Plans for former naval base delayed
Move crimps hopes for new jobs, revenue from S. Weymouth project
The developer of the former South Weymouth Naval Air Station is delaying plans to purchase the property from the Navy, delivering another setback to one of the state's largest building projects and preventing communities from collecting millions of dollars in promised payments.
An executive briefed on plans by LNR Property Corp., the project's developer, said the firm does not expect to close on the $43 million purchase by a March 31 deadline. That means construction of the long-anticipated SouthField development, a cluster of villages set to include businesses and homes, will remain on hold.
LNR declined to comment yesterday.
The executive, who was not authorized to speak publicly, said LNR is not backing away from the project and intends to proceed in coming years with construction of more than 2,800 housing units, a golf course, a sports complex, and 2 million square feet of commercial space, which could include a hotel, office space, retail stores, and possibly a movie studio.
The firm, which already owns 540 acres at the base, reached a tentative agreement last March to buy the remaining 900 acres from the Navy. Since then, real estate values have dropped while financing costs have increased, leaving LNR in a financial squeeze that is stalling development across the state.
"If you're selling land based on the values of 18 months ago, it makes the development of the naval parcel a little tougher," said Peter Forman, president of the South Shore Chamber of Commerce. "Development of the housing units might not be as financially viable as it had been."
The public entity that oversees the base redevelopment, South Shore Tri-Town Corp., has also struggled to issue bonds to help pay for cleanup of the property and other improvements needed to finalize the property sale and proceed with construction.
Kevin Donovan, chief executive of Tri-Town Corp., said officials still hope to obtain federal stimulus money needed to build a $60 million parkway through the property. He said LNR remains fully committed to its plans for the property, but the firm remains beholden to financial forces that are out of its control.
"It's no secret to anyone that the markets are frozen," Donovan said. "The priority right now is to get the parkway in place and move forward with the rest of the infrastructure work."
LNR is planning to meet with Navy officials soon to discuss an array of issues associated with acquiring the base. A spokeswoman for the Navy said officials involved in the transaction could not be reached for comment yesterday.
The delay in work on SouthField will deprive the state of thousands of construction jobs and millions of dollars in private investment needed to reinvigorate the local economy. The construction industry, by some measures, has absorbed the steepest losses of any economic sector in Massachusetts, with employment down 23,000 jobs since a peak in April 2006, according to state economic data.
As banks remain reluctant to lend and borrowing costs rise, development is slowing down, or stopping completely, in communities across the state. In Boston, three large development projects have been halted during construction and several others are facing significant delays.
Overall, the downturn is depriving communities of badly needed tax revenue. But the pressures surrounding the SouthField development are especially acute, because the three communities that border the base - Rockland, Abington, and Weymouth - were hoping to reap significant financial benefits this year.
The communities are due to receive millions of dollars in so-called host community payments, a kind of predevelopment fee, from LNR upon the closing with the Navy, but that money could remain tied up until the deal is completed.
Officials in Abington were expecting to use $400,000 to pay for new highway equipment and repairs to the Council On Aging building, and Weymouth was also expecting a large amount of money to bolster its finances. The situation is far worse in Rockland, where community leaders were relying on receipt of $1.2 million to help close a deficit in the fiscal year that ends June 30.
"It is what it is," said Allan Chiocca, town administrator in Rockland. "We were anticipating using some of that money to balance this year's budget."
Casey Ross can be reached at email@example.com.