Westwood Station’s Catch-22
MASSACHUSETTS OFFICIALS have been promising to use highway spending to jump-start the stalled Westwood Station mixed-use development project for more than a year and a half. There’s one issue standing in the way: It’s a little tough to hand a project a fistful of cash if the project doesn’t exactly have a developer.
The struggles of Westwood Station, the beleaguered mega-development at the confluence of Interstates 93 and 95, show the limitations of one of the key cogs in state and federal officials’ economic recovery efforts: targeted infrastructure investments made in the name of economic development. At Westwood, $55 million in highway ramp construction was supposed to revive a stalled $1.5 billion development project. Instead, its future is now more in doubt than ever.
Westwood isn’t the only ambitious construction project to sputter in the face of state infrastructure aid. The Patrick administration tried to open up a 300-acre biotech park off Route 24 in Fall River with $35 million in infrastructure funds, only to have that city’s leadership turn around and decide the park would be a wonderful place to put a tribal casino.
Still, the Westwood example is notable for its size, and for the key role prospective public funds continue to play in its ongoing travails. The project currently lacks a real developer, and a development program. There’s no state infrastructure money to be had without them. And there lies the Catch-22 — without the state funds, the private investment can’t happen, so the project is hard-pressed to attract interested developers and financial backers. But public aid won’t be coming without firm financing. There’s no end to that standoff in sight.
The ambitious Westwood Station development, which had promised to bring smart growth and new vitality to the Westwood-Canton line, has been a series of train wrecks piling on top of one another. The project’s original developers, Commonfund and Cabot, Cabot & Forbes, famously became embroiled in a State House showdown over liquor licenses, and in a nasty feud with the town of Canton, which fought the project all the way to the Supreme Judicial Court. Then the developers were squeezed out of the deal by their lender, Anglo Irish Bank, which sunk $120 million into the project, and which happens to be a ward of the bailed-out Irish government. Now the old developers are being sued for millions of dollars in road construction damages by the town of Westwood.
The project’s erstwhile new developer, Eastern Real Estate, thought it would make a killing in its last investment, a foreclosed office park in Waltham; that deal soon ran out of money, and Eastern was forced to turn over the park’s keys to its lender. The Westwood Station deal was supposed to be its comeback. But, according to multiple sources close to the deal, it has been unable to come up with the cash to actually buy out Anglo. The nationalized bank, which is under tremendous pressure in Dublin to liquidate its real estate portfolio, still controls the 150-acre development site. A foreclosure auction could be looming.
Westwood Station was supposed to usher a new, denser kind of mixed-use development into the suburbs, with a thousand residences and millions of square feet of retail and office space clustered around a major rail hub. That vision was put on hold when the economy crashed, in favor of a phased plan that emphasized big box retailers like Wegmans and Target in the short term.
Sources close to the deal say when Anglo agreed to sell its mortgage to Eastern, the real estate firm tried to scale down the project even more. That got state transportation and economic development officials wondering just what kind of project they were about to partner with. The state’s second-guessing then undermined Eastern’s position, since $55 million in free highway work was part of what they believed they were buying. Without the public infrastructure, the project wouldn’t work. And the absence of a firm funding commitment from the state has helped plunge an already troubled development into a deeper level of chaos.
Still, it’s not clear how much of a benefit taxpayers would reap by investing in an ever-shrinking project. The $55 million public commitment was supposed to be a down payment on 4.5 million square feet of private development. It wasn’t just supposed to speed the arrival of an outsized strip mall.
Paul McMorrow is an associate editor of CommonWealth Magazine. His column appears regularly in the Globe.