Along Route 9, a hospital cuts deal to tackle a hard-hat job

A development that could mean an additional $1million in tax revenue annually for Brookline took a step closer to reality this month.

A large property at Brookline Place, on the Boston end of Route 9, is to be torn down, the soil cleaned up, and new offices, retail spaces, and laboratories built there.

"This is a very exciting deal for the town," said Jennifer Dopazo, the town counsel who is negotiating the details.

Selectmen last week executed documents that will allow the financing and eventual destruction of 2-4 Brookline Place, with Children's Hospital responsible for the work and remediation.

The hospital will need to clean up coal tar from a former coal-gasification plant on the site as well as oil that once leaked from underground tanks to eventually construct underground parking at the site, according to press spokeswoman Michelle Davis.

Already, 1 and 5 Brookline Place are owned by the hospital. The documents, approved 5 to 0 by the selectmen, will give the medical nonprofit a ground lease from the town for 95 years.

Rent will equal the assessed taxes for the parcel, according to Dopazo. If the hospital encounters construction delays, it has agreed to an additional $1 million in penalties.

Penalties should not be necessary, according to Charles Weinstein, vice president for real estate for Children's.

"We are eager to start," he told the selectmen. "We have a strong incentive; we need the space."

The medical office building at 1 Brookline Place brings the town $250,000 annually in property taxes, Dopazo said. As a nonprofit, the hospital is exempt from property taxes.

By owning the land and leasing it to the hospital, the town guarantees its tax income from the site, Dopazo said.

Schematic designs of the development, which will cost roughly $75 million to complete, should be ready for the town's Economic Development Advisory Board by late next month, Weinstein said.

Town Meeting changed the zoning on the parcel three years ago to allow towers of up to 150 feet. Weinstein noted that the hospital will build according to town plans for "Gateway East," released about six months ago.

There will be more open space, the area will be more pedestrian-oriented, and it also will be a more vibrant retail environment, Weinstein told the selectmen.

Destruction of the current buildings will have to wait until the current tenants, which include Jenny Craig and The New England Soup Factory, have vacated. They legally have about a year left in their leases.

Weinstein said that his department would start the state permit and demolition permit process as soon as possible, and estimated it could take six to nine months. Construction could begin after that, and the first building could be open in about three to five years, Davis said.

The site originally was envisioned as laboratory space, but the market for such space has softened, while demand for medical offices has increased, Davis said. The differences for the town in income are minimal between the two uses, according to Dopazo.

The development is expected to have three times the assessed value as 1 Brookline Place and be worth $1 million annually to the town for tax purposes, Dopazo said. Children's space in the Longwood Medical area is limited, so the hospital is moving most functions not directly related to in-patient hospital care off-site, Davis said. Currently, it leases space in the Fenway for administrative offices.

The Brookline space is roughly a 15-minute walk from the hospital and would offer more exciting lunch options for office workers and doctors than Longwood does, she said. "I'm looking forward to moving over there," Davis said.

Weinstein said that the restaurant tenants in the building will be paying market rents, and he expects they would want a dinner crowd as well as lunch.

"This will change the face of that area," Davis said. "Children's tries to do things right and has the resources to do things right."