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July 7, 2005

© Copyright 2005 Globe Newspaper Company
The Boston Globe

Russia Wharf plan stalled, firm says
Equity Office blames rival's zoning lawsuit

By Thomas C. Palmer Jr., Globe Staff

In a fight between two big Boston developers, at least one thing is for sure: Equity Office Properties' $300 million redevelopment of Russia Wharf, which was supposed to include luxury condos, a hotel, office space, a jazz club, and a waterfront park, is frozen in place.

What's holding Equity Office up?

The firm says it's a lawsuit by its neighbor Brian Fallon, managing director of the developer of a hotel and condo project called InterContinental Boston and The Residences at the InterContinental, going up next door. Equity Office says Fallon just wants to finish his condos and sell them before more construction begins in the neighborhood.

''We were on a track, and it was a fast track," said Maryann Gilligan Suydam, senior vice president of Equity Office's Boston region. ''We were stopped in our tracks because of Brian's appeal."

Fallon said Russia Wharf has never been ready to go anyway, and that he is ''not delaying anything. We are simply being diligent to protect our property rights."

The dispute comes at a time when City Hall is pushing hard to get big development rolling again in Boston, especially along the Rose Kennedy Greenway, where these two neighbors are located. The mayor is disappointed.

''The lawsuit is a frivolous lawsuit by developers who want to protect their own and not allow a cornerstone of the waterfront to be developed," said Mayor Thomas M. Menino. ''It's a very selfish move."

Menino said Equity Office executives were given city approvals in May 2004. Except for the suit, ''Maybe they could have gone about development of their project while he still built his," Menino said.

The suit is over zoning. The city's board of appeal granted height variances and ''further zoning and building code relief" for Russia Wharf, Extell Development Co., said in its suit, filed in Superior Court almost a year ago. The suit sought an injunction against Russia Wharf construction, which it said would ''directly and adversely affect" Extell's property. Extell, of New York, was formerly known as Intell Development and Investment Co.

In its suit, Extell claims it was not notified of a hearing at which it could have objected to the height and other zoning variances.

Equity Office got the go-ahead from the city's Zoning Board of Appeal for a 395-foot-high tower, but it is not moving forward to seek the final approval it needs from the state, or with construction. The company continues to operate the three old Russia Wharf buildings along Congress Street, between the future Greenway and Fort Point Channel, even though some tenants have already moved out.

Fallon said Extell made a settlement offer to Equity Office last November, but Equity never responded.

Suydam responded: ''Equity Office consistently responded to everything we received from Extell."

Equity Office executives are particularly stung by Fallon's action, they say, because they supported Extell's request for its own zoning variances when Extell went through the city's process. In addition, they say, at Fallon's request -- and at considerable expense -- they redesigned and reduced the size of their building to accommodate the views of the future condo owners at the InterContinental.

The two sides have undertaken some negotiations but after months are still stuck on a few things, Fallon said. They include the location of a generator planned for the roof of Russia Wharf, and the extent and length of time Equity Office will be allowed to occupy some of InterContinental's property during Russia Wharf construction.

The InterContinental will have 130 condos, and 61 are sold. They sell for an average of $1.5 million, with the most expensive going for about $6 million.

Equity Office's current plan is for 50 loft-style residences fronting the Greenway, but it is considering adding more housing and reconsidering whether to include a hotel. The office tower will be built, Suydam said.

Despite all the rancor, Fallon said he isn't opposed to the project next door. ''We recognize that this is an important element of the revitalized waterfront neighborhood," he said.

Thomas C. Palmer Jr. can be reached at

© Copyright 2005 Globe Newspaper Company.

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