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Want to Do a Transit Project? Don't Forget the Patience

Ambitious Mixed-Use Developments Are in Demand - But They Take Time
October 10, 2018
Hub on Causeway, a mixed-use, transit-oriented development at 100 Causeway in Boston, at the site of the now-demolished Boston Gardens sports arena.

Here’s the good news for developers dreaming of building a massive project with apartments, offices, stores and restaurants cozied up to a transportation hub: there’s a surge in demand.

The bad news? Construction of the transit projects will take a lot more time than the developers think because of the extra approvals that are needed.

Boston, Washington, Atlanta, Dallas, South Florida, and San Francisco are all in the throes of a transit-oriented development wave where new projects are located near inner-city bus lines, train stations and highways. That’s thanks to the developing love among employers and young renters to be in the heart of a city. While it's always taken longer to build when train lines and highways are involved, the surging popularity of urban areas for residential destinations is making the longer waits more acute.

"Young people especially want to be in places that, when we were young, were tough places to live in," said Tom O’Brien yesterday. O’Brien, managing director of HYM Group in Boston, has been developing in Boston for almost 30 years. "Younger people just don’t have those same memories about downtown that we do."

O’Brien was one of four developers from the city dishing to the Urban Land Institute’s fall conference in Boston about what makes ambitious transit-oriented development projects work. Among other projects, HYM has been patiently shepherding through the redevelopment of a garage in Boston’s Back Bay into a 2.9 million-square-foot office, hotel, retail and residential development along the lines of the local subway system, known as the MBTA, and 10 minutes from Logan airport.

The residential phase is set to deliver in 2020.
"Ten or 15 years ago, people didn’t think this was possible," said Chris Mahar, vice president of development for Delaware North. His company has been transforming the once dingy, shadowy site of the old Boston Garden sports arena into an office, retail, hotel and residential hub -- right atop the Boston subway and commuter system.

When they started in 1998, he said, most thought they were crazy: "People didn’t want to live here," he said.

They topped off the tower at the center of the project - the Hub on Causeway - the first of three phases this January.

Across the country, builders of transit-oriented developments are learning similar lessons. The office, retail and residential project planned for Atlanta’s Atlantic Station neighborhood by developer Hines has been in the works for 20 years, for instance. They broke ground in June.

Hines teamed with Boston Properties on the mammoth Salesforce Tower in San Francisco near the new Transbay Transit Center in 2012. But that was only after that project had lingered for more than a decade.

Most of the high-profile transit-oriented development projects need special approvals - not just from the city and states they're in, but from the separate transportation authorities that have jurisdiction over the site that developers are considering. That can add years to a project's horizon, say developers.

Paradoxically, some of Boston developers said the delays that can come with lengthy approval processes can actually help.

Mahar, of Delaware North, knew that The Hub on Causeway project next to the new Boston Garden -- officially named the TD Garden -- would be done in phases. He knew they would have to time the search for financing for each phase for when lenders were interested in funding new projects.

The same is the case with leasing a new building. Trying to fill a luxury hotel or Class A office building completed in the economic doldrums can be a disaster.

He said the developers weathered more than an economic downturn while the approval process inched forward. Along the way, the change in thinking about urban living and working also took hold as more people looked to live in cities. Living and working next to an arena no longer sounded as crazy in 2016 as it did in 1998.

“We knew we had to hit the market cycles at the right time,” he said. “We got lucky."

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