The Massachusetts Turnpike Authority Board in its final official meeting today approved significant changes to a development agreement that will speed the first phase of a major mixed-use project in Boston’s Fenway neighborhood, which includes development of Air Rights “Parcel 7” over the Turnpike and adjacent Turnpike-owned land north of Beacon Street.
The new agreement with developers MK Parcel 7 Development LLC requires the developers to pay fair market value for all land and, for the Turnpike and its successor agency, MassDOT, to receive a share of operating income from air rights parcels during the two-phase development process.
The Parcel 7 development still requires final approval by state environmental officials. More and a Phase I site plan after the jump.
“This new agreement will jump start the land and air rights-based first phase of a signature development project in Boston, creating jobs, building affordable housing, and providing much-needed parking in the Longwood Medical area,” said Transportation Secretary and Turnpike Authority Board Chair James Aloisi, Jr. “Few other projects have such vast economic development potential.”
“We are taking an important step today to move forward an important transit-oriented, mixed-use project which will truly enhance the neighborhood while also protecting the interests of the taxpayers,” said Turnpike Authority Executive Director and incoming MassDOT Secretary and CEO Jeffrey Mullan. “This updated agreement also establishes the feasibility of the future air rights developments over the Turnpike roadway and positions MassDOT to receive significant financial benefits from that Phase 2 development.”
"This project has the potential to be a leader in limiting greenhouse gas emissions from real estate development," said Secretary of Energy and Environmental Affairs Ian Bowles. "The extensive solar power array and zero net energy commuter rail station proposed here are the kinds of creative steps I am looking for as this project proceeds through state environmental review."
“Under the leadership of Mayor Menino, BRA planning staff worked with the community to create a Civic Vision for the development of the Turnpike Air-Rights parcels – and with this new partnership, I’m excited that Fenway Center is now able to move forward. This project will significantly transform the public realm between Kenmore Square, Fenway and the Audubon Circle and provide a number of new amenities to those who live, work and visit these neighborhoods,” said John F. Palmieri, Director of the Boston Redevelopment Authority.
“We are excited to take this next step forward and help our vision for Parcel 7 become reality,” said John Rosenthal of MK Parcel 7 Development.
“MASCO (Medical, Academic, Scientific Community Organization, Inc.) has long been an advocate for development of the Massachusetts Turnpike Air Rights in the Fenway, and we are pleased to be participating with the Meredith Kenmore/Fenway Development Group and the Boston Red Sox on this Parcel 7 Project. The proposed mixed-use Fenway Center Project with its appropriate mix of residential, commercial, retail, and shared-parking uses will enhance the urban fabric of the Kenmore area and provide much needed transit improvements through the creation of a full service Commuter Rail station and multi-model center at Yawkey Station. This will be a critical transit link for the more than 100,000 employees, students, patients, and visitors coming to the LMA on a daily basis,” said MASCO President and CEO Marilyn Swartz-Lloyd.
“The Fenway Center project is an ideal investment for the AFL-CIO Housing Investment Trust which includes local union investors and public pension funds like the Mass State Pension fund,” said Paul L. Barrett, Northeast Director at the AFL-CIO Housing Investment Trust. “This project provides everything the Housing Investment Trust looks for to invest in a project: a return for the pension funds, union jobs particularly in this tough economic environment and housing for residents of all incomes.”
“This project of all the projects has the most benefit to the community and was the best of all the proposals,” said State Representative Michael J. Moran.
The Turnpike Authority Board designated the developers for development of the property in 2007 and executed a development agreement in 2008. The national economic downturn and deterioration of real estate and credit markets made development under the original agreement less feasible.
Executive Office of Transportation Deputy Secretary for Real Estate and Economic Development Peter O’Connor says today’s revised agreement changes that outlook.
“This new rent structure creates a development opportunity that is financeable and can be constructed in the short term, before other traditionally structured projects will be able to get started,” said O’Connor. “It achieves a substantial financial benefit for the Turnpike, as well as creating jobs in a down economy.”