Fifteen months after Ikea announced it would not build a store in Somerville, the furniture giant has sold its property in Assembly Square for just over $18 million.
Federal Realty Investment Trust finalized its purchase of the 12-acre site at the beginning of October and is developing plans for a mix of residential, office and retail space on the property, said Don Briggs, the president of Federal Realty Boston, Tuesday.
“Obviously we’ve made a huge investment in the neighborhood here,” Briggs said. “We think that owning this additional 12 acres will just expand the value of that investment.”
Next to its new property, Federal Realty has invested $215 million to build Assembly Row on 45 acres that will include outlet stores, upscale apartments, restaurants and office space. Federal Realty’s partner AvalonBay Communities is already building the first 450 apartments and the first units could be ready before the end of this year.
About $130 million in state and federal funding has also been invested to build roads, utilities and an MBTA Orange Line stop in Assembly Square.
Ikea first became involved in Assembly Square in the late 1990s, but announced in July 2012 that it would no longer seek to build a 340,000 square foot store in Somerville. The Swedish retailer said it believes its store in Stoughton is sufficient for Massachusetts.
Somerville Mayor Joseph Curtatone said Tuesday that while it would have been good to have Ikea in Assembly Square, the city now has an opportunity to unlock and even better use for the 12-acre property as infrastructure improvements are in place and the T stop is set to open next summer.
Federal Realty has been exploring building a 100,000-square-foot supermarket on the former Ikea property, but it would require the city’s approval of a change to zoning laws, which now limit buildings at the site to no more than 50,000 square feet.
Curtatone said there have been community concerns about a large single-story grocery store on the property, but he believes there is still potential for a grocery store if it is done the right way and is built on a more urban scale. The mayor said he thinks that could be done without needing a zoning change.
Briggs said Federal Realty is still exploring the idea for a grocery store as it develops a master plan for the property. He said he’s hoping that the company will be able to present its master plan to the city before the end of the year.
--Brock Parker can be reached at firstname.lastname@example.org