Columbus Center is set to build
State considers giving additional $10m to long-delayed project
By Thomas C. Palmer Jr., Globe Staff | October 5, 2007
Following a decade of planning and marathon battles over its pros and cons, the $800 million Columbus Center hotel and residential project will start construction next week above four blocks of the Massachusetts Turnpike in Boston, the developer said yesterday.
And despite criticism of the tens of millions of dollars of public funds already given to Columbus Center owner WinnDevelopment, two executives familiar with the project who asked not to be identified because the state has not yet disclosed the deal, said the administration of Governor Deval Patrick has agreed in principle to provide an additional $10 million in state aid.
The money would be in the form of a "contingency" loan, these executives said; WinnDevelopment would have to repay the state before it can realize any profit on the initial investment it has so far sunk into the project - around $40 million.
A spokeswoman for Dan O'Connell, secretary of Housing and Economic Development, said the state is still reviewing a request for the $10 million. "No final decision has been made on the Columbus Center project," said Kofi Jones, though one is expected soon.
Meanwhile, the Boston Redevelopment Authority yesterday sent out letters to neighborhood representatives informing them construction would go into high gear soon.
Preconstruction work has been going on for weeks, and a drilling machine, to install concrete piles that will support the buildings over the roadway, is scheduled to arrive Tuesday.
Affordable-housing developer Arthur Winn and partner Roger Cassin, WinnDevelopment's principals, this summer received a separate $10 million state grant, and pleaded that they needed another $10 million grant to kick the long-delayed project into construction.
Critics, including House Speaker Salvatore DiMasi, object to a luxury hotel and residential project receiving public funding and have said Columbus Center should stand on its own.
The Legislature turned down Columbus Center's earlier request for $4.3 million in state economic stimulus funds, after project opponents argued that the developers had promised they would not seek any public funding. Boston officials, who have supported the project, say Winn and Cassin never made such a promise.
This week, Winn spoke of the long battle to get Columbus Center started.
"This took a lot of time and effort and a stupendous amount of capital. It's a watershed Turnpike project."
Asked about the continuing opposition and decade of delays, Winn said, "I like to think it's an improved project."
As currently planned, Columbus Center is a 1.45-million-square-foot, six-building complex that includes a 35-story hotel plus residential housing, retail space, parking, and public parks.
It has long been a target of neighborhood critics who argued that Columbus Center is too big and would be too disruptive to the Back Bay and South End, which it is designed to sew together over the highway that now divides them.
And, it almost died from rapidly rising construction costs - from a $300 million budget to the current $800 million - and a slowing residential market.
"It's great a project of this magnitude can be executed by a local developer," said Ronald Druker, a Boston developer who has known Winn for 30 years. "I'd say with great certainty someone from out of town wouldn't have shown the staying power and dedication to see something like this through."
WinnDevelopment is the managing partner, but with a minority financial position, in an ownership group that includes the California Public Employees Retirement System and MacFarlane Urban Realty Co. LLC, which invests in large urban projects nationwide.
Anglo-Irish Bank is providing a construction loan of more than $500 million to finance the project, which is expected to take three years to complete. The developers are negotiating with two companies for what Winn said would be a five-star hotel.
In total, Columbus Center will receive $27 million in grants and tax forgiveness, and at least $48.1 million in below-market-rate loans.
"They must feel comfortable they're going to get whatever financing they've lined up," said David Crowley, former president of the Ellis South End Neighborhood Association, where the project is located.
"The neighborhood would like to see it resolved - either move forward and build it or put it out to competitive bidding," said Crowley, whose organization worked with the developer to make changes such as adding park land.
Columbus Center will be built largely on a concrete deck over the Turnpike that developers say will cost about $140 million to build.
Columbus Center includes 450 condominium residences, with 44 to be sold at below market rates. The project is also paying the city enough for another 22 affordable housing units to be built elsewhere in Boston.
The project includes an estimated $60 million in public benefits, including the affordable housing, parks, and groundwater replenishment systems, and is expected to create 360 permanent jobs and bring at least $9 million annually in taxes.
Thomas C. Palmer Jr. can be reached at
tpalmer@globe.com.