For the McCourts: Trading places didn’t work out
Two former Boston executives sold a prime piece of the city waterfront to buy the LA Dodgers. Now the team is in bankruptcy, as a $3 billion project moves ahead on their old property.
The reception, held at the tony Back Bay restaurant Via Matta, was to be a grand homecoming for Frank H. McCourt Jr., the former Boston businessman who sold 24 acres of scrubby seaport parking lots to become owner of the storied
The Dodgers were playing at Fenway Park in late June 2010, giving McCourt a chance to show off the team to local politicians and former colleagues, who mingled with slugger Manny Ramirez and other members of the California franchise. As McCourt swapped stories and recalled old times, the reception offered a brief respite from his bitter divorce in Los Angeles and a brewing battle over ownership of the team.
“For whatever difficulties he was going through at the time, it wasn’t evident to the rest of us, and certainly nobody brought it up,’’ said Vivien Li, a longtime McCourt acquaintance who attended the party.
Beneath the surface of the glitzy event, a stunning reversal was unfolding that now has McCourt in a desperate struggle to retain control of the financially troubled Dodgers, while the old parking lots he traded away are poised for a $3 billion redevelopment expected to reinvent a huge swath of the city’s waterfront.
John B. Hynes III, the developer who acquired the property following McCourt’s exit, plans to begin construction next year on a massive complex of buildings that will include hundreds of new residences, a hotel, and shopping complex the size of Copley Place, with cinemas, restaurants, and stores.
McCourt - stalled by economic downturns and poor relations with City Hall - swapped one of the city’s greatest development opportunities for a fleeting chance at glory in California, where he is accused of driving one of baseball’s most venerable franchises into a financial abyss.
“Frank could have cashed out on the opportunity he created on the waterfront and just rode off into the sunset,’’ said Michael Vaughan, a former official at the Boston Redevelopment Authority. “He went all in and bought the Dodgers. I think he was always well intentioned, it just got away from him.’’
McCourt and his ex-wife, Jamie, declined to be interviewed, but issued separate statements wishing luck to the new owners of the seaport property.
Since buying the team, McCourt’s life on the West Coast has been a study in excess and scandal. He bought several multimillion-dollar properties - including two homes across from the Playboy Mansion - and then became enmeshed in one of the most expensive divorces in California history, splitting with his wife and longtime business partner.
Unable to meet the team’s financial obligations, McCourt filed for bankruptcy protection earlier this year. The commissioner of baseball, Bud Selig, has accused him of burying the team in more than $525 million debt and diverting more than $180 million in team assets to finance a lavish lifestyle that included seven luxury homes, private jet travel, stays in $5,000-a-night hotel rooms, and five-figure clothing bills.
In court papers, attorneys for McCourt said he has taken less than $30 million in distributions from the Dodgers and have accused Selig of trying to muscle him out of ownership.
Former business associates here said the Los Angeles image of McCourt contrasts sharply with the person they knew. While he was a showman with big plans and posh offices in the Federal Reserve tower, McCourt also did a lot of things right: He courted South Boston politicians, donated money and time to neighborhood causes, and helped lay the groundwork for the Innovation District now taking shape.
At age 27, McCourt was among the first to recognize the opportunities in the old industrial seaport, negotiating an agreement in 1980 to buy the L-shaped plot running along Northern Avenue and south to Summer Street. The transaction eventually led to a decade-long court battle in which McCourt won control of the property from the real estate giant Cabot, Cabot & Forbes. In the end, he acquired the former Penn Central Railroad property for $8.5 million.
In the 1990s, McCourt negotiated a deal allowing him to profit from the state’s use of his land as a staging area for the construction of the Big Dig and Silver Line transportation projects. He collected $86 million in government payments, plus some strategically valuable parcels through land swaps.
Together with the road and transit upgrades in the area, he dramatically increased the value of his property and simultaneously laid the groundwork for massive redevelopment.
“If you look at the groups that profited most from the [Big Dig and Silver Line], Frank was at the top of that list,’’ said Vaughan, the former BRA official. “The state took his land by eminent domain, paid him for it, and then gave it back to him in better condition.’’
But during the ensuing years, McCourt began to alienate Boston Mayor Thomas M. Menino by detailing grand visions for the property that never seemed to advance beyond the slick presentations he gave in his 25th-floor offices. McCourt and his ex-wife delivered a series of carefully choreographed talks in which they spoke of haute design on the waterfront and showed public leaders a lighted model of a transit station designed in the shape of an inverted glass pyramid.
As a couple and as executives, the McCourts were known for being hard-nosed, combative, and extremely businesslike - thinking three moves ahead about how to maximize their property’s potential. Their plans, which varied over the years, included office towers, a grand hotel, pedestrian plazas, retail stores, and signature civic buildings in the mold of the Sydney Opera House in Australia.
“Frank never rested on his laurels, and he worked very hard, but every time he would move in a different direction the economy crashed,’’ said Li, who reviewed McCourt’s plans for the Boston Harbor Association, a community group that advocates for access to the water. “He just couldn’t hit the right moment to move forward.’’
At one point, McCourt launched an unsuccessful bid to buy a slice of the
Though prior generations of McCourts ran a construction firm that built some of Boston’s most important infrastructure, including Logan International Airport, Frank McCourt only built smaller projects, such as condominiums at Union Wharf in the North End. His short development resume followed him to Los Angeles, where one sportswriter took to calling him the “Boston parking lot attendant.’’
By 2003, out of favor with Menino and again facing a struggling local economy, McCourt looked for new opportunities. He crafted a plan that relied heavily on borrowing to acquire the Dodgers, the team’s stadium, and 250 acres around it for $430 million from Fox Entertainment Group, a subsidiary of Rupert Murdoch’s News. Corp. He used his 24 acres in the seaport as collateral for a $145 million loan from Fox to finance the transaction.
Two years later, he was forced to sell to Fox to pay the loan. Fox then sold it for $203.7 million to Hynes and Morgan Stanley, who initiated the redevelopment plan now finally moving forward.
Their plan includes residential and retail buildings, offices, parks, a hotel, and a new road to funnel highway traffic to the site from Summer Street and the Big Dig tunnels. The first phase, to begin next year across from the John Joseph Moakley US Courthouse will include two towers containing a hotel and apartments over four stories of retail stores.
“This project is going to activate streets that are dead right now,’’ Hynes said in a recent interview. “It’s going to add millions of square feet of mixed uses to the waterfront and result in upward of 3,000 people living, working, and playing down there on a daily basis.’’
Meanwhile, McCourt remains under a microscope in Los Angeles, where the fallout from the divorce and battle over the Dodger plays out in daily headlines.
As his legal fight continues in bankruptcy court, it remains unclear whether McCourt can hold onto the team he traded his old South Boston land to get. Asked whether he had any regrets about leaving opportunities here, McCourt issued a brief statement.
“I’m extremely proud of the contributions we made,’’ he said. “The Seaport is a great opportunity for Boston, and it will get better and better over time, and I wish the current owners of the property all of the success in the world.’’
Casey Ross can be reached at email@example.com.