: The John Adams Courthouse complex, home to the Suffolk County Superior Court. A jury there recently found against South End property owner Arthur Leon in a suit over opposition to a condominium development. iStock photo
When it comes to NIMBY opposition that derails plans for new housing, it’s not just the neighbors raising a stink.
Sometimes it’s rival developers worried about the competition.
Boston has a long history of rival developers feuding over projects. And while falling-outs among former partners are the most common, sometimes it’s simply a case of one property bigwig not wanting another to build next door for one self-interested reason or another.
The classic example of a NIMBY spat between developers remains one-time Seaport parking lot king Frank McCourt’s efforts a quarter century ago to derail plans by the billionaire Pritzker family to develop Fan Pier.
McCourt spent years sitting on a couple dozen acres of parking lots next door to what was then the also-undeveloped Fan Pier, with seemingly no interest in doing anything but collecting money from suburban commuters, much to the frustration of the late Thomas M. Menino, then Boston’s mayor.
Parking Lot King Stonewalls Pritzkers
But when the Pritzkers, who made a fortune with the Hyatt hotel chain, proposed building millions of square feet of housing and offices on Fan Pier, McCourt finally leaped into action.
Not to develop his own property, mind you.
Rather, McCourt proposed combining his swath of parking lots with the Pritzker’s waterfront holdings, with most of the buildings going on McCourt’s land while the Pritzkers’ Fan Pier land was turned into a park.
The Chicago hotel family – whose members include the governor of Illinois and the head of Harvard’s board – eventually bailed and sold Fan Pier to local developer Joe Fallon and the rest is history.
More recently there was the case, detailed by Banker & Tradesman’s Steve Adams, in which a developer appeared to have helped finance a lawsuit that delayed work by a rival builder on a planned North End hotel, according to testimony in that lawsuit, which was later dismissed.
The owner of a lot next to the planned hotel allegedly had hoped to acquire the site for his own purposes.
But I’d have to say that the efforts by Arthur Leon and JACE Boston to stop construction of a high-end condominium project takes the cake.
And now the major South End property owner finds himself staring at a $5.8 million court judgment for his years of alleged obstruction.
Developer Duel in South End
Earlier this month, a Suffolk County Superior Court jury found that Leon and JACE had abused Boston’s permitting approval process – and in one case the criminal justice system – in a bid to obstruct plans for a $20 million high-end condo building next door to one of their South End properties.
The attempt failed, but not before delaying plans for what are now the Jordan Lofts at 477 Harrison Ave., at one point driving the developer, John Holland, to the brink of bankruptcy.
The verdict capped more than a decade of dueling lawsuits over Holland’s ultimately successful plans to convert an older commercial building into loft-style condo units, which opened in 2016.
Still, complicating matters from the start, one of the walls of Holland’s Harrison Ave building was connected by a seam with that of Leon’s old Washington St. industrial building.
When Holland first informed Leon of plans to redevelop his Harrison Ave building – originally built in 1913 as stable for the old Jordan Marsh & Company – the fellow developer and property owner asked him to wait a year.
Leon claimed he had his own plans for a big mixed-use project, Holland testified.
In fact, Leon was particularly concerned about Holland’s plans to build pricey penthouses, arguing it would attract rich people who would then object to his plans to redevelop his own building, Holland testified.
$12M in Alleged Losses
When Holland refused, Leon and JACE pursued an everything-but-the-kitchen sink legal strategy, filing two successive Zoning Board cases while also dredging up an easement dating to the 1920s to prevent any change to the first two stories of the wall.
At one point, Holland also faced a criminal complaint, with Leon alleging that the developer had gained unauthorized access to the roof of his building at 1234 Washington St.
The claim was dismissed –with Holland making clear there was nothing to it – but by simply filing it in the first place, Leon endangered his bank financing for the project, Holland’s lawyers contend.
According to testimony by a cousin, Leon stated that he intended to drive Holland into bankruptcy and then buy his building at a bargain-basement price.
Scott Van Voorhis
Leon certainly appears to have come close. Holland was forced to undertake an expensive redesign of the project, while dropping plans to convert the second floor – potentially the most profitable – from commercial use to condos.
All told, Holland contends that the dispute with Leon and JACE cost him nearly $12 million, according to court filings. That includes more than $5 million in increased costs, $6 million from the loss of plans to convert the building’s second floor to residential.
“The evidence is overwhelming that the Defendants commenced three civil suits and filed an application for a criminal complaint for ulterior motives and illegitimate purposes — designed to stop the development of 477 Harrison to gain an advantage in their desire to develop their property or to bankruptcy,” lawyers for Holland argued in a court filing.
So there you have it – in Boston, even developers who should know better turn against new housing when it suits their purposes.
At least this time, though, it appears to have backfired.
Scott Van Voorhis is Banker & Tradesman’s columnist and publisher of the Contrarian Boston newsletter; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.
