A Glimmer of Hope on Filene's
Nah, there’s probably not. Let’s be serious, we are talking about the Filene’s site. BUT, if I were to put on my rose-colored shades and stare at a half-full glass for a while, I might find hope for the much maligned hole in Downtown Crossing in this morning’s Globe story about the resurgence of the Boston office market.
According to the broadsheet, 11 office-buildings were sold in the city last year — a four times increase over 2010. That activity is a sign of the business community shaking off its recessionary blues. Demand for office space is up, leading to higher rents, making the office buildings more desirable to buy and sell.
Now why does this matter for the Filene’s memorial hole? A quick review: Vornado, a New York real estate trust, bought the Filene’s site for $100 million in 2006, intending to knock down the old buildings and build a sparkling new mixed-use tower, filled with retail, residential, and office space. In April 2008, they went ahead and began demolition, excavating a really nice hole in the ground for us. Then the economy cratered and the building’s financing fell through. Plans for the sparkling mixed-use tower were shelved. Since then, much to Mayor Tom Menino’s ire, Vornado has just let the site sit.
Vornado’s investment in the site was based on the idea that they would be able to reap the profits of an office and condo building. But for the last few years, those markets have been weak. Letting the site sit costs Vornado virtually nothing, so the New York firm’s basic calculation has been that it can afford to wait until those markets come back (regardless of the negative repercussions its blight has on the rest of the city). The apartment sector has been hot enough that Vornado likely could have built an apartment building in Downtown Crossing by now and filled it up no problem, but it wouldn’t have made them as much money. Vornado boss Steve Roth is known for driving the hardest bargain in the business, and Menino be damned, will likely only build when he sees the chance for maximum profit.
But now, with the condo market looking up and the office market finally joining it, Vornado is running out of excuses not to do anything. Especially considering that, as a 20 percent owner of Suffolk Downs, the East Boston track aspiring to open a casino, Vornado could seriously help itself by placating Menino. Of course, at this point, rooting for construction at the Filene’s site is a bit like rooting for the Red Sox before 2004. Sure, there was no good reason the Red Sox couldn’t win the World Series, it just seemed impossible to imagine that they would. Likewise, as reasonable as it might seem to finally get to work on the massive hole at the heart of the city, after nearly six years, it’s almost impossible to imagine that anything will ever happen.