Citizens Bank is the latest tenant to commit to retail space at Lafayette Corporate Center in Boston’s Downtown Crossing district.
It has been circling above for some time, but at long last, the Phoenix may finally be landing in Boston’s Downtown Crossing.
Given that millions of people course through the bustling district annually, and retail rents in some shops are among the highest in the city, one could hardly describe Downtown Crossing as anything close to a pile of ashes. At the same time, efforts to revitalize a number of underperforming locations are finally bearing fruit, while the pending opening of the $475 million Millennium Place complex is further expected to bolster the area in the coming year.
“We’re encouraged,” said retail broker Michael Schaffer of Schaffer & Assoc. Downtown Crossing “is definitely headed in the right direction,” he said.
Schaffer and colleague Joseph Levanto are active participants in the turnaround, responsible for leasing approximately 80,000 square feet of retail space along Washington Street at the site of the defunct Lafayette Place Mall. Although that 1980s-era development proved among the most disastrous retailing models ever seen in the city, Philadelphia-based Amerimar Enterprises has successfully repositioned the property as a mixed-use complex, with State Street Corp. and Massachusetts Financial Services now occupying the upper levels as office space and the ground floor to be leased to retail tenants.
Following up on a 10,000-square-foot deal with Eddie Bauer, Citizen’s Bank has recently signed a lease to take 2,600 square feet on the Avenue de Lafayette side of the building, while Schaffer said the landlord is also close to a deal with a local restaurateur to lease a substantial portion in that section. Lease negotiations are now under way with tenants who could take the remainder of the available space, Schaffer added, although he declined to offer names or a timetable.
Activity is also brisk around the corner, where there truly is a sense of rebirth underway at 55 Summer St. Barely four months after New Jersey clothier Syms Corp. retreated from the property in the wake of a failed multilevel operation, CVS Corp. has begun work on a 14,000-square-foot drugstore that will take over the first floor of the prominent property. It is slated for opening later this summer, according to a CVS spokesman.
Despite the problems encountered by Syms, which cost the firm millions of dollars to close the store and buy out of its long-term lease with the H.N. Gorin Co., retail broker Mark Browne of Browne Realty Advisors said he believes the site works well for retail. Browne, hired by owner Rosalind Gorin to retenant the property, maintained that Syms was simply the wrong fit for the space, noting a rash of interest for the retail offering once the company vacated in November.
Sources said Walgreen’s Drugstore had also chased after 55 Summer St., even though the firm already had a signed deal to go across the street to 7 Winthrop Square. While Browne would not discuss details, he said CVS was “aggressive” in pursuing the 55 Summer St. opportunity, partly fueled by the strong success of a smaller operation currently sited at 52 Summer St.
“It’s a very good deal for the landlord,” said Browne.
In the meantime, Gorin is also negotiating with several office users to lease the upper levels of the building as office space. Although some previous deals fell apart in the late stages, Gorin said there continues to be strong interest in the space. She cited the property’s central location, ample window lines and higher-than-normal ceilings as leading draws.
“It is great space and we will do well with it,” said Gorin. “I think we will be announcing some new leases very soon.”
Aiding in the transition was the hefty buyout of the lease from Syms, one which is helping finance the renovations and should make Gorin’s $19 million purchase of the property look even better long-term. Neither she nor Browne would discuss the buyout, but Syms reportedly paid several million dollars to escape the lease. The firm did announce a $10.5 million charge in the fourth quarter of 2000 related to the Boston store closing, but the shuttering of several other stores was also included in that figure. Syms officials did not return phone calls to discuss the matter.
Head to Head
As for Walgreen’s, a company spokeswoman acknowledged last week that the firm has agreed to take just under 5,000 square feet at 7 Winthrop Square. Carol Hively declined to say whether the firm had pursued 55 Summer St., but said the Illinois-based company is “looking forward” to establishing a presence in Downtown Crossing. At present, CVS is the only drugstore in the district, operating from three different locations within a few blocks of each other.
As the nation’s largest drugstore chains, CVS and Walgreen’s are longtime rivals. Walgreen’s has more than 3,300 stores nationally vs. 4,000-plus for CVS, which is headquartered in Rhode Island. “They are the industry leaders, and they do go at it all the time,” said Bruce D. Kaufman of Finard & Co. Schaffer, who helped broker a Walgreens lease in the Back Bay several years ago, added that he expects the chain will try to seek other locations in Downtown Crossing to blunt the CVS dominance.
In any event, 2001 does look promising for Downtown Crossing. Schaffer said he is especially enthused by the imminent arrival of H&M to the former Woolworth’s store on Washington Street. The space has been substantially vacant since Woolworth’s departed in the mid-1990s, but a new development group that is adding an office building to the property successfully convinced Swedish-based H&M to lease 30,000 square feet on the ground floor.
Schaffer said H&M brings a level of excitement to its retailing concept, employing music and other dynamic approaches to their stores. The company sells its own brand of clothing at low prices, said Schaffer, who predicted the store will invigorate those in the surrounding blocks.
“It’s going to be thrilling for everybody,” Schaffer said. “As much as Syms was a disaster, they will be that much of a hit.”
