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Developer Millennium Partners will take control of the long-idle Filene’s property in Downtown Crossing and build a tower on the site with retail stores, office space and hundreds of residences, city officials said tonight.

The firm will become an investor in the project and team up in the redevelopment with its existing owner, Vornado Realty Trust of New York. Vornado has drawn the ire of Boston Mayor Thomas Menino after it stopped construction on the site more than three years ago, leaving a giant crater in the heart of the city’s central shopping district.

The breakthrough deal, whose terms were not disclosed, would end one of the biggest real estate debacles in city history, and trigger a substantial makeover of that section of downtown Boston.


In Boston Millennium has developed the Ritz Carlton Hotel and Towers nearby, and is currently building Hayward Place residences across from the Ritz. Executives with Millennium Partners could not be immediately reached for comment tonight. Vornado officials also could not be reached for comment.

City officials emphasized that Millennium will lead the project, with Vornado taking take a more passive role. They expect Millennium to file a revised development plan for the former Filene’s site within 60 days, and that they hope to see construction resume on the property within a year.

The work stoppage on the Filene’s site has left a major hole in Downtown Crossing, a commercial district that Menino has been trying to spruce up. Vornado stopped worked in the summer of 2008, when its development team could not get a loan to finish the construction.

That triggered an angry standoff between Menino and Vornado’s chairman, Steven Roth, who at one point in a public talk suggested that developers allow urban properties to become blighted to extract more funding from local governments. An angry Menino responded by triggering the process to revoke Vornado’s permits for the project.


Last night, however, officials in his administration celebrated the new deal, which they said will finally break the logjam over the redevelopment and dramatically speed efforts to revitalize the Downtown Crossing.

“The downtown is going to be transformed as this and other buildings open in the area,” said one city official, who requested anonymity because he was not authorized to speak about the project publicly.

The new building by Millennium will be designed by Architect Gary Handel, who also drafted plans for the Hayward Place project currently under construction in Downtown Crossing.