Developers of Pike site told to act
Show Columbus Center will be built, or remove staging, state officials say
The Patrick administration has ordered developers of the $800 million Columbus Center project to either move forward with construction or spend millions of dollars to remove staging at the site - an ultimatum that could be a death knell for the foundering Boston development.
State officials expect the developers, the real estate arm of the California state pension fund and Boston-based Winn Cos., to remove barriers and take other steps to clean up the Back Bay work zone within several months, but officials also hint they will remove the team if it doesn’t soon produce proof it can build the massive project.
“At some point we need to call the question and say, is this really going to happen?’’ said Jeffrey Mullan, executive director of the Massachusetts Turnpike Authority, which has leased the site to the developers.
He did not give a deadline, but said the state cannot wait indefinitely while valuable property lies fallow, depriving taxpayers of millions in potential revenue and inconveniencing pedestrians, commuters, and nearby residents.
The state’s demand to restore the property puts Columbus Center on even shakier legs, as it adds millions of dollars in costs to a project that already cannot go forward for lack of funding.
The development team also includes the Beal Cos. and the Related Cos., which were brought in last September to see if they could devise a way to make the project viable.
In a statement yesterday, the team said it had no plans to bow out. “We continue to work diligently to develop a viable strategy to move this important project forward,’’ the statement said. “We are best positioned to make this happen given our expertise and investments in the site.’’
The statement said the developers are talking with city and state officials about further restoration of the site.
Given the weakness of the housing market and of the general consumer economy - as well as the difficulty of raising money to fund real estate construction - specialists said the prospects for a complex that includes condominiums, a hotel, and retail outlets are not promising. Developers will have to spend tens of millions of dollars to build a platform across the turnpike just to support the 35-story tower and other buildings that are planned between Arlington and Clarendon streets.
“It’s a visionary project, but it also carries construction costs that are very difficult to sustain in the current economic setting,’’ said Richard Gollis, principal of Concord Group, a real estate advisory firm.
Conceived in 1996, Columbus Center was supposed to show that large-scale developments built over the highway would generate jobs and millions of dollars in tax revenues. But the project has suffered a series of setbacks and management changes. After finally breaking ground in late 2007, the developers halted construction a few months later when the economic downturn prevented them from lining up enough financing to continue. They were then required to spend hundreds of thousands of dollars on interim repairs to clean the site, fix fencing, and remove parking obstructions.
So far, the second look undertaken by the Beal-Related Cos. venture has produced little public progress, and the team has otherwise kept a low profile.
Mullan said the state cannot wait any longer. He said the developers must restore the site to its original state or they will be in violation of their agreement with the Turnpike Authority.
Construction barriers near the Arlington Street onramp make it difficult for trucks and snowplows to navigate. State and Boston officials also want the developers to stabilize a slope along the ramp and remove unsightly construction fencing along city streets.
The Turnpike Authority could take the developers to court to enforce this demand. But Mullan acknowledged that the lease does not require the developers to post a bond or make other payments if they are unable to do the work themselves.
As for the more fundamental question of whether Columbus Center will ever be built, that remains uncertain, Mullan said. But, he added, the state will move to find new developers if officials don’t see progress in the next couple of years.
Casey Ross can be reached at cross@globe.com. 