Feuding owners aim to sell NorthPoint
Skyrocketing market in commercial projects helped trigger decision
The feuding owners that are developing NorthPoint, a commercial and residential minicity in East Cambridge, have put the ambitious project up for sale.
Boston and Maine Corp., which owns 75 percent of the massive development, and minority owner Cambridge North Point LLC, have sued each other and, according to a recent court filing, were "hopelessly deadlocked" over the project's future. But now they've agreed on at least one thing: Someone else should take over build-out of the 44-acre site, which could include up to 20 different buildings when complete.
"We set aside certain differences and agreed the market is right and the timing is right to put the property up for sale," said Philip D. Kingman, senior vice president of development for Pan Am Railways Inc., the New Hampshire parent company of Boston and Maine.
A trial is set to begin soon in a Delaware court to resolve some of the many allegations the partners have made against each other.
But in the meantime the two owners have hired Cushman & Wakefield of Massachusetts Inc., to market the former railyard, portions of which are also in Somerville and Boston. Bids will be due in about 90 days, and the owners hope to have a sale completed in five months.
Two modern condo buildings with colorful exterior panels are up on the site -- one complete but not yet occupied, the oth er nearing completion. The owners are permitted to build a total of about 5 million square feet of various uses on the property, which is adjacent to a nearly complete luxury apartment complex by Archstone-Smith and is also near Museum Towers.
Development plans include a 10-acre central park, retail stores, office and lab buildings, parking garages, a possible hotel, and about 2,500 residential units. The developers also are committed to building a new Green Line MBTA station.
Cambridge North Point, which is made up of about 100 investors, most formerly affiliated with the former real estate firm Spaulding & Slye, issued a statement yesterday calling the agreement to sell "a major step forward toward resolving the legal issues between the partners."
It will "allow both parties to take advantage of the project's unique attributes at a time when there's a very positive outlook in the real estate market," the company said.
The sellers have not set an asking price, but the property is on the market at a time when prices for commercial developments are skyrocketing, and existing office and lab space, and land for new facilities, is scarce.
"Through our more recent sales activity in Cambridge we're seeing new price points paid for land that can be redeveloped for life sciences use," said Elizabeth Carrillo Thomas, the executive director at Cushman & Wakefield.
By comparison, the 21 acres on Fan Pier in Boston, with about 3 million square feet of buildings permitted, sold two years ago for $115 million. And 23 acres formerly owned by Frank H. McCourt Jr., also on the South Boston Waterfront, sold for about $200 million last year.
Real estate executives said the bidding on NorthPoint, with twice as much land but on the edge of developed Cambridge, could fall somewhere in between.
Thomas said its proximity to Kendall Square, an epicenter of biomedical and life sciences companies, should drive interest in NorthPoint. "When this was approved, the city contemplated a 20-year development period," she said. "We think it will happen a lot quicker than that."
Already, rents in Cambridge are hitting record levels, with the asking numbers in one premier building hitting $85 per square foot. And asking rents for "biotech-ready" space in Kendall Square are hitting $75, according to real estate firm Meredith & Grew.
The two NorthPoint owners sued each other earlier this year, each charging the other with breach of contract. Boston and Maine, for example, charged in a March lawsuit in Suffolk Superior Court in Boston that Cambridge North Point did not make "any substantial development progress for the first four and one-half years of the project."
In April, Cambridge North Point filed a suit in Delaware court charging Boston and Maine with breach of fiduciary duties and asking that the partnership be dissolved.
One court document said the two owners have become "hopelessly deadlocked with respect to continued development of the project."
Boston and Maine owned the land near the Gilmore Bridge and O'Brien Highway and entered a partnership with Spaulding & Slye in 2001 to develop the property.
One of the developers' responsibilities is to build an MBTA station adjacent to the development area to replace the decrepit Lechmere Green Line station.
Marketing on the two condo buildings -- dubbed Sierra and Tango -- is continuing. About 100 of 298 market-priced condos are under sales agreements, out of a total of 329 units, according to Jones Lang LaSalle.
Thomas C. Palmer Jr. can be reached at firstname.lastname@example.org.