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This story ran on page D1 of the Boston Globe on 4/16/2003.
© Copyright 2003 Globe Newspaper Company.

Fan Pier plans scaled back
Market malaise will force delay of offices and probably hotel
By Thomas C. Palmer Jr., Globe Staff, 4/16/2003

Developers of the 21-acre Fan Pier on the South Boston Waterfront still aim to start building a $1.2 billion mixed-use minicity next year, but the office buildings that were planned will have to wait, and possibly the hotel, too.

An executive who has seen the latest plans for Fan Pier, the most prominent development site on the waterfront, said this week that market conditions for offices and hotel are so dismal that the first phase will probably depend on condominiums.

Residential development has held up significantly better than commercial during the economic downturn. ''Today, with the office market not there, and hotel financing not available, you've got to look at residential,'' the executive said.

Yesterday, city officials said they hope the Fan Pier project will move forward soon.

''We expect they are trying to figure out some mix of the program that would work,'' said Kairos Shen, director of planning for the Boston Redevelopment Authority. ''Residential is a likely component of the first phase.''

But city officials want a hotel built, too, as soon as possible.

''The city would definitely like to see the hotel on the Fan Pier, because of the importance of having rooms for the new convention center,'' Shen said. The center, within walking distance of Fan Pier, is due to open next year.

Current plans for Fan Pier call for preconstruction development at least through the end of this year, and no 2004 construction work is guaranteed, the executive and others familiar with the plans said.


Changing focus: The plan for Fan Pier

The Institute of Contemporary Art, though, hopes to have a spring 2004 groundbreaking, said Paul Bessire, director of external relations. The ICA is scheduled to be part of the first phase of development at Fan Pier.

The museum, currently operating in cramped quarters on Boylston Street, has raised about 40 percent of the $60 million it needs to build a museum on the waterfront three times the size of its current facility. But it can't start building until the developers, Hyatt Development Corp., owned by the Pritzker hotel family of Chicago, and their partners at the Boston brokerage Spaulding & Slye Colliers, prepare the site. Included in that work would be things like building sewers and other infrastructure.

''We need a lease to break ground, and we're in the final stages of negotiating that lease,'' Bessire said. He hopes the lease will have a firm date early in 2004 for the start of construction, he said, with the museum opening in 2006.

Hyatt and Spaulding are currently analyzing the expense of building underground parking, foundations, and the sewer system, to decide whether returns from condominiums and stores alone would support the huge project.

If built without a hotel, the first phase would be somewhat smaller than originally planned.

The Fan Pier site is about equal to nine city blocks. First-phase residences would be built near the federal courthouse and along the water, along with retail space and a civic-cultural component, those familiar with the current plans said.

Vivien Li, executive director of the Boston Harbor Association, said the shift is no surprise.

''If you look at what's moving forward on the waterfront right now, it's residential,'' she said, citing two residential projects on the harbor in East Boston, developer Joseph F. Fallon's mixed-use complex with apartments on D Street in South Boston, Channel Center on A Street, and a residential complex in Charlestown.

Li said some of the Fan Pier's representatives have sought at public meetings recently not to get people's hopes up about the 3 million-square-foot development springing up overnight. ''They've been saying it probably won't be built out till the end of the decade,'' Li said.

The developers have city and state building permits that set limits on height and uses, but allow considerable flexibility concerning what is built first and what comes later.

The final mix of the Fan Pier's residential, office, hotel, and retail space is not expected to differ substantially from what was approved by the state and city: a hotel, four residential buildings, three office buildings, plus civic and cultural space. But substitutions are allowed depending on market conditions.And even if construction doesn't begin next year, the developers are obliged to build a temporary Harborwalk and install benches along the water.

Thomas C. Palmer Jr. can be reached at

This story ran on page D1 of the Boston Globe on 4/16/2003.
© Copyright 2003 Globe Newspaper Company.

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