The developer of the $1.5 billion Assembly Row project is buying the former Ikea property on the Somerville site, where it may build a supermarket, homes, and offices, executives said Monday.
Federal Realty Investment Trust of Maryland has signed a purchase and sale agreement to acquire the 12-acre site from the Swedish retailing giant, which canceled plans in July for a 350,000-square-foot emporium on the property. The sale price was not disclosed.
Don Briggs, a regional manager for Federal Realty, said the deal will significantly expand the Assembly Row development, where construction is already underway on 450 homes, a theater and retail center, and new restaurants.
Located on the Boston-Somerville border, the project promises to remake a 66-acre swath of former industrial property along the Mystic River. Ikea was expected to be a major attraction for the development, but Briggs said he is optimistic the furniture store can be replaced by a food market, homes, and offices.
“While losing Ikea is unfortunate, I think over the long haul we will be able to continue the kind of development we’re seeing at Assembly Row,” Briggs said. “We’d love to bring a regional grocer to the site. It would be a great new amenity for this neighborhood.”
In addition to the grocery store, Federal Realty is exploring plans for two other buildings on the Ikea site — one to be offices and another to be residential. Those buildings would be next to the new MBTA station under construction on the property.
The developer still needs to finalize the purchase of the property, and get approvals from state and Somerville officials.
Somerville Mayor Joseph Curtatone offered support for Federal Realty’s concept on Monday. “This is very good news for the neighborhood and for the city,” he said. “Federal Realty has demonstrated that they share the vision for this property as a true urban neighborhood.”
Curtatone characterized the permitting hurdles as minor, and noted that existing rules allow for buildings as tall as 250 feet, or roughly 25 stories. “This creates an opportunity for greater density and more tax revenue for the city,” he said.
It will likely take several months to obtain approvals and sign tenants before moving forward with construction on the Ikea site. Briggs said Federal Realty is talking with several grocers, but declined to identify them at this stage of the negotiations.
Meanwhile, construction is underway nearby on the new Orange line MBTA station and the first major buildings at Assembly Row, which are scheduled to open in 2014. Two will contain apartments by AvalonBay Communities Inc., while another will be occupied by a movie theater and shops. Federal Realty is hoping to attract outlets stores and restaurants to the property.
And next spring the company will begin construction of an office and retail building along the Mystic River. The site was previously slated for a hotel or additional residences, but Briggs said there has been significant interest from office tenants.
“It feels like the [office] market is starting to turn,” said Briggs. “This is a perfect opportunity to create a corporate campus with a collection of technology companies enjoying all the new amenities on the waterfront.”