[size=+2]Nearing its end: What now for the Columbus Center site?[/size]
[size=+1]Officials believe a state-led clean-up is likely[/size]
by Tripp Underwood ? Wednesday Feb 17, 2010
Much like construction on the site, the Columbus Center website is no longer active. (Source: Tripp Underwood)
The ill-fated Columbus Center, a proposed six-building, $800-million-plus complex that would contain condos, a hotel, business offices, and retail shops in air space above the Mass Pike between Back Bay and the South End, may never be built-which may not surprise many after years of delays.
On Tuesday, Feb. 9, Massachusetts transportation officials told Columbus Center developers they are in default of their 99-year lease of the property for a number of violations, including failing to complete proposed building projects on time and maintain the construction sites to Department of Transportation standards.
Work on the long troubled development has been sparse since its inception 14 years ago, but there has been no official activity on the property since last fall when clean up of the area stopped abruptly.
Two of the lease-holders on the land slated for the project, Boston-based WinnCompanies and the California state pension fund known as CalPERS, have been given a month to present a plan to state officials that indicates they have a scheduled timeline to restart construction on the project. Failure to do so will result in a termination of their lease on the property.
Though foreclosure of the lease would likely be a fatal blow for the Columbus Center in its current from, it would be just one of many problems the ambitious project has endured over the years.
WinnCompanies first won designation rights for the project in 1996, then spent ten years expanding plans and submitting building proposals to city and state officials, all while looking for investors to help fund the project.
In 2006 CalPERS joined WinnCompanies as developers of the Columbus Center, and by October of 2007 construction on the center?s main deck-essentially a tunnel built under a foundation that would support the buildings as they towered above the Mass Pike-began.
Construction on the deck continued on and off for months, until it abruptly stopped for good in March of 2008. Ned Flaherty, a South Ender for the past 19 years who has closely followed the Columbus Center development since the beginning, believes the very visible construction work that took place during this time was little more than a ploy to attract investors, specifically those who might have been discouraged by the project?s slow development.
?With no owner funds, no government subsidies, and no bank loans, Winn?s managers spent $5 million of their own money each month, just to create an illusion of progress that might keep investors from bailing out, and keep bankers from refusing loans,? said Flaherty from his Clarendon Street home, directly across from one of the Columbus Center?s fallow construction sites. ?After only six months, the managers were broke, they hadn?t fooled any bankers or investors, the laborers left for good, the rented equipment was returned, and the site fell silent.?
MassDOT officials declined to speculate on the theory, noting that the agency?s grievances with developers were stated in the default letter. Neither WinnCompanies nor CalPERS returned phone calls from South End News.
Regardless of the construction?s legitimacy, the work done in that five-month period was never approved by the Massachusetts Department of Transportation and therefore was a direct violation of the Columbus Center?s lease.
According to the eight-page notice of default that MassDOT mailed to WinnCompanies and CalPERS on Feb. 9, developers had only received the necessary permits to move fiber optic cables in the area surrounding the Columbus Center?s construction sites and the tenants had ?exceeded the scope of the Work Permit by beginning preconstruction activities with respect to the deck.?
But unapproved construction wasn?t the Columbus Center?s only concern-the project?s growing budget and lack of progress and investors posed problems as well.
According to a 2006 grant application letter, the Anglo Irish Bank, a company that initially considered investing in the center, walked away from the deal after developers failed to submit a plan that met a series of prerequisites set by the bank.
Afterward, Governor Deval Patrick?s administration withdrew millions in public funding once it became clear the center lacked substantial private financial support.
Adding to the development?s fiscal woes, 2007 media reports cited the Columbus Center?s proposed cost at over $800 million, nearly $300 millions dollars more than initial estimates.
Flaherty said he believed that the project?s skyrocketing costs and a lack of physical progress may have scared off would-be investors whose added funds could have sped up production.
?In 2001 the proposed cost was $300 million, but by 2010 that grew to $850 million, plus a taxpayer bail-out via lots of public subsidies that have been rescinded,? he said. ?CalPERS is one of the biggest real estate developers in the world. If they couldn?t solve all these problems and muscle their own pipe dream into reality, then any smaller investor would be foolish to even try.?
Unfortunately for many local residents, while the project wallowed in financial limbo, sections of the city that had been uprooted during the initial building were left unattended, creating three dilapidated construction sites in the South End neighborhoods that lined the turnpike.
For nearly three years those who live along the proposed building areas have been subjected to construction eyesores such as haphazardly arranged wire fences, cement Jersey barriers, and various debris and litter strewn across the sites.
Third Suffolk State Rep. Aaron Michlewitz, whose district includes the South End portion of the development area, said the conditions created by the seemingly abandoned Columbus Center project are as ugly as they are dangerous.
?It doesn?t seem to be safe right now and visually it creates an element of disaster in the area,? said Michlewitz. ?The people that live right along the construction have to deal with looking at this on a day-to-day basis, and they?re the ones who have to face the issue of potential danger created by the disarray.?
Even if the state does repossess the air space it originally leased to Columbus Center developers, the fate of the area remains unknown.
Second Suffolk State Senator Sonia Chang-D?az, whose district includes the proposed Columbus Center sites, said building in the air space above the Pike could raise a lot of revenue in both income and property taxes, as well as create jobs for the Commonwealth, but believes that it should be done without passing the expenses onto taxpayers through government assistance or subsidies.
?We should look at economic opportunities that have the potential to benefit the city, but I have always been a skeptic of using tax dollars to subsidize a for-profit development there,? said Chang-D?az. ?In the case of the Columbus Center, I don?t think it was good use of taxpayer money.?
Before the state entertains any ideas for future developments in the area above the turnpike, both Chang-D?az and Michlewitz said they feel neighborhoods that were uprooted by the construction should be returned to their former condition.
?The first step is to get the area looking like it did before the developers moved in,? said Michlewitz. ?After that, I?ve always been supportive of building in that area above the Mass Pike, but it needs to be a project that is sustainable and viable. It?s obvious that Columbus Center wasn?t.?
While both officials agree that restoring South End neighborhoods to their previous state is a priority, who will pay for the clean-up remains unclear. The Massachusetts Turnpike Agency, which originally leased the property, failed to make a contingency plan with developers in the event the project shut down before completion.
Peter O?Connor, Director of the Office of Real Estate and Asset Development at the Massachusetts Department of Transportation, said while possible, it?s unlikely Columbus Center developers will begin to clean up anytime soon. In the meantime, O?Connor said it?s likely that the publicly funded MassDOT will foot the bill for the restoration upfront, then, if necessary, use legal action to force Columbus Center developers to reimburse the state for the work.
Chang-D?az said the cost of the clean-up should be the sole responsibility of Columbus Center developers, but supports MassDOT doing work in the interim because legally forcing the developers to act could take months.
?It seems like the fair thing to do for residents who are neighbors to the site and have been in limbo for years,? the senator said. ?They?ve had to deal with the loss of trees, and unsafe, unclean sites for so long, I think [an immediate MassDOT clean-up] is the fair thing to do.?
http://www.mysouthend.com/index.php?ch=news&sc=&sc2=news&sc3=&id=102437