WTF Happened?

Carol Sawyer Parks is watching the testimony from the gallery. The matriarch of the Sawyer family, Parks has an angular face with a long chin and long nose, topped with a shock of platinum hair. The dark eye shadow she wears serves only to set off the paleness of her skin. Sitting next to her is her granddaughter and assistant, Hannah; Parks’s son Joe is a vice president at the company. Sawyer Enterprises has been a family business since it was run by Parks’s father, Frank Sawyer, a junior high dropout from the West End who started Checker Taxi Company in the 1920s with $5,000. He parlayed that business into a real estate empire of buildings and parking lots that at one point included almost half of all downtown parking spaces. By the time he died in 1992 at the age of 97, his business was worth more than $150 million.

Parks learned at her father’s knee, accompanying him to garages to meet with cab drivers, and later managing several of his properties. “He would take us around with great pride,” she recalls. That pride was evident in his business dealings, as Sawyer blocked development of some of the city’s most iconic properties — Post Office Square, the Four Seasons Hotel, and, ironically, the Prudential Center — refusing to sell parking lots that stood in the way, often demanding top dollar before parting with them.

After her father’s death, Parks took over the business and hired John Connolly, the former development adviser under Mayor Ray Flynn, and over the years she has done well both for herself and for the city. She owns multimillion-dollar homes in Colorado and Florida, and has donated millions to charities including Rosie’s Place and the Home for Little Wanderers. In 1995 Suffolk University rededicated its business school the Sawyer Business School, and in 2006 Parks gave $1.5 million to endow the Carol Sawyer Parks Chair in Entrepreneurship.

Parks’s first project with Connolly was the wildly successful Niketown building on Newbury Street, which involved luring one of the world’s strongest brands to what had been a Sawyer parking lot on a blighted stretch of the city’s most fashionable street. “To build something that was a statement on the street — that looks like something that has always been there — is very powerful,” Parks says.

Fresh off the Niketown success, Parks sought another home run in 1999. She and Loews Hotels explored putting a new hotel at the corner of Stuart and Tremont streets, building on a parking lot her father had acquired during the Depression. Tussles with neighbors delayed the project until August 2001, and just as Sawyer went to the banks for financing, 9/11 decimated the economy and froze up credit lines needed for construction. Parks watched helplessly as the Ritz-Carlton was able to fund the building of a hotel down the street by selling upscale condos to wealthy young urbanites and empty-nesters with a new interest in city living.

Other Boston hotel-condo projects followed — including the InterContinental in 2006, and Battery Wharf and the Mandarin Oriental in 2008 — and Parks and Connolly adopted the strategy for their own plans. If Parks had learned anything from Niketown, it was that the right brand could transform a neighborhood. And she had just the hotel brand in mind. The W by then had attained cultlike status among young travelers thrilled by its over-the-top design and its patented Whatever/Whenever promise of anything at any time, so long as it’s legal.

When Sawyer first announced its plans to bring a W to the location, the reaction was overwhelmingly upbeat. The Globe declared that “the Hub has finally shed its frumpy and frugal Yankee image.” One editorial called it “the driving wedge of what some have called the Manhattan-in-Boston movement” — as if that were unquestionably a good thing.

Then, once again, Sawyer ran into bad timing. Pulling off a major real estate project is only slightly chancier than rolling two hard eights back to back at the craps table, then putting all of those winnings on a single number on the roulette wheel. It can take years for a developer to get the permits it needs, and by that time economic cycles can change the worth of a building before a shovel even hits the ground. The first signs of trouble for Sawyer came in the fall of 2007, when the German bank that had agreed to finance the project suddenly stopped making loans anywhere in the U.S.

Sawyer was forced to pay for construction and permitting at the same time it was desperately looking for new financing. At the 11th hour, it received an offer from Prudential, which said it would give Sawyer $192.2 million…at the wince-inducing interest rate of 9.5 percent. Prudential must have smelled desperation, because the rest of the financing package it offered actually made the interest rate look appealing. If Sawyer defaulted on the loan it would lose the hotel and condos, including its own $60 million investment in the project. The company and its affiliates would also put up another $35 million in properties and other collateral. Sawyer agreed to these terms in order to build its hotel, which went up rapidly over the next few months.