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Lennar makes another Fan Pier bid

Fla. builder offers less as owner faces city pressure to sell

About a year after making an unsuccessful run at the Fan Pier development site on the South Boston Waterfront, Lennar Corp. is making another bid to buy the land -- but it's offering significantly less money.

Lennar, a Miami home builder, and partners LNR Property Co. and Morgan Stanley have offered about $100 million for the 21-acre site, according to three industry executives briefed on the offer who would speak only on the condition they not be identified.

The executives said the Lennar group put down about $10 million that is not refundable if the buyers elect not to close a deal.

Two other prospective buyers offered $125 million about a year ago, but both those deals fell through.

Meanwhile, Boston Mayor Thomas M. Menino has been getting impatient as Fan Pier remains a parking lot -- even though it received city permits for construction of residential and commercial buildings three years ago. Fan Pier's owners, the Pritzker family of Chicago, have been under pressure recently from Menino to sell the land. The Pritzkers declined to comment yesterday.

But Richard L. Shulze, president of Fan Pier Land Co., which is controlled by the Pritzkers, told the city in a letter last week that the owners had been working hard for more than a year to sell the land. They had talked to about six serious prospects in the previous month, Shulze said in a recent interview.

Fan Pier is located between the federal courthouse, with its Harborwalk parkland edge, and Anthony's Pier 4 restaurant. But it has defied improvement for decades, first in the 1980s, when the Pritzkers and Anthony Athanas owned it together.

Since then, it has weathered the ups and downs of the market, along with changing attitudes at City Hall and in South Boston. Permits for Fan Pier's development were issued in June 2002.

Lennar had been working with Leggat McCall Properties LLC, of Boston, as a potential partner in the purchase of Fan Pier, but that partnership recently ended, the executives said. A Leggat McCall executive declined to comment.

No one from any of the companies teamed up in the latest venture to buy Fan Pier would comment, either.

The Pritzkers saw the land through years of planning and permitting, after winning ownership in a lawsuit in 1989. In late 2003, they decided to sell it.

Late last summer, Lennar led a team that included Turnberry Associates of Aventura, Fla., a developer of luxury condominiums, offering $125 million for Fan Pier.

But as their exclusivity deadline expired in September, Lennar failed to deliver a nonrefundable deposit. Soon after, mall developer Stephen R. Karp led a team that put down a $2.5 million nonrefundable deposit. But that group walked away from the deal after deciding $125 million was more than the land was worth.

Upfront development costs and the public amenities any new owner would be required to provide are both considered difficult hurdles. A developer would have to spend tens of millions of dollars on such obligations long before seeing a return on investment.

Fan Pier is permitted for about three million square feet of development, including residential, office, hotel, and public space. But the new owner must put in underground parking and watertight foundations adjacent to Boston Harbor, as well as expensive infrastructure like sewers and roads, on what is now mostly vacant land used for parking.

The developers must also provide parks, a marina, and space for cultural institutions such as the Institute of Contemporary Art, which all by itself is under construction on the land now.

Total development costs are estimated at $1.2 billion.

South Boston Waterfront development, with a few exceptions, has languished behind hopes and predictions over the last quarter-century or so. But with numerous large projects now underway -- such as a Westin hotel at the convention center -- and the residential market continuing to seem healthy, Menino in late June started ratcheting up the pressure on the Pritzkers.

He directed the Boston Redevelopment Authority to send two letters to the Pritzkers' development consultants, Spaulding & Slye Colliers, urging the Pritzkers to move quickly and suggesting that some permits could expire in the near future, with a time-consuming new approval process required.

The land has been on the market formally since April 2004, but there have been no reports of any serious bids since fall of last year.

Last summer, when they first sought Fan Pier, Lennar executives made it clear they were interested in getting a foot in the Boston market. David Hall, senior vice present for LNR, based in Newport Beach, Calif., said in a speech in Boston in May that the company still hoped to buy and develop Fan Pier.

In February, Lennar joined Roseland Property Co., of Short Hills, N.J., in Roseland's ongoing plan to develop condos, rental housing, and commercial space at Pier One in East Boston. Lennar purchased 15 Massachusetts and New Jersey properties from Roseland, including a portion of Pier One.

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

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