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Owners of Boston Site Pitched for Amazon's HQ2 Have 'Plan B' in Place

While Rivals Jockey for Position, HYM Investments Prepares to Develop 161-Acre Site 'With or Without' Online Retailer
September 7, 2018
Thomas N. O'Brien is a founding partner and managing director for HYM Investment Group in Boston. His firm's Suffolk Downs site is considered a leading contender for landing Amazon's second headquarters; Photo credit: HYM Investment Group.

Tom O’Brien isn’t waiting for his phone to ring. That alone sets him apart from most of his counterparts in the other 19 cities that online retailer Amazon is considering to be home to a massive second headquarters.

As the head of the ownership team of Boston’s favored site to be home to the project known as HQ2, he could be excused for following every incremental step of the selection process and trying to divine clues as to which markets Amazon may be favoring. Instead, the chief executive of Boston’s HYM Investments is plowing ahead with his original plan for the 161-acre site north of downtown Boston that calls for mostly apartments with some restaurants and office space to come later.

Frankly, he said, if Amazon chooses the site as its HQ2 home when it selects from among the finalist cities later this year, it would be welcome - but also would mean a lot of extra paperwork to change from his current project. That's a starkly different stance from most finalists because unlike most of the 19 other cities, he's got a clear alternative development plan already in the works for his site.

"Honestly? This Amazon thing just kind of crashed into our world," he said in an interview. "But our site is going to work with or without them."

 Read More CoStar Amazon HQ2 Coverage 

To hear Seattle-based Amazon tell it, whichever city wins its bidding process will be home to a $5 billion project with 50,000 jobs that will serve as a hot economic engine in their market for years to come. That's led to cities offering tax breaks and other incentives to try to outdo their competition to lure HQ2.

But while the guessing game about the HQ2 announcement and its 8 million-square-foot second headquarters surges on unabated, O’Brien shrugs.

"If Amazon is really interested, hey - come talk to us," he said. "But we’re moving ahead. Our permits will be completed in the next four months. We’ll start construction in the next 12 months."

HYM bought the site that is now one of Amazon’s 20 finalists back in May 2017, before the fight for HQ2 was even announced, a fight that started with 238 bids from municipalities across the country. The property spans both the northern edge of Boston proper and the small, rough-edged city of Revere. Known locally as Suffolk Downs, the site was long used as a horse-racing track with an up-and-down history of success.

Redevelopment plans for the area have come and gone over the years. But after a year of research and due diligence, HYM decided Boston’s housing market was ripe for a relief valve. A massive live-work-play project could work, they figured, up along the Blue line of the MBTA, the public transportation agency for the greater Boston region. The developer's plan is to offer people new apartments that rent for less than the fancy new downtown units going up - and add some shopping and dining, and it could work.

HYM bought the land for $155 million last year.

In September, O’Brien got a call from an employee telling him that Amazon had just issued a request for proposal for a second headquarters location. They wanted a big space, lots of land, with access to highways, an international airport and public transportation. They also wanted access to highly educated, tech-savvy workers.

"It became clear: they were talking about us," said O’Brien.

Quickly working with Revere and Boston officials, HYM helped put together a 200-page proposal to Amazon touting the market’s benefits: A huge supply of well-educated young people from area colleges and universities, abundant land, expressways and subway lines. More than 230 other cities did the same by November. Amazon cut it to 20 finalists in May, but has not given a deadline for its final decision.

The offer still stands, but O’Brien and HYM aren't standing still.

Plans for phase one of the re-development call for about 1,100 apartments and 80,000 square feet of retail space - mostly dining and bars. Since acquiring the property last spring, O’Brien estimates he’s attended about 300 public meetings, including planning boards, zoning boards, city councils and community groups, to explain the plans and answer questions.

The site already gained preliminary approval for two office towers totaling 500,000 square feet, should Amazon select it for its HQ2 project. O'Brien said HYM secured an unnamed equity partner to help defray the land acquisition and planning phase costs, and has begun talks with long-term institutional-sized players for partnerships in the actual development.

O’Brien wants to make it clear he isn’t indifferent to the HQ2 contest. While some observers have compared Boston’s attitude toward landing HQ2 to the city’s half-hearted - and ultimately unsuccessful - bid for the 2024 Olympics, he disagrees, saying he would love to have them come to Boston.

"This about the next 50 years," said O’Brien, describing Amazon’s potential impact on the region it selects. "No other company has ever existed like them on the face of the earth."

Still, he said, it’s always good to have a Plan B.

John Doherty, Multifamily Reporter  CoStar Group   

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