fb-pixel

Prime parcel near South Station finally hits the market again

After fits and starts, the state Department of Transportation is reviving efforts to sell off its land along Kneeland Street

For sale: 1.3 acres, a mix of terra firma and air rights, easy highway access, near the busiest train station in one of the hottest cities in the country.

Sound enticing? The Baker administration sure hopes so. We’re talking about one of two prime spots along Kneeland Street, perched over interstates 93 and 90, and a stone’s throw from South Station. Yet, despite the awesome location, the state Department of Transportation has had no luck in the past with unloading these two parcels, totaling more than 5 acres.

They just might be the best of the last major undeveloped properties in downtown Boston, in terms of their location. But there are some good reasons why they have stayed that way.

Advertisement



MassDOT is trying again to break the Kneeland Street Curse — this time by selling them one at a time, starting with the smaller piece, known as Parcel 25. On Wednesday, the agency put out a request for information to get advice from the development community that could shape the upcoming bidding process. Although the property officially hits the market in the spring, the calls are already starting to come in.

The Baker administration had packaged these two properties in 2016, for a massive development that could be a grand gateway to the city. But not a single bidder stepped up. (An initial bidding floor of $167 million didn’t help matters.) The parcels had also been suggested for potential use by Amazon, back when Boston was still in the running for the Seattle tech giant’s second headquarters. Amazon picked Arlington, Va., instead.

Since then, Scott Bosworth, the state’s undersecretary of transportation, said developers have shown a stronger interest in Parcel 25 than in the bigger one, dubbed Parcel 26.

It’s easy to see why. A steam plant, now owned by a Veolia spinoff called Vicinity Energy, sits on that bigger site; bidders had been asked to accommodate the plant in some way. There’s also a park that Chinatown residents want preserved, if not improved. The site is also home to MassDOT’s District 6 headquarters, a 10-story office building used by about 250 state workers. Bosworth said it has been tough to find an affordable new home for them in or near Boston, in this era of high office rents.

Advertisement



Then there are the strings attached by the feds. The state acquired the ground-lease rights for the property from the late, great Wang Laboratories, to make way for the Big Dig, with the help of federal funds. Those funds came with an obligation: proceeds from any disposition would need to go to the Federal Highway Administration, unless used for another road project, not for a new home for the MassDOT district offices.

The smaller parcel is not without its complications. More than one-third of the developable area consists of air rights: a deck would be needed over I-93. The highway ramps alongside the site pose access issues. There’s also an old city-owned pump station for fire hydrants on one corner. (One piece of good news from a MassDOT spokeswoman: a recent environmental analysis found only a "trace” amount of asbestos in the soil.)

Bosworth noted that the state once had two bidders for this parcel lined up, nearly eight years ago. But that effort was shelved as city officials considered building a school there. The market is considerably stronger today — and this property, as MassDOT puts it, is a “blank canvas of urban development potential.”

Advertisement



So what could go there? Zoning allows for housing and commercial uses, so the end result may be a mix of both. Any buildings could only be as high as 125 feet along Kneeland, but further back could top out at 300 feet.

Bosworth said the door remains open to a bigger development, such as roping in the adjacent Parcel 26 — much of it is now an open-air parking lot. Bill DiCroce, Vicinity’s chief executive, recently confirmed that he’s still hopeful the property can be redeveloped. The aging steam plant only runs in the winter now, he said, while Vicinity’s main plant for the area is on the other side of the Charles River, near Kendall Square.

DiCroce said the company is now open to relocating the Kneeland plant to a nearby property, if necessary. But MassDOT is probably not open to relocating: Bosworth said it’s unlikely those offices would move at this point, given the difficulties finding a strong replacement.

In the meantime, at least this blank canvas might finally start to see some paint.


Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.