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Banker & Tradesman - April 14, 2009
Solo Bid By Boston Museum A Potential ?Disaster'
By Paul McMorrow
Banker & Tradesman Staff Writer
Today
Real estate observers are closely watching today's deadline to see if the Boston Museum is the only bidder on the 29,400-square-foot Parcel 9 in downtown Boston, owned by the Massachusetts Turnpike Authority and fronting the Rose Kennedy Greenway.
The Boston Museum has already made its bid public. But the telling moment comes today, when Turnpike officials unseal potential bids from the Boston Museum's competitors - or, alternately, reveal that the economy has rendered their site all but worthless.
"It would be an absolute disaster for the Pike," one local real estate player told Banker & Tradesman, speaking anonymously because the bidding process remains active. "If they're the only bidder, and they have no money, it means there's no value for the property at all."
The Boston Museum turned to Parcel 9 more than a year ago, after a multi-year effort to build atop some neighboring I-93 onramps proved prohibitively expensive. Parcel 9 was seen by the museum's leadership as a cheaper alternative.
Turnpike Executive Director Alan LeBovidge recently questioned the museum's ability to build the $120 million facility it envisions for Parcel 9. "Show me the money," LeBovidge told the Boston Herald. He noted that the museum had raised just $7 million for the project and asked, "Can they put together a financing package? I have no idea."
"It's an impossible site," the real estate source said. Restrictive zoning and an awkward triangular footprint will make it hard for any private developer to recapture the value of the land, which is assessed by the city of Boston at more than $5.5 million. "You're going to spend money to bid, and then to build, and you can only build five stories - what can you do with that?"
The Turnpike's real estate offerings have generated mixed results lately. It will soon name a winner in the bidding for Parcel 7, a Greenway garage and office complex that attracted bids from WinnDevelopment and Pennsylvania-based hoteliers Hersha Developers. But the Pike was forced to extend the bidding deadline for 11 Turnpike service plazas by a month after the offering attracted scant interest. The new deadline for that offering is April 24.