Re: Filene's
http://www.bostonherald.com/business/general/view/20100803mayor_nixed_filenes_alternative/
Mayor nixed Filene?s alternative
By Thomas Grillo and Richard Weir
Tuesday, August 3, 2010
Developers pitched a potentially sensible alternative to get the stalled Filene?s project going again in Downtown Crossing, but the idea went nowhere fast last January because it didn?t pass muster with Boston?s mayor, according to newly released e-mail exchanges.
John Hynes, head of Gale International, floated the possibility of jump-starting the block with a scaled-down, $100 million plan that would bring back retailer Filene?s Basement but hold off on a 34-story residential tower. The original, full-size project?s price tag was $700 million.
?It should be cast as ?Phase 1? and could put us in a position to just keep going and complete the tower,? Hynes wrote in a Jan. 5 e-mail to John Palmieri, director of the Boston Redevelopment Authority, obtained by the Herald through a public records request.
In a quick reply, Palmieri noted the concept ?may make sense.? But just a day later Hynes e-mailed the BRA chief to report he?d already received the summary judgment from the city: ?I heard from (BRA spokeswoman) Susan (Elsbree) that the Mayor did not actually embrace the interim program. Oh well.?
The e-mail exchange came between the 2008 economic meltdown that put a freeze on construction financing, and the 2010 meltdown of relations between the developers and Mayor Thomas M. Menino.
In March, Menino threated to seize the site through eminent domain, accusing Hynes? partner, New York-based Vornado Realty Trust, of deliberately stalling the project in attempt to secure city funding.
Yesterday, Menino defended his decision to nip in the bud Hynes? alternative proposal of a two-story retail structure above Filene?s Basement and three levels of underground parking.
?A garage is a money maker for the developer, not a money maker for the community,? he told the Herald at an event in Brighton. ?A garage is not good for Downtown Crossing.?
The trial balloon floated by Hynes included a request for $25 million in bond funds from the city and mentions the possibility of another $25 million from the state.
?I can get my guys to invest the $25 (million),? Hynes wrote, referring to Vornado. ?The Governor will get on board too for 1/2 of it I?m sure (he could use some good PR too and this would do it).?
Providing a window into the power Menino wields when it comes to city developments, Palmieri asks whether Hynes has the support of the Patrick administration. In response, Hynes writes, ?I believe the state will do it . . . if Mayor wants it.?
Palmieri said yesterday that while there may be some city money available, Hynes must first line up investor cash and state funds.
?I?ve told John that he needs to tell us he has firm financial support from Vornado and other public entities and that he?d like the city to fill the gap,? Palmieri said.
In a recent development on Filene?s, the Argenta Group, a Texas-based private equity firm, met with Hynes and the BRA last month about the possibly of investing in the project.
?If Argenta can demonstrate they have the cash and we can come up with a loan transaction that works, there?s a possibility of making something happen,? Hynes said yesterday.
