NorthPoint buyer backs off. Archon letter stirs investor fray
By Scott Van Voorhis
Saturday, February 9, 2008
A New York investment firm is playing hardball in talks to buy the troubled NorthPoint project, casting a cloud over plans for the largest single development ever proposed in the Boston area.
In a letter sent Jan. 17, Archon Group said it was terminating a $177 million-plus agreement to buy plans and land for the 40-acre-plus city within a city in industrial East Cambridge.
Just a week before, Archon, the real estate investment arm of Wall Street firm Goldman Sachs, had executed a purchase and sale agreement for NorthPoint, court documents state.
Archon?s move, meanwhile, has triggered a fresh round of battling between the project?s investors.
Citing Archon?s letter, a group of minority investors in the project has filed suit. The group of prominent local development executives, Cambridge North Point LLC, contends the project?s majority investor, Boston and Maine, violated the terms of an earlier agreement by failing to wrap up the Archon deal.
Cambridge North Point wants to transfer ownership back to a development entity it has a significant stake in, while hiring a new marketing firm to sell the property, documents show.
?It?s unfortunate. You have two sellers that can?t get along,? said one executive familiar with the talks.
The suit is just the latest in months of legal wrangling that has threatened to sink a landmark project that not long ago appeared ready to finally move forward after years of planning.
However, David Fink, president of Pan Am Railways, the umbrella company for NorthPoint owner Boston and Maine, called Archon?s move a ?negotiating ploy.?
Archon opted to pull back because it did not want to commit to paying an $8 million deposit yet, Fink contends.
Given the uncertain real estate market, Fink contends the best thing to do is to push ahead with Archon.
?I don?t think property values and real estate values are going up at the present time,? Fink said.