Simon Property Group’s proposed 47-story Copley Place tower is seemingly on hold, potentially the latest victim of an economic crunch that has already toppled several would-be additions to Boston’s skyline, a Boston state representative told Banker & Tradesman today.
"I’d describe this as being on hold, based on what the [Boston Redevelopment Authority] has said to us," said Byron Rushing, D – Boston.
A community advisory committee meeting with the tower’s developers was recently canceled, Rushing said. The BRA e-mailed a note to committee members that said Simon needed more time to work on its draft project impact report "and to allow the economy to improve."
"I assume they’re talking about five years from now," he said. "Have we even bottomed out yet? If they used their words advisedly, I’m not sure when this will get started again … We were supposed to meet, it was postponed, and there’s no definite date [to resume]."
Simon, the nation’s largest mall operator, first floated plans to top their Copley Place mall with a tower in 2006. In March 2008, they filed a proposal with the BRA detailing plans for 300 luxury condominium units and 114,000 square feet of new retail, including a significant expansion to Neiman Marcus.
However, residential construction has been virtually impossible to finance since the global credit system froze up this past fall. Developer John Hynes recently removed the residential portion of his stalled Filene’s redevelopment because he believed it was keeping him from plugging a hole in his financing.
Twice in the past nine months, Simon CEO David Simon has said that mall operators will have very little leeway for new construction for much of the next decade. Last April, during Simon’s first-quarter earnings call, he said, in part "I do think we could have a decade of little retail development."
This past January, during his Q4 2008 earnings call, he reiterated that position.
"As I said a year ago, I don’t think anybody believed me, the new development business is dead for a decade," Simon said. "Maybe it’s eight years, maybe it’s not really completely dead. Maybe I’m over dramatizing it for effect but the odds are that there’s going to be very, very little new stuff for quite some time…"
Simon made those comments in the context of saying that his malls will be insulated from new competition for much of the next decade. However, it now appears that he may have been more prescient than he intended.
Neither Simon nor the BRA returned calls for comment.
