The man who helped reinvent New York's vibrant Soho and Florida's South Beach had a similar bold vision for Boston's Summer Street neighborhood. But that was a year ago. Since then, Tony Goldman and investment partner Archon Group have sold seven of the 17 properties that were to be the building blocks of a revitalized 24/7, live-work-play district in the Fort Point Channel area.
And now they have put two more buildings on the market - 316 and 322 Summer St., historic warehouse structures whose renovations were to kick off the transformation of Summer and adjacent side streets. The city approved the prominent brick buildings for conversion into luxury condos, but the residential market has cooled significantly in the last year. "We found it very difficult to do that project in an economically feasible way," Goldman said in a telephone interview yesterday. "The construction costs being where they are and the market being where it is, it doesn't pencil out."
Rather than just sitting on the properties, they're being offered for sale - for use as office space instead because that market is roaring. "This was bought under one scenario," said Michael G. Smith, a principal at Jones Lang LaSalle, who is marketing the properties for the owners. "If they can make the same sort of return without spending the time and energy doing so, my sense is they'll do it."
Bids are due today for the buildings, which Smith estimated could draw a dozen potential buyers and may ultimately sell together for about $18 million. Archon, a unit of the investment bank Goldman Sachs, paid $92 million for a big chunk of the old Boston Wharf Co. portfolio in 2005, and Tony Goldman joined as the visionary developer.
Tony Goldman (not related to Goldman Sachs) said the plan has always been to resell some of the properties and to develop others, creating a lively 21st century urban location where even families would settle. "If you get the street where it needs to be, like a garden, it grows in a very healthy way," Goldman said in September 2006. But after 316 and 322 Summer are sold, only two of the development team's original 10 buildings facing Summer Street will remain in its control. The others have been sold to four new owners.
Was last year's vision just an illusion?
"The vision that was clear, was articulated and presented to the city - that was truthful," Goldman said. Goldman called Archon executives "great partners" but suggested he would not have given up as soon as they did on developing 316 and 322 Summer. "My history has been much more long term," he said. "They have a little bit of a different timetable. I knew that going in."
He acknowledged being disappointed at not being able to turn those two buildings into condos. "I would love to have done that myself, that's true," he said. "But I would be equally as joyful if that is tenanted with a creative class of commercial tenants that fill the streets, service the retail, and fill the restaurants. To hand it off to some chump just because he would pay the price - that's not in the cards," Goldman said.
Neighbors of the area, including tenants who were removed from the now-empty 316-322 Summer St. buildings, were skeptical after Archon and Goldman bought the properties and trumpeted their vision to remake the neighborhood for luxury living. Some are upset now that, not only has that transformation not taken place, but a year later there's been little improvement.
"Buildings that had been full of small businesses and artists are now empty," said Valerie Burns, a 24-year resident of nearby A Street. "That has really created in certain parts of the neighborhood a much more desolate and even unsafe place."
Archon and Goldman ha
Source: Boston.com