Waterfront project set for ’12 start
Developer John Drew said yesterday that he intends to begin construction next spring on Waterside Place, his long-delayed project that will bring 236 apartments and retail stores to a scrubby section of Congress Street on the South Boston Waterfront.
The project will add to a burst of development activity in the area, with builders moving forward on office buildings, residences, and restaurants that are bringing daily crowds to the once-barren industrial district.
Drew said construction of his apartment building, along Congress Street across from the Boston Convention & Exhibition Center, is the first phase of a larger development that will eventually include additional retail stores and possibly a supermarket.
“The housing component will bring more vitality to the area,’’ said Drew, whose company developed Boston’s World Trade Center complex and the Seaport Hotel. “I think it will also help give retailers confidence that there is enough business for them to come down here and open new operations.’’
With Drew’s project now moving forward, all four of the largest developers on the waterfront have either begun construction or are pledging to start work in coming months. Construction is already underway at Fan Pier, where developer Joseph Fallon is building a pair of office buildings for biotechnology company
“This area has hit the tipping point,’’ said David Begelfer, chief executive of NAIOP Massachusetts, a commercial real estate association that yesterday hosted a seminar on the waterfront’s development. “There is a tremendous amount of optimism, and it’s not just the developers, it’s the capital markets as well.’’
As with many planned developments on the waterfront, Drew was forced to postpone construction of Waterside Place during the economic downturn, which dried up funding for large real estate projects in Boston and across the country. Waterside Place was initially approved in 2007 but soon faced delays due to legal and financial issues. In recent months, Drew has reconfigured his development plan, pursuing rental housing instead of condominiums and dividing the work into phases. He said yesterday he is close to securing financing, but would not say from where until the commitments are finalized.
The building will include space for ground-floor retail such as a pharmacy, and also set aside room to help promote business collaboration in the area. Mayor Thomas M. Menino has sought to brand the waterfront as an incubator for entrepreneurial companies, naming it the Innovation District and encouraging technology and science firms to relocate there.
Yesterday, in speech at the NAIOP seminar, Menino said 70 companies have moved to the area over last several years, bringing 2,000 jobs to the waterfront and the promise of 2,000 more. He added that many new restaurants in the district have become “wildly popular’’ and that Fraunhofer, the German research institute, is building a $20 million facility that will speed the launch of clean technology companies.
Menino urged developers to be mindful of the entrepreneurial goals of the area and to shape their buildings accordingly. “We have to look at floor plans differently to build spaces that foster collaboration and cultivate community,’’ he said.
One lingering difficulty with the waterfront’s development is the lack of demand for new office space. While Vertex’s relocation is creating new offices at Fan Pier, there aren’t many other companies with enough size and cash to anchor a similar development, especially with existing office space available at historically cheap rental rates. That dynamic will continue to be a drag on redevelopment of the waterfront’s yawning parking lots and other underused commercial plots in the years ahead.
“There’s not yet a market for office [space] today,’’ Begelfer said. “But as big companies begin to make real estate decisions over the next two to three years, some of these properties could come back into play.’’
Casey Ross can be reached at email@example.com.