Turnpike gets a guarantee on deck plan
Developers promise Columbus Center work will be done
By Thomas C. Palmer Jr., Globe Staff | March 1, 2008
The Massachusetts Turnpike Authority board has secured a $270 million guarantee from the developers of the Columbus Center project that they will see the expensive four-block deck over the highway to completion.
The guarantee clears another hurdle for the project, which has been 11 years in planning and development, encountered monumental opposition, and finally went into construction only late last year.
Columbus Center is a 1.45-million-square-foot, six-building complex that will include a hotel, condos, and retail establishments, as well as public parks and open space. It will extend from Clarendon to Tremont streets over what are now exposed traffic lanes.
The project has ballooned to $800 million, and a tentative financing agreement for a construction loan for the project did not materialize. Construction loans have become more difficult to obtain in the last year, and the guarantee ensures that - even if the full project is not completed - the authority will have a finished deck over the highway that could be developed in the future.
In addition to the guarantee, the Turnpike Authority amended its air-rights lease with the developers, WinnDevelopment and MacFarlane Urban Realty Co., to clarify the ownership and purpose of the deck on which the mixed-use project is being built on the edge of the Back Bay.
That clarification - stating the deck will be owned by the Turnpike, leased to the developers, and created in part to benefit the public - was necessary for the developers to use $10 million in jobs-creation grants from the state.
The money could not be used unless it had a public purpose.
The new agreement still has a few steps to go before it is final, including being signed by the governor.
WinnDevelopment's chief executive, Samuel Ross, said Winn and its partner MacFarlane, a San Francisco real estate adviser that represents the California Public Employees' Retirement System, would try over the next two months to secure the initial $10 million job grant and a separate loan from MassHousing for $15 million.
The grants are from the Massachusetts Opportunity Relocation and Expansion Jobs Capital, or MORE, program and are given to communities to help develop infrastructure and create jobs that benefit the public.
Mac Daniel, a Turnpike spokesman, confirmed the board approval of the lease amendment, saying the guarantee for deck completion "was very substantial for the Turnpike."
The Columbus Center project has drawn extensive criticism in its long development life, over the height of some of the buildings and the effects it would have on surrounding neighborhoods.
Recently, critics have faulted the administration of Governor Deval Patrick for providing the developer with public money to build what will be a privately owned project.
One of the most prominent critics is House Speaker Sal DiMasi, who had not yet seen the agreement, according to a spokesman.
"I can say that the speaker continues to have concerns about public subsidy for these kinds of luxury condo complexes, and that public financing for a project like this should not exist," said DiMasi spokesman David Guarino.
Guarino said DiMasi believes the MORE job grants that the Legislature authorized "were supposed to go for far different use. That continues to be his serious concern."
Ross, of WinnDevelopment, said the lease amendment resolves "any concerns anyone had about the appropriateness of MORE grants for the Columbus Center deck."
He called the commitment of the developers to guarantee the deck "quite extraordinary."
The agreement includes the expected cost of the concrete deck, $220 million, plus a $50 million contingency if costs rise.
Ross said the developers plan to obtain additional financing to construct the buildings planned for the deck, expected to be completed in about a year.
