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Towers proposal to be revised

Ex-BRA chief to helm garage redevelopment

By Casey Ross
Globe Staff / January 14, 2010

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Stalled by the tough economy, a group seeking to demolish the Government Center Garage and replace it with a pair of skyscrapers is dismissing its current developer in favor of a former City Hall veteran who will try to retool the ambitious proposal.

The owners of the garage, a venture that includes a pension fund for electrical workers, is replacing Boston developer Ted Raymond with Thomas O’Brien, who once ran the city’s redevelopment agency under Mayor Thomas M. Menino.

The owners are also looking for new tenants for the offices on the upper floors of the building, instead of immediately pursuing plans to demolish it and construct the skyscrapers proposed by Raymond, who wanted to build towers reaching 42 and 52 stories in height. With the bad economy, Raymond was unable to advance the $2.2 billion proposal, which had encountered political opposition in City Hall.

The project sits at a key intersection in Boston. It straddles Congress Street near City Hall Plaza and borders the Rose Fitzgerald Kennedy Greenway. Consultants who are reviewing Boston’s zoning around the Greenway for the Menino administration have recommended that the two towers should be 15 to 20 percent lower, a position city officials reiterated yesterday.

“I think we all agree the scale and density is a problem, and we need to work with the development team to address that issue,’’ said John Palmieri, director of the Boston Redevelopment Authority.

In an interview, O’Brien, a former BRA director, said his first priority is leasing out the office space being vacated by the regional branch of the US Environmental Protection Agency, which is relocating to the former Suffolk Superior Court House in Post Office Square.

Raymond said he was disappointed about being terminated from the project, but chalked up his troubles to “the realities of the marketplace.’’

“I’d like to wish Tom O’Brien good luck,’’ he said. “I’m sure he’ll do a good job.’’

O’Brien will begin trying to revise the redevelopment plan, but said yesterday it was premature to discuss potential changes.

O’Brien acknowledged the economy will make it difficult to relaunch the redevelopment anytime soon, but he will use the original proposal as the basis for the revision, instead of starting from scratch.

“It’s hard to envision any high-rise moving forward in this environment,’’ O’Brien said. “But the owners have made a $250 million investment in this property and they are committed to proceeding at the appropriate time.’’

O’Brien is forming a new development firm, HYM Investment Group LLC, to work on the garage redevelopment, with the hope that if he succeeds there, it will lead to additional property acquisitions. He previously worked for residential developer JPI as well as New York-based Tishman Speyer, an international real estate firm.

Executives with the team that owns the garage - Britain-based Lewis Trust Group and the National Electrical Workers Benefit fund - could not be reached for comment.

The two purchased the garage in early 2007, when the commercial real estate market was still strong. Raymond was hired to manage the development proposal, which originally was 3.8 million square feet of new space on 3.5 acres, including the 52- and 42-story office towers. His proposals also called for a hotel, restaurants, stores, and a pair of residential buildings along the Greenway.

But the plan quickly encountered problems, not least being that the developers did not own all of the land they needed to build on. The proposed location of the 52-story tower is owned by utility NStar, which operates a substation there, and the City of Boston, which has a district police station there.

BRA officials balked at selling the property to the developers, making clear that they expected a hefty price and substantial public benefits in return, such as construction of a new school.

Those discussions were just getting underway when the economy collapsed, which led to a decline in office rents and made it difficult to finance such a large project. That dynamic has stalled numerous other large developments around the city, including the Filene’s redevelopment in Downtown Crossing and the Columbus Center complex over the Massachusetts Turnpike.

Casey Ross can be reached at cross@globe.com.