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Fan Pier owners defend sale pace

They insist price isn't too high, but mayor wants deal done soon

The owners of Fan Pier, under increasing pressure from City Hall to sell their land to a developer who can make something happen soon on the fully permitted site, say they're not asking too much money for the land.

Two potential buyers offered $125 million for the prime waterfront acreage almost a year ago, but both backed out. Asked if the fact that the land has been on the market for well over a year indicates it isn't worth that much, Nicholas J. Pritzker, chairman of Hyatt Development Corp., said, ''No, it doesn't mean that. We don't know how much the land will bring."

Pritzker said executives of the companies controlled by members of his family, including the Hyatt Development Corp. and its affiliate, the Fan Pier Land Co., ''don't have expectations" on how much the land will bring.

''Determining the value of the property is a very, very complex analysis for any potential buyer," said a Fan Pier Land Co. executive who asked not to be identified. ''The costs are high, the revenue potential is high."

Hyatt and Fan Pier executives were interviewed yesterday by phone, their first public response since City Hall stepped up the pressure. Fan Pier is permitted for about 3 million square feet of mixed-use development to include residential, office, hotel, cultural, and public space along the growing South Boston waterfront, but it has sat vacant for decades.

The Fan Pier owners have received two recent testy letters from City Hall, urging them to get moving on a sale. ''What is the problem? I think they are procrastinating," Mayor Thomas M. Menino told the Globe on June 24.

But the owners have spoken with about six serious potential buyers just in the last 30 days, said Richard L. Schulze, president of Fan Pier Land Co.

Asked whether the Pritzkers will consider offers that don't reach the $125 million figure initially offered by a team led by Lennar Corp. and later by developer Stephen R. Karp last year, the Fan Pier Land Co. executive said, ''We're flexible on the way we're approaching it. We appreciate it when the city says it is flexible."

He was referring to comments made last year by Boston Redevelopment Authority director Mark Maloney, who indicated that the city would consider delaying some of the expensive public space commitments pledged by Fan Pier's owners.

But no deals have been in the works since then, and, at Menino's request, Maloney sent a letter to the Pritzkers' real estate consultants on June 24 threatening to review the site's development permits if a sale is not forthcoming.

In a July 12 follow-up letter, Maloney said he had received ''no response, written or oral," and repeated the city's request for a status report on the land. He also restated the city's intention to review Fan Pier's development permits, as well as ''conditional use permits" that allow the owners to make money by using the land to park cars until it is developed.

''We understand the city is frustrated with the pace," said Pritzker. ''I am sure that we share the same objectives with the city, to get a project under way expeditiously."

Asked whether the Pritzkers would consider defending their development and parking rights in court, Schulze said, ''Legal action, that's not something we've ever thought about, and I can't believe the city is thinking about it either."

Schulze said the company's intention is to sell the land in its entirety. ''We are not talking about selling the plan piecemeal," he said.

However, the executive said, contrary to original expectations that the project's parking, sewerage, streets, and other infrastructure would be constructed all at once, it might be built in two or three large phases.

And housing is likely to come first. ''Residential is going to drive the activity there now," Pritzker said. ''I think the market is very strong."

Asked whether the pointed letters from City Hall have affected the marketing process, Schulze said, ''We're not just sitting on the property." The missives, he said, have ''prompted us to better communicate to them our ongoing efforts to complete a transaction."

In a letter to Maloney yesterday, Schulze said the owners ''intend to close a sales transaction . . . and have been working continuously and diligently to do so."

Rebecca A. Lee, BRA chief of staff, received the letter. ''We know no more today than we did when we sent our first letter," she said.

The Fan Pier executive repeated that any changes that a future owner might ask the city for would be minor -- substituting a use on one block for a use on another, perhaps, or delaying the creation of public areas. ''My expectation is a deal will be done with a buyer-developer, and probably together we will go to the city for the kind of adjustments the buyer will need," he said. ''But this is not asking for concessions."

Thomas C. Palmer Jr. can be reached at tpalmer@globe.com.

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