The following article appeared in the Wall Street Journal (New England Edition) on Wednesday June 2, 1999.

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June 2, 1999

 

Dow Jones Newswires

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After Two Failures, Hyatt Takes

New Tack With Boston Pier Project

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By Geeta O'Donnell Anand

 

Pitching a $1 billion proposal to transform the South Boston waterfront, Dan O'Connell

sounds more like a politician doling out pork than a real-estate developer.

 

At a community meeting last week, he promises that a memorial to Richard Cardinal

Cushing will rise by the water, as Stephen Lynch, the neighborhood's state senator, has

requested. A monument to the city's police force will be erected at the suggestion of

Councilor Francis M. Roache. Local retailers will be given a chance to lease storefronts, as

Councilor Peggy Davis-Mullen has recommended.

 

There's more, he tells the people of South Boston. A water shuttle will take visitors along

Boston Harbor to the John F. Kennedy Library and Museum, at the request of Sen. Edward

Kennedy. The hotel on one end of the project will be recessed to make way for a gathering

place called Courthouse Square, at the suggestion of area congressman J. Joseph Moakley.

 

The presentation comes after months of politicking by Mr. O'Connell, a principal at Boston

development company Spaulding & Slye Colliers International, which is the local manager

for the waterfront project.

 

In close to 300 meetings in 300 days, Mr. O'Connell's team has been trying to absorb the

often conflicting demands of politicians, neighborhood groups and environmentalists into

its blueprints. Along the way, Mr. O'Connell has tried to smooth the relations between the

city and his bosses in the project, Hyatt Development Corp. of Chicago.

 

Mr. O'Connell's strategy for the massive project seems to be succeeding where Hyatt's

previous attempts have failed. His designs are winning support in South Boston, a

neighborhood notorious for its distrust of outsiders. And politicians -- thus far -- are quietly

falling behind his banner.

 

His development team has discovered the reality that selling a project in Boston is more

like running for mayor than putting up a building.

 

"Development in Boston is different from the rest of the country," says Kyle Warwick, a

Spaulding vice president who coordinates the project for Mr. O'Connell. "When I did a

project in Reston, Va., it was 10% campaign and 90% planning and design. Here it's 40%

campaign."

 

If the project clears all the political, regulatory and economic hurdles, it would be one of

the biggest private developments in the history of New England and far and away the most

costly and ambitious of any currently under way.

 

Twenty acres of the as-yet-undeveloped waterfront in South Boston would be turned into a

bustling new neighborhood of hotels, shops, offices and condominiums. The scale is so

large and the terrain so undeveloped that the company would actually build nine city

blocks -- from the sewers and streets and sidewalks up to the hotels and office space and

condominiums.

 

All of this would rise on a plot of land called Fan Pier, five minutes' walk from Boston's

Financial District.

 

The first effort to develop the area fizzled in 1987, when Hyatt and its partners sued one

another. The second try blew up a year ago, when the city administration, facing

opposition from the insular and politically powerful South Boston neighborhood and

several harbor-interest groups, withdrew its support.

 

Almost all of the interest groups felt the company tried to short-circuit the approval

processes. For one, Hyatt suggested that it was exempt from state environmental review,

and thus not subject to the same rules as other coastal properties. This effort in particular

irritated environmental groups.

 

Hyatt also tried to convince the city that since the 1987 project technically was still alive

and had already passed muster, the approvals carried over into 1998. In addition, the

company presented its project as a fait accompli and didn't hold enough public meetings,

says Boston Redevelopment Authority Director Thomas N. O'Brien.

 

Finally and fatally, Hyatt representatives alienated Mr. O'Brien, whom they said had signed

on to their plans and then changed his mind.

 

Then, a year ago, along came Mr. O'Connell, who lobbied Hyatt to make another go at it

with his firm as the local project manager. Leveraging his personal connections -- he is a

close friend, for instance, of Mr. O'Brien, who once worked for Mr. O'Connell -- he has

assembled an experienced team of urban planners, architects, and retail and commercial

real-estate specialists.

 

Experience -- and a deft touch -- is called for in South Boston, which killed the New

England Patriots' plans to move into its neighborhood and always views new development

with great suspicion.

 

"Good design makes good politics, but particularly on this project, you also need good

politics in and of itself," says Mr. O'Brien.

 

Mr. O'Connell's credo is to roll with the punches and adjust to changes rather than fight

them. The most painful, to his designers, was lowering the height of a signature building

from 344 feet to 298 feet -- in keeping with Mr. O'Brien's insistence that all buildings in the

development be under 300 feet. Even though doing so made the buildings in the plan

more similar in height, and as such gave the skyline a wall-like feel, Messrs. O'Connell and

Warwick relented and moved on.

 

The game plan seems to be working. The Hyatt team has met four times with City

Councilor Jimmy Kelly of South Boston, who says, "I'm still worried about traffic, but I think

it's a good plan overall."

 

Maryann Crush, a committee head of a residents' group, called the plan "intimate and

interesting" and says, "It will grow on people."

 

Perhaps Mr. O'Connell's heaviest lobbying has gone toward winning over the influential Mr.

Kelly. The city councilor worries blue-collar South Boston residents will be displaced by the

gentrification already under way and that the Hyatt development will further it.

 

Mr. Kelly wants Hyatt to invest in "a substantial amount of housing" in the neighborhood

and sell it below market prices. He says this will be possible because a neighborhood trust

will buy the land and donate it to Hyatt so the company's costs will be lower.

 

Mr. Kelly says he and Mr. O'Connell are talking about more than 100 apartments and

houses, but neither man will reveal more details. In this venture, Mr. O'Connell is keeping

Mr. O'Brien very much in the dark. "He's being very coy," Mr. O'Brien says.

 

Negotiating with Mr. Kelly is a particularly delicate task for Mr. O'Connell because Mr. Kelly

and Mr. O'Brien are publicly feuding over, among other things, what to name the

waterfront area.

 

Mr. O'Brien prefers to call it the Seaport District to give it a separate, distinct character, and

he wants as many as 8,000 apartments to create a vibrant neighborhood there. Mr. Kelly

insists the area be called the South Boston Waterfront in deference to the neighborhood

and argues for fewer than 4,000 units to keep from overwhelming the nearby residential

areas.

 

Mr. O'Connell's team is laying low to avoid the controversy. "Whatever name they agree on

is fine with us," Mr. Warwick says. But at the neighborhood meeting in South Boston last

week, Mr. O'Connell adopted Mr. Kelly's lingo, calling the Fan Pier area the South Boston

Waterfront.

 

Mr. O'Brien laughs and says, "I can't believe it. He caved."

 

Mr. O'Brien himself, however, has begun to move away from his original position and now

proposes a compromise: calling the area the Seaport District of South Boston. For his part,

Mr. Kelly says that's still not good enough.

 

Talking to politicians is only part of the Hyatt team's very broad political campaign. Mr.

Warwick spends much of his time talking and meeting with harbor-interest groups. For

instance, he has met eight times with Vivian Li, head of the Boston Harbor Association, a

nonprofit advocate for public access to the water, and Beth Nicholson, a leader of Save the

Harbor/Save the Bay, a group dedicated to preserving the harbor.

 

At Ms. Li's suggestion, the Hyatt team says it made the Harbor Walk extra wide -- 42 feet

across in some parts. Ms. Nicholson's group pushed for a bike trail and bike racks along the

harbor walk, and they are now written into the plans. The Seaport Alliance for

Neighborhood Design, a South Boston group made up mostly of artists, wanted to see

some lofts, so those are now being considered, Mr. Warwick says.

 

"If someone advocated something we thought made sense, we went with it," he says. "It's

much better to have their input and support now than find out down the road they don't

like something. And I really, sincerely believe it makes for a better plan."

 

Mr. Warwick carefully transcribes the outcomes of all of these meetings into a database.

"Favorable reaction to new focus," Mr. Warwick writes of a Boston Harbor Association

meeting last fall.

 

To be sure, Mr. O'Connell and his team have made their share of mistakes. Last winter, he

temporarily alienated Mr. O'Brien, whom he has been close to since the two worked

together at the state's economic-development agency, then called the Massachusetts

Industrial Finance Agency. Mr. O'Connell ran the agency and Mr. O'Brien was a project

manager whom he promoted to chief lawyer.

 

Mr. O'Connell, partly because he knew Mr. O'Brien so well, felt comfortable publicly

criticizing a quota plan Mr. O'Brien put forward for the waterfront. Mr. O'Brien was furious,

by both men's accounts.

 

His spokeswoman, Kelley Quinn, says she called Mr. O'Connell's spokeswoman and said,

"Dan cannot take advantage of his friendship with Tom to criticize him publicly like this."

 

Mr. O'Connell's advisers responded immediately by censoring him. Pam McDermott,

whom he hired to do public relations, returned all of Mr. O'Connell's calls from the media

for months.

 

Indeed, the ordinarily loquacious Mr. O'Connell disappeared so completely from the public

eye that when he finally surfaced, a newspaper reporter "asked me whether I'd been fired,"

Mr. O'Connell says.

 

Since then, relations between the two men have warmed. They dine together regularly and

talk almost daily about the progress of the development.

 

In fact, Mr. O'Brien says it was his suggestion that brings Nick Pritzker, president of Hyatt,

to Boston at least once a month.

 

"I told him he can't be Nick Pritzker of Chicago. He's got to become a presence in Boston,"

Mr. O'Brien says.

 

Mr. Pritzker made his social debut last fall by sponsoring the Island Alliance dinner,

attended by Mayor Thomas M. Menino and the city's political and social elite. Mr. Pritzker

paid $10,000 to sponsor the dinner and gave out 20 scholarships of $500 each to a camp

organized by the Children's Museum.

 

In recent months, Mr. Pritzker has been showing up at charitable events and dropping in

on the mayor, the governor and other politicians. Mayor Menino says Mr. Pritzker has been

in his office three times this spring.

 

"He's basically a good guy," the mayor says, adding that he likes the Hyatt plan, particularly

"the way they use the water," though he remains concerned about the sheer size of the

development.

 

The politicking is never-ending. On March 24, Mr. O'Connell and Mr. Warwick flew to

Washington to present their plan -- complete with an artist's rendering -- to Sen. Kennedy.

They flew back for dinner that night with Mr. O'Brien.

 

"If Sen. Kennedy bumps into Mayor Menino, we're hoping he'll give it a good word," Mr.

Warwick says.

 

He and Mr. O'Connell spent 11 hours one day last week presenting their latest plans to

special-interest groups. Still, not everyone is happy. The Boston Society of Architects, for

one, thinks a building planned near the courthouse is too dense and would create a

cavernous feeling in the street below. The Boston Harbor Association argues there isn't

enough open space.

 

For Mr. Warwick, this means more meetings. "We'll have a working session with them, we'll

change the plan and shift mass away from the courthouse," he says. "We're not done yet."

 

 

Copyright © 1999 Dow Jones & Company, Inc. All Rights Reserved.

 

 

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