Business

Dudley Square retail space struggling to attract tenant

City’s plan for a big new Dudley Square eatery by Feb. stalls

The renovated Bolling Municipal Building in Dudley Square has some small-business tenants lined up but a large restaurant space sits idle.
David L. Ryan/Globe Staff
The renovated Bolling Municipal Building in Dudley Square has some small-business tenants lined up but a large restaurant space sits idle.

Are private businesses ready to bet on Dudley Square’s much-discussed renaissance-in-progress? That’s a question the City of Boston had hoped to settle by now.

Despite spending $123.9 million to renovate and expand the former Ferdinand Building as a new headquarters for the public school system, the city still has not found a tenant to lease the 7,800-square-foot restaurant space on the ground floor.

The space occupies the most prominent corner of the property, now named the Bruce C. Bolling Municipal Building , which stands at the heart of Dudley. It is currently a “raw” unit, essentially a massive empty room with exposed steel beams and concrete floors that lacks interior walls and ceilings.

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City Hall is also trying to avert a second setback for the Dudley neighborhood, the possible withdrawal of two key investors in a proposed $42 million hotel complex because of political and community opposition.

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City Hall issued a request for proposals by restaurant operators in December 2013, seeking a “destination restaurant” that would open by February 2015. It received no offers.

To fill the space, city officials are now trying to “build buzz” about the property before issuing a second solicitation for restaurants this summer. John Barros, Boston’s chief of economic development, said that conversations with restaurateurs during the first, unsuccessful round persuaded the city to offer more incentives to potential tenants.

“The central question they asked was, ‘How much is the city going to be able to put toward the build-out?’ ” Barros said. It became clear the city needed to “build walls, provide a connection to the Internet, really give them the bones of the place.”

Barros declined to provide details of what the city would offer. But he believes a tenant will be found soon, now that construction on the Bolling project is complete.

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“If you’re putting financing together for a restaurant, you want to know this thing is real. There have been starts and stops on these buildings,” he said. “We’re having more substantive conversations now that you can actually walk around inside.”

The city has set high expectations, saying repeatedly that it expects the Bolling Building — with 500 school employees, six retailers, and a start-up incubator — to be a catalyst for private investment in Dudley Square.

So far, things are off to a slow start.

Five smaller retail spaces on the ground floor of the building, all currently empty, were also supposed to open in February. Three businesses have signed leases: a cafe and convenience store by local restaurateur Solomon Chowdhury called Dudley Cafe, a branch of the Brockton-based fashion boutique Final Touch With Class, and an optical shop, Gallery Eye Care.

Tasty Burger and Dudley Dough Pizza Cafe, a project by the nearby nonprofit Haley House, are close to signing leases on the remaining two smaller units.

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It is not yet clear when the companies will begin building out their shops.

One reason for the delay, officials said, is that those small local businesses were inexperienced at navigating the application process.

But one of Boston’s busiest restaurant real estate brokers wonders if the city was equally inexperienced.

“They really should have offered more incentives, like landlords do in the private space,” said Todd Smith, the owner of Corbett Restaurant Group. “That’s a big project. It’s a tough sell.”

Smith said big public investments in Dudley have not gone unnoticed by private investors. But he estimated that building out the large restaurant space would cost more than $2 million, limiting the pool of potential operators.

One way to attract more interest would be to divide the space into two smaller units, Smith said.

Another would be to retain a private brokerage that knows local restaurateurs to manage the tenant-finding process.

Officials could also offer a lease that’s less expensive upfront but that gives the city a cut of the profits after the restaurant reaches a certain sales benchmark.

“You don’t like to spend that much on a build-out in an unproven area” like Dudley Square, Smith said.

“A good operator could really reap the reward of being one of the first to invest in a neighborhood, but the city needs to share in the risk.”

Dan Adams can be reached
at dadams@globe.com.