He is listed as chairman, but at the New Boston Fund, Jerome L. Rappaport Sr. insists he is not The Man.

Both revered and reviled for his part in Boston’s laborious transformation into a modern city during the 1950s and 1960s, the legendary developer can still be found at the Charles River Park mixed-use complex he carved out of the Hub’s downtown urban renewal district decades ago. But Rappaport maintains that things are much different now. Not only is the 48-acre park in the final stages of a lengthy selloff, he said that his sons, Jerome Jr. and James Rappaport, are the main drivers behind the burgeoning real estate investment company launched by the family in 1993.

“The story used to be me,” the elder Rappaport said in an interview last week at One Longfellow Place. “The story now is Jerry Jr. and Jim.”

Jerome L. Rappaport Jr. concurs with that outlook. While stressing that his father is still relied on for advice and insight, the son said he himself is responsible for day-to-day oversight of the company, which is currently in the process of wrapping up its fifth investment vehicle. Besides keeping busy in other activities, Rappaport Sr. understands the need for both his sons and other staffers to make their own way, Rappaport Jr. said.

“My father has done an extraordinary job of empowering my brother, myself and the senior management team,” he said. One innovation has been to vest senior managers and long-term employees into the investment funds themselves, improving longevity at the company and ensuring maximum effort from its key people.

“We feel that puts a little more bounce in people’s steps,” Rappaport Jr. said. “You just seem to get more energy from sharing the nickel.”

Such ideas were novel to him, Rappaport Sr. acknowledged, noting that, “in my time, it was pretty hierarchal.” Despite that, he agreed that it has helped in attracting and retaining industry professionals to the firm, allowing him to play a lesser role that is increasingly restricted to only major acquisitions or decisions.

“At the present time, the New Boston Fund is much more than me or the Rappaport family,” he said. “It is a … group of very bright people who is really making this work.”

Whatever the reason, NBF has certainly fared strongly in the real estate investment world, growing from the initial $9 million fund to the current effort, one expected to raise $200 million by year’s end. Since its inception, NBF has acquired 80 properties in the East and Midwest, the most recent being 33 Boston Post Road in Marlborough, a 107,000-square-foot office building picked up for $13 million. In 1999 alone, NBF completed 16 transactions valued at $257 million, and it now has 7.5 million square feet of space in eight states.

For the most part, the funds have been a combination of the Rappaport family’s own money and contributions from wealthy individuals, but the firm increasingly is turning to the institutional market. The $85 million New Boston Fund Four had institutional support, and Rappaport Jr. said it has two corporations contributing to the latest effort, as well as a New England state which is investing $15 million in pension fund money.

While such investors typically shy away from private groups, Rappaport Jr. said he believes NBF’s past performance – with yields in excess of 40 percent for each of the eight buildings sold to date – has helped attract institutional interest. Those results, he said, have been a combination of adding value to the properties, keeping senior management interested by their financial stake, and a policy of self-managing any properties in markets where they own more than 500,000 square feet of space.

“The institution has the passion of a family business, but they also have the infrastructure of a large, seamless bandwidth which is totally committed to the fund’s success,” he said. “This is the formula we bring to the table.”

Having Rappaport money in the mix is an important ingredient, he added, an outlook seconded by Boston investment specialist George J. Fantini Jr.

“The willingness to co-invest is absolutely critical, and they were one of the first folks to step up and say, ‘We will put our money where our mouth is,'” said Fantini. “That clearly makes a difference.”

An industry veteran who has observed both Jerome Rappaports over the years through their work at the Greater Boston Real Estate Board, Fantini said he is under the impression that the elder Rappaport is letting the sons guide NBF, although Fantini added he has never done any work directly with the company. Despite the long shadow cast by his father, Rappaport Jr. helped carve out his own niche while president of the GBREB in 1997, Fantini said.

“He gave it a lot of time and attention, and he really stood out in the minds of a lot of board members,” he said. “On all counts, he deserves to be credited with what he’s accomplished.”

Fifth Fund
For the coming year, NBF hopes to complete the fifth fund, which is already lining up properties. The firm has also begun a program to allow property owners to contribute their buildings – either singular or entire portfolios – into the fund and share in the ownership. Doing so could help assemble a critical mass in one market, said Rappaport Jr., adding that the firm hopes to ultimately establish an empire running from Washington, D.C., to Chicago. At present, most of NBF’s holdings are in Massachusetts (three million square feet) and Connecticut (1.5 million square feet), although it also owns properties in such states as Indiana, Ohio and Virginia.

Each fund is restricted to having no more than 20 percent invested in new development, but NBF is nonetheless beginning to look to pursue such ventures as well. After breaking ground last year on a 160,000-square-foot office building in Arlington, Va., NBF is in permitting for a 100,000-square-foot office building in Andover and is drawing up plans to develop 300,000 square feet of space in Trumbull, Conn.

Locally, the company is also in discussions with Guilford Transportation to join in developing a major mixed-use project in Cambridge, and it has been on hold for some time with Jeremy Jacobs, owner of the former Boston Garden. Jacobs plans to build a 400,000-square-foot entertainment center on the two-acre parcel at North Station and has received offers from NBF and the Raymond Group for creating a much larger mixed-use facility – most likely office and hotel space – that would be built above that facility.

“We will do a major development sometime in the next five years,” Rappaport Jr. pledged. “Hopefully, it will be at the old site of the Boston Garden and, if not, we’ll do something else.”

The 14th Councilor
If the Garden opportunity did come through, it would be somewhat ironic given it is located just a few blocks from Rappaport Sr.’s signature accomplishment. Launched in 1956, the mix of luxury apartments, retail and office space known as Charles River Park created a torrent of controversy when thousands of residents were displaced as part of the city’s urban renewal program. Selling the property not only yielded hundreds of millions of dollars for the family and its investors, it also “cleared the background” to allow his sons to start anew, Rappaport Sr. said. But while the transfer will likely do little to assuage the negative feelings still held towards him, the developer said it has afforded him a sense of closure for the project.

“I’m at peace with the role I played in the city, and I think history will record the contributions to what it meant to Boston,” said Rappaport Sr., whose political power in the Hub was so dominant that he was often referred to as “the 14th councilor.”

Considered a risk-taker in his early life, the 72-year-old Rappaport Sr. credits a conservative approach in the 1980s for keeping his company out of the red. Being one of the few local property owners who did not default during that decade allowed the family to make several lucrative purchases in the early 1990s, including 300 Crown Colony Park in Quincy and 144 Gould St. in Needham. After watching many colleagues create real estate investment trusts, with varying results, Rappaport Sr. said he prefers a private investment vehicle which does not mandate continually buying property in order to prosper.

“If the deals are not good and you begin to think they don’t work, the wise decision is to wait,” he said. NBF – whose name is intriguingly similar to the politically radical New Boston Committee that Rappaport Sr. ran in the 1950s – has done well by being patient and thorough in its buying decisions, he said, adding that he is impressed by the fund’s consistent performance.

“Over time, they have justified the confidence we had,” he said. “My only regret is that we didn’t give them more money.”