Hynes Site to Make Wholesale Changes?
August 6, 2007
By Thomas Grillo,
Reporter
Retail Seen Easing Convention Center?s Deficit; Not All Brokers Are Convinced It Would Help
Retail to the rescue? Opinions differ as to whether adding shops and restaurants at Boston?s John B. Hynes Veterans Memorial Convention Center would be the answer to the facility?s persistent deficit.
While some brokers say converting a portion of the 400,000-square-foot building to retail will lure some of the nation?s best merchants, others are not convinced that eateries or boutique shops adjacent to the Prudential Center would be a slam dunk.
?Boylston Street is on fire,? said Thomas Brennan, vice president of C. Talanian Realty Co., a retail commercial brokerage that specializes in Back Bay properties. ?Just a few years ago there was talk that the area was going nowhere, but the Mandarin Hotel has dramatically changed the demographics. Retail and restaurants should do well in there.?
But Charles Perkins, president of The Boston Restaurant Group Inc., a Boxford-based restaurant brokerage firm, said unlike Newbury Street and its expansive display windows, the Hynes offers a wall of granite facing Boylston. That?s not exactly the most inviting setting to lure diners and shoppers, he said.
?If you can?t merchandise your wares, then you won?t build excitement,? Perkins said. ?That?s why tenants pay $100 a square foot on Newbury ? because they get those showcase windows.?
Following a study by a panel of Beacon Hill lawmakers, the Hynes Convention Center and Boston Common Parking Garage Commission recommended the addition of retail to reduce the Hynes? nearly $2 million operating deficit. The proposed 30,000 square feet of retail space will be located in three areas on the first and second floors of the facility. Two spaces will be along Boylston Street at one corner of the building adjacent to the Prudential Plaza and another at Dalton Street. A third location will be on the convention center?s second level.
Sam Hawkey, a broker for The Dartmouth Co., a Boston-based retail brokerage, said none of the fashion retailers his firm represents would consider that stretch of Boylston, which many call a ?dead zone.?
Theodore J. Chryssicas, a broker at Meredith & Grew, the Boston-based commercial real estate company handling the negotiations for Hynes, acknowledged that major changes to the building are not planned. They expect to have an entrance at Dalton Street, as well as the Prudential Plaza side, and perhaps install windows and awnings on each corner, he said. The details are still being worked out.
?Our biggest challenge is the lack of exposure on Boylston,? he said. ?But we intend to work with tenants and the convention authority to make something that will liven that stretch of the street.?
Chryssicas also noted that the Hynes space is not for every retailer. ?We can?t put in a Victoria?s Secret because it will not serve conventioneers,? he said with a laugh. And don?t expect a mattress store.
Still, Chryssicas said there is ?tremendous demand for the space.? While he declined to name prospective tenants, he said the Back Bay is the city?s most popular destination and ?every national restaurant is looking here.?
Hawkey, the Dartmouth Co. broker, said he submitted a proposal to Meredith & Grew on behalf of a 10,000-square-foot restaurant. He would not name the bistro, but said that quality eating establishments do not need to face Boylston Street.
Hard Times
Still, Perkins expressed skepticism. He said these are hard times for restaurants. While celebrity-chef establishments such as Gordon Hamersley?s Bistro on Tremont Street and Frank McClelland?s L?Espalier on Gloucester Street are doing well, many eateries are struggling.
Outback Steakhouse has seen sales decline for the past two years, Applebee?s sales have been down three years in a row and The Cheesecake Factory?s sales were off 8 percent last year, Perkins said. Applebee?s opened at the rear of the Prudential Center but closed after 18 months, he noted.
?If you?re planning to open a restaurant in Boston you need a celebrity chef, a killer concept like the Parish Caf? or the Rattlesnake Bar & Grill, or to be a recognized brand,? Perkins said.
The other factor that officials may not have considered is that the neighborhood may oppose another bar, he added.
?When the Mandarin Hotel opens next year, there will be 1,100 barstools along Boylston including the Cactus Club, Pour House and Foggy Goggle and when they close at 12:30 you get lots of drunks and horseplay,? Perkins said. ?Buyers who paid $2,000 per square foot to live at the Mandarin won?t put up with that bull.?
The Hynes is one of four properties owned by the Massachusetts Convention Center Authority. The agency also owns the Boston Convention & Exhibition Center, the MassMutual Center in Springfield and the Boston Common Garage.
But the Hynes has had a troubled financial history. In 2001, the MCCA received $17 million from the Legislature to cover the operating and capital needs of the facility. Last year, that number swelled to $23 million.
State Rep. Antonio Cabral, a New Bedford Democrat who served as co-chair of the 12?member bipartisan advisory panel, said convention centers often lose money, but generate millions in the local economy as conventioneers eat and shop in Boston. ?The Hynes is a loss leader, but we think this is a realistic plan to help erase the state subsidy,? he said.
In April, the MCCA said it planned an $18 million renovation of the center. If approved by the Legislature and Gov. Deval Patrick, it would be the first major renovation of the complex since it opened as a convention center in 1988.
The Hynes was built in 1965 at 900 Boylston St. A portion of the project was built on air rights above the Massachusetts Turnpike. It became a campaign issue when Mitt Romney was a candidate for governor in 2002. At the time, Romney called upon the Legislature to sell the Hynes as the city?s newest convention center in South Boston was under construction. The Legislature established a commission two years later in the wake of a budget crunch on Beacon Hill to examine options.
Romney proposed transferring ownership of the Hynes and the Boston Common Parking Garage to the state pension account, in lieu of making its $145 million annual payment to the fund. But state Treasurer Timothy Cahill who oversees the fund rejected the transfer, saying that his office manages money, not property.
The introduction of retail space could generate up to $1.5 million annually, reducing the amount of required subsidy and bringing it closer to having a convention center that breaks even or turns a profit, according to James Rooney, the MCCA?s executive director.
?It is a bold idea, but it is our goal to reach that point within five years,? Rooney added.
