The University of Massachusetts System has approved a $235 million deal to lease Bayside Expo Center, the 20-acre waterfront site that sits next to the Boston campus. UMass officials on Thursday described the selection of Accordia Partners as the first major step toward redeveloping the 20-acre waterfront site that sits next to the UMass-Boston campus.
Accordia plans to build a mixed-use “urban innovation” project that will include commercial space and housing. Proceeds from the deal will go to UMass-Boston, which has faced serious financial issues in recent years.
University president Martin Meehan says the infusion of money would allow for campus expansion and new partnerships between the school and private companies. Some faculty members expressed concern in advance of the vote by UMass trustees that the lease could cause “long-term harm” for UMass-Boston.
The University of Massachusetts board of trustees and the university’s building authority both unanimously approved Accordia Partners to develop the 20-acre Bayside Expo Center site, which could yield up to 3.5 million square feet of new mixed-use waterfront development.
Accordia and its capital partner, New York-based Ares Capital Corp. (NYSE: ARES), will pay $235 million for the site’s ground lease. That’s nearly ten times the $18.7 million that UMass paid in 2010 for the Bayside site, located at 200 Mount Vernon St. in Dorchester. The site is currently used as surface parking lots.
“This is an extraordinary game-changer for UMass Boston,” Interim Chancellor Katherine Newman said. “It’s like the first day of the rest of our lives at UMass Boston.” Accordia and Ares have agreed to a guaranteed minimum price of $192.5 million and will also commit $25 million in infrastructure improvements. Lincoln Property Co. was the runner-up finalist, with an offer of $232.5 million. Newman said Accordia’s emphasis on diversity and inclusion in their hiring practices was “critical” to the university. She also praised Accordia’s commitment to the community. “Any project of this kind, in a peninsula with this history, depends on that kind of engagement,” she said.
Accordia is led by Richard Galvin, CEO of South Boston-based real estate development firm CV Properties, and Kirk Sykes, an architect and former chair of the Federal Reserve Bank of Boston. Galvin said the Bayside site could host up to 3.5 million square feet of mixed-use space, including academic and life-science focused space, residential and retail, as well as opening public access to the waterfront. He spoke of first getting to know the UMass Boston campus and its students five years ago, when his firm created a program connecting 60 students with internships in the real-estate industry.
UMass bought Bayside out of foreclosure for $18.7 million in 2010 and decided in 2017 to put it on the market after a deal with the Kraft family to build a soccer stadium there fell through. University officials saw a chance to capitalize on the region’s hot real estate market and offered it up to developers to build a mixed-use campus some have likened to a mini version of Kendall Square. According to a Boston Globe report, Rob Griffin, head of capital markets at real estate firm Newmark Knight Frank said, which brokered the sale, 30 developers toured the site. Six filed bids. From those, Accordia — whose principals developed One Channel Center in Fort Point, Crosstown Center near Boston Medical Center, and a variety of other projects around Boston — emerged as a clear winner, Griffin said. “It wasn’t close,” he said.
One key reason why: the willingness of Accordia and its financing partner, Los Angeles-based investment firm Ares Management, to pay more money up front. Of the $235 million Accordia offered for the 99-year-lease, $192 million will be paid when the company’s development plans receive initial state and city approvals — a milestone Accordia expects to hit within 18 months. Runner-up Lincoln Property Co. offered $232.5 million but wanted to spread the payments over a longer time period, according to Newmark’s presentation to the school’s board.