Filene's: The Couldas and Shouldas

I’ll start with an apology, because I meant to write last week about the deal to finally fill in the hole at Filene’s in Downtown Crossing. Unfortunately, some game in Indianapolis which I don’t remember the ending of distracted me for a bit. But really, if there was ever a topic it was appropriate to stall on writing about, this would have to be it, right? After all, Vornado, the New York real estate firm that controlled the pit in Downtown Crossing’s destiny for so long, left that lot sitting there empty almost four years.

Nevertheless, at long last we have action. Millennium Partners, another New York outfit, will take the lead, with plans to build a 600 foot, $500 million tower, complete with apartments, office space, and retail. This is great news! The irony, of course, is if that building existed today, it would kill. Demand for apartments has never been greater in Boston and the office space market is going well, too. If Vornado had the foresight to invest in something like this a few years ago, they’d be making a killing right now, instead of being forced to compete with the gobs of other residential buildings now going up around the city.

None of that is lost on local developer John Hynes, who was Vornado’s man on the ground here in Boston on the original project, essentially quarterbacking the thing and helping conceive the design for One Franklin, the tower Vornado had intended to build before the market collapsed in 2008 and work stopped. Hynes, CEO and managing partner at Boston Global Investors, says that ever since the initial failure, he had worked to come up with alternatives, all the way up until two days before the Millennium deal was announced. That’s when he got the call from JP Morgan (previously a minority investor on the project) telling him he was out.

“I wanted Vornado and JP Morgan to do that three years ago when the office market dried up and the residential market started to respond,” he says, referring to the new building concept. “We actually had proposed several residential [buildings], but they weren’t ready to do it and they didn’t want to do it with us with their own money.”

“I think the quote we used in our meetings was, ‘Look you’ll be the only girls at the dance, you’re going to get your dances,’ and it fell on deaf ears. And I’m not pointing fingers at Vornado or JP Morgan — nobody wanted to do it, nobody bought that belief. Now, of course, everybody’s jumping into the pool,” Hynes says.

Even in the depths of the recession, Hynes believes, you could tell that demand for apartments in Boston was high. There are always tons of people flooding into the city, and with fewer people buying homes, more people were leasing, putting added pressure on the rental market. Of course, that’s all hindsight now.

As for Hynes himself, he says that after five years working on the Downtown Crossing project, he’s disappointed to be kicked to the curb, but happy the project is moving forward. “This one is a little more meaningful because of its size and the amount of time and money I spent on it,” he says.

On the upside, the developer says it’s a big monkey of his back, and that being through with Filene’s will give him more time to focus on his project at Seaport Square on the South Boston waterfront. And now that the Downtown Crossing project is finally moving forward, he’s hoping that maybe, finally he might be freed from Mayor Tom Menino’s bad side.

“Hopefully with [Downtown Crossing] moving forward and our projects with Seaport Square moving ahead, our relationship with him will improve,” Hynes says. “It’s no fun being in the mayor’s dog house, I can tell you that.”