A new team of investors is set to resume construction of the massive NorthPoint development, a $2 billion mini-city between Cambridge and Boston that will bring thousands of new homes, a shopping complex, and offices to a former rail yard.
The 44-acre project, stalled since 2007 because of legal and financial issues, is one of the biggest in the state and promises to transform a huge swath of vacant industrial land into a new neighborhood along the MBTA’s Green Line, whose planned extension through Somerville will start at the property’s edge.
The first phase, which could begin next summer, is expected to create 250 jobs, with thousands more to come as building activity picks up over the next several years.
The new development team includes a California investment fund backed by former Los Angeles Lakers star Earvin “Magic’’ Johnson, who appeared at an event on the property yesterday to formally relaunch NorthPoint with the mayors of Cambridge and Somerville.
“This great, mixed-use project is going to create a lot of jobs and a lot of opportunity,’’ said Johnson, who spoke about his firm’s investment in the region just down the road from the site of the old Boston Garden, where he had legendary playoff battles with Larry Bird and the Boston Celtics .
‘The transformation in this area is going to be breathtaking.’
“Red Auerbach would be rolling in his grave,’’ Johnson quipped, drawing laughter from more than 200 public figures and business executives at the event.
Johnson’s partners include former Boston Redevelopment Authority director Thomas N. O’Brien.
The first phase will consist of 350 apartments, as the developers seek tenants to occupy 2 million square feet of office and retail space.
Within the next decade, NorthPoint - located across from the CambridgeSide Galleria on land in Cambridge, Boston, and Somerville - will consist of 22 buildings and public parks on what is now a gritty canyon.
While it could attract the pharmaceutical and technology companies that have fueled explosive growth in nearby Kendall Square, the project also faces a struggle to regain momentum following a construction stoppage that has lasted more than four years.
Work stalled in 2007 because of a bitter lawsuit between its former owners. The logjam finally broke last year, when Johnson’s company, Canyon/Johnson Urban Funds, acquired the property in a partnership with O’Brien’s firm, HYM Investment Group of Boston, and Atlas Capital Group of New York. Canyon/Johnson acquires and redevelops large properties across the United States and has worked on projects in Houston, Los Angeles, and New York.
So far, only two residential buildings have been built at NorthPoint since construction began in 2005. The development’s progress relies, in part, on the long-delayed Green Line extension project, which will start at Lechmere Station, an outdated transit stop next to the NorthPoint site.
Under a new agreement with the state, construction and relocation of the new, $70 million Lechmere Station will be funded through the extension project. The developers and Pan Am Systems Inc., an equity partner that previously operated the rail yard, agreed to give the state land, railroad right-of-ways in other parts of Massachusetts, and $12 million in exchange for public funding of the station. The Green Line extension is under design but still awaiting federal funding commitments.
O’Brien said the developers have begun to redesign NorthPoint’s retail space into a “town square’’ format that it hopes will become a shopping and dining destination.
“The retail should be something fresh and distinctive,’’ O’Brien said, adding that the developers will try to draw from the atmosphere of nearby Inman Square.
“It also should be a place where people can buy their groceries and stop at a few great restaurants.’’
Real estate specialists said the biggest challenge facing the developers will be competing for lab and office tenants with Kendall Square, which already has the Massachusetts Institute of Technology, Red Line train service, and more than 2 million square feet of commercial space ready for development.
“They have to have a compelling reason for why tenants should choose NorthPoint instead of one of the developments in Kendall,’’ said Mark Winters, a managing director for the real estate firm Cushman & Wakefield.
“There is demand for this type of site,’’ he said. “The question is whether [office construction is] going to happen in this market cycle or the next one.’’
With help from Johnson’s visit, the project generated an unusual amount of buzz yesterday, with Mayor David Maher of Cambridge and Mayor Joseph Curtatone of Somerville appearing alongside the former NBA player to promise that it will bring new jobs and commercial vibrancy to the property.
“The transformation in this area is going to be breathtaking,’’ Curtatone said.
“The next wave of innovative and growing companies is going to be located right here. ’’
NorthPoint is moving forward in concert with Somerville’s 66-acre Assembly Row development, where construction on hundreds of homes, stores, and an expanded waterfront park will ramp up in the coming months. That development will eventually include an Ikea furniture store, office buildings, restaurants, and a new Orange Line MBTA station.