of discussion] on the Municipal Harbor Plan seems a little disingenuous.”
