"Currently the office market appears to be stronger, but that could change next year"
Tony Goldman, Archon GroupThe BRA says the team is pursuing final design approvals and has not filed any notice of plans to change.
reported in Boston Business Journal (below)
© 2007 Boston Business Journal
Residential growth stalls in Fort Point
by Michelle Hillman, Journal StaffSo much for Boston's SoHo.
In the two years since buying 17 former Boston Wharf Co. warehouse buildings, New York's Archon Group LP and its partner, Goldman Properties Co., have made little progress lifting up the Fort Point Channel neighborhood, once billed as the city's version of Manhattan's SoHo district.
Since then, Archon and Goldman have sold off six buildings in the portfolio that it acquired for $93 million in 2005. The team purchased the buildings along Summer, Melcher and A streets with the intention to create a vibrant, urban neighborhood with sidewalk cafes, restaurants, galleries and luxury residences.
Last June the team received approval from the Boston Redevelopment Authority to convert the buildings at 316-322 Summer St. into 87 residential units, including artist live-and-work space, 15,500 square feet of retail and commercial space and 17 parking spaces in the building. According to a release issued by the BRA at the time, Archon and Goldman planned to start construction on 316-322 Summer St. in December of last year.
Goldman said the plan is still to stimulate street life in the Fort Point District, with retail being a vital component. He's banking on workers from the Financial District and visitors from the Boston Convention and Exhibition Center to populate the streets.
While sources say Archon and Goldman are reportedly nixing plans to build residential units, Tony Goldman, chief executive of Goldman Properties, would not abandon the idea that he could move ahead with residential development at some point. The BRA says the team is pursuing final design approvals and has not filed any notice of plans to change.
Currently the office market appears to be stronger, but that could change next year, said Goldman.
"We're pursuing our original vision, which was a mix of uses in the district," said Goldman. "A number of buildings were originally designed to be converted to residential. That plan is still in motion. We're not satisfied with the pricing. The intention has always been to convert a number of buildings to residential. If the market cooperates then you can execute your plan."
Goldman said he's assessing market conditions and will move ahead with residential when the time is right and the numbers make sense. He wouldn't disclose the pricing he needs to achieve to get started. "The hope is the marketplace will pay for what we've designed," said Goldman. "I'm trying to make the residential happen. There's a lot at stake, so you need to be able to be real clear and real confident in your decision and we're not there yet."
The average sale price of condos in the Seaport District, which includes the Fort Point Channel, is $627,000, said Mary Kelleher, a residential real estate broker at Gibson Sotheby's International Realty in the South End.
As the Archon and Goldman team weighs its next move, a nearby competitor, Berkeley Investments Inc., is moving ahead with one of the only residential buildings under construction in the Fort Point Channel neighborhood, called FP3.
The development -- which is actually three properties along Congress Street -- broke ground in April and features loft-style units as well as penthouses.
Young Park, president of Berkeley Investments Inc., is comfortable with the progress made on the pre-sale of units so far. Park said 20 of the 97 units have been sold despite the fact that the David Hacin- designed building will not be complete until next year. Park has managed to lure residents to an underdeveloped and unproven neighborhood with the help of local celebrity chef Barbara Lynch who will open three restaurant concepts at FP3.
While Archon and Goldman might be having second thoughts about converting two existing buildings into luxury residences, Park has no qualms about his position in the market. In fact, Park said he is now considering options for 381 Congress St. that include residential, hotel or office uses.
"We're very comfortable with our strategy," said Park. "We don't have any concern about the district."
Michelle Hillman can be reached at mhillman@bizjournals.com
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