City looks at taking Filene?s property
BRA chief declares downtown site blighted
By Casey Ross, Globe Staff | March 10, 2010
Boston officials asserted yesterday that the stalled Filene?s redevelopment meets the legal definition of a blighted property, which would allow the city to take control of the Downtown Crossing site and find a new development team that can move the project forward.
The declaration was the latest expression of Mayor Thomas M. Menino?s growing frustration with the Filene?s developers, who halted construction 18 months ago due to a lack of financing, leaving an excavated hole and the remains of skeletal buildings in the heart of Downtown Crossing.
The city?s top planning official, Boston Redevelopment Authority director John Palmieri, said his agency will spend two weeks charting the necessary steps to initiate a property taking. While a final decision has not been made, he said the condition of the Filene?s property easily meets the state?s requirement for such an action.
?It fits the quintessential definition of blighted space,?? Palmieri said. ?Eminent domain is a serious option we must consider at this point.??
Palmieri?s comments came one day after Menino accused Filene?s developers Gale International and Vornado Realty Trust of intentionally stalling the development to try to extract money from the city to help pay for the project. The mayor based his charge on a talk given last week by Vornado chairman Steven Roth, who told students at Columbia University that his firm pursued such a strategy on the redevelopment of another long-idled property, the Alexander?s department store in Manhattan.
Roth was quoted as saying New York-based Vornado stalled that project in the 1990s because ?the more the building was a blight, the more governments would want this to be redeveloped, the more help they would give us when the time came.??
Vornado?s Boston-based partner, John B. Hynes of Gale International, said yesterday that Roth?s comments are being taken out of context. He said the development team is still trying to locate financing in order to resume construction.
?It?s never been a strategy or the objective of the joint venture to create a blighted project in order to extract concessions,?? he said. ?That?s the truth.??
Neither Roth nor Vornado responded to requests for comment yesterday.
The development team had initially planned a $700 million mixed-used complex that included an 39-story tower above a restored Filene?s building. But when the credit crisis struck in 2008, commercial lending ground to a halt, leaving Filene?s and dozens of other major projects across the country without funds to complete construction.
But after reading Roth?s statements in The New York Observer, Menino said the developers can no longer use the economy to hide their real intentions to induce the city to provide public subsidies for the massive project.
The leader of a Downtown Crossing business association said she believes the mayor?s threat to take the Filene?s site by eminent domain amounts to a negotiating strategy, to pressure the developers to resume construction on the site.
?If the city has the ability to bring parties together as quickly as possible, I?m happy to see them do that,?? said Rosemarie Sansone, executive director of the Downtown Crossing Partnership. ?This situation should not continue to linger on.??
Palmieri said yesterday the city and the development team have been talking for months over whether Gale and Vornado should proceed with a smaller version of the project that might have a better chance of getting financed. He left open the possibility that the developers could still rescue the project if they agree to resume building soon.
?If the current development team steps up with a plan to honor their commitment, we?ll entertain that,?? Palmieri said. ?But our clear intention is to find another way to do this with another developer.??
Under an eminent domain taking, the city would have to pay the owners fair market value for the site, based on an appraisal of the property. The city would then solicit bids from other firms to the develop the property.
In addition to pursuing eminent domain, Palmieri said the city could simply allow the project?s permits to expire. Under city regulations, he said, the permits issued for the redevelopment would lapse in August.
Casey Ross can be reached at
cross@globe.com.
