A revised lease agreement with the Massachusetts Turnpike Authority (MTA) has not jump started the $650 million Columbus Center air rights project, which remains stalled by financial trouble.
A spokesperson for the Columbus Center development (WinnDevelopment) said there is no timetable to begin construction on the project, which received approval more than a year ago. Columbus Center, a mixed-use development consisting of a hotel, office space, retail space and residential condo units, will be built on air rights Parcels 16,17, and 18 over the Turnpike east of Back Bay Station.
“The project remains on hold while the financing is worked out,” said Alan Eisner of Regan Communications. “The status quo hasn’t changed in recent weeks.”
This winter, WinnDevelopment received a new lease from MTA which allows the developer to defer upfront payments in exchange for large ones in the future. Columbus Center may also receive federal tax credits through the Department of Housing and Urban Development’s Empowerment Zone program, which encourages businesses to employ local residents.
Despite those potential financial benefits, Columbus Center is not any closer to breaking ground, due largely to ballooning construction costs. For example, the cost to build the concrete and steel deck to cover the Turnpike has escalated from $30 million to $140 million since the project was first conceived. Additionally, the costs of public benefits for the project, which include three public parks, affordable housing both on and off site and workforce development payments, may also increase beyond the original estimate of $40 million. The final project cost could increase to as much as $700 million, depending on financing.
Winn Development’s lone equity partner in the project, the California Public Employees’ Retirement Systems, issued a statement in August saying that the Columbus Center Condos were in danger of not being built.
The majority of this blog post was based upon a recent story from the Boston Courant Newspaper.
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