Boston Mayor Thomas M. Menino (right) and City Councilor William Linehan visit the Columbus Center construction site.
Despite financial setbacks and a work stoppage, Columbus Center’s developer says the $800 million project is not dead.
“We have no intention of abandoning it,” Roger Cassin, managing partner of WinnDevelopment, told Banker & Tradesman in a rare interview. “We have serious impediments to overcome, but we’ve invested more than $100 million in it and we’re not going away.”
At stake is the controversial, 1.3 million-square-foot mixed-use development to be built on a 7-acre deck above the Massachusetts Turnpike straddling Boston’s Back Bay, South End and Bay Village neighborhoods. The project consists of 443 condominiums, a 162-room hotel, three parks and 39,400 square feet of retail space. After a five-year delay, construction began earlier this year, but funding woes have brought construction to a standstill.
Last week, Banker & Tradesman reported on its Web site that MassHousing, the state’s affordable housing bank, would not close on a pair of loans totaling $20.6 million for the project. The money would have been used to leverage 44 affordable condominiums in the mixed-use project near the turnpike entrance by Columbus Avenue and Arlington Street.
The decision by the quasi-state agency followed the Patrick administration’s withdrawal of up to $20 million in Massachusetts Opportunity Relocation and Expansion Jobs Capital (MORE) grants for the development.
In a prepared statement, the agency said, “MassHousing has considered the commitment of public money from the state crucial to the success of Columbus Center. When the state withdrew its commitment of MORE money, we felt we could not proceed with closing the MassHousing loan. MassHousing will continue to assess the situation at Columbus Center.”
Thomas R. Gleason, MassHousing’s executive director, declined repeated requests for further comment.
“It’s a ripple effect,” said Boston Mayor Thomas M. Menino, who remains a strong supporter of the project. “When the governor said he would not provide the MORE grant, MassHousing said they won’t do their part. But if the governor changes his mind to provide the funding, MassHousing will follow.
“Still, it’s unclear to many observers why the lack of $40.6 million in grants and loans could derail a project that could have a price tag of nearly $1 billion if it’s completed,” the mayor added.
‘A Perfect Storm’
Cassin offered the following explanation.
“It’s a perfect storm of negative events,” he said. “Everybody wanted to be the last money in, so nothing was closed; it’s all in limbo. We are spending $5 million a month on this and I thought we had hit our stride. But none of the state monies have been nailed down and that’s in the face of the capital markets window shutting, and the private funders are saying they’ve got a fiduciary obligation. So we have the unfortunate result of suspended construction. I’m trying to get everybody together and see if we can’t resurrect this thing.”
Cassin was expected to meet late last week with private and public funders to get the project back on track, he said.
Menino met with a carefully selected group of neighbors at the construction site last week that did not include any opponents. Some neighbors have insisted the project is too dense and that Cassin has reneged on a promise not to seek public financing.
“I still think it’s a great project,” said Menino. “It fills in a hole in our city, brings jobs and tax revenues. The development makes a lot of sense for this community. It’s the right deal at the right time. Right now, there’s all kinds of uncertainty, but Roger Cassin is a good developer and a good guy. It’s just that the project is out of hand and we need to get it back into focus to figure out where we are going with this.”
Despite the fact that five years have lapsed since the Boston Redevelopment Authority approved the project, the BRA’s director, John Palmieri, said Cassin needs more time to secure the financing.
“It’s a complicated development with multiple sources of funding, grants, state monies and tax credits,” he said. “Costs have skyrocketed and this has exceeded anything the development community could have anticipated.”
Two of the project’s most vocal opponents, state Rep. Martha M. Walz and House Speaker Salvatore DiMasi, could not be reached for comment by press time.
