Business

Scientologists in a bind over sale of South End building

The Hotel Alexandra has long needed repair.
Wendy Maeda/Globe Staff/File
The Hotel Alexandra has long needed repair.

The Boston branch of the Church of Scientology is sitting on a potential gem near the South End-Roxbury line, a historic building that has sparked interest from dozens of potential buyers who want to turn it into the next boutique hotel or luxury condominium complex.

But the Scientologists say they’re in a bind: They want to sell but can’t find an affordable place in Boston to relocate their local headquarters.

The religious group, founded in the 1950s by L. Ron Hubbard, said in December that it would put the dilapidated Hotel Alexandra on the market. But it says it must wait until a new permanent headquarters is found in Boston with at least 50,000 square feet of space — a mandate handed down from the International Church of Scientology.

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With prices high and inventory low, that is proving difficult.

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And so, after decades of false starts, progress has stalled once again on restoring the boarded-up, fire-scorched eyesore, which dominates one of the city’s most prominent crossroads, frustrating neighbors and city officials.

“In this robust real estate market, it’s unfortunate that the building continues to languish, given its prominence at the gateway between the South End and Lower Roxbury,” said Nick Martin, a spokesman for the Boston Redevelopment Authority. “We remain eager to see the Hotel Alexandra redeveloped so that it enhances the fabric of the neighborhood.”

Even before the church bought the building at the corner of Massachusetts Avenue and Washington Street in 2008 to be its new headquarters, the Alexandra was beset by deadbeat landlords, suspicious fires, start-and-stop development proposals, and, in 2002, the threat of court-ordered receivership by then-Mayor Thomas M. Menino.

The Scientologists promised to restore the hotel, a late-Gothic beauty that contained luxury residences and state-of-the-art amenities when it was built in 1875, “to its original grace and elegance.”

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The renovation was to be funded by the sale of the church’s former headquarters on Beacon Street. But the economy was tanking when that property went on the market in 2008, forcing the church to hold out until 2013, when it sold the building for $10.5 million.

Throughout, the Scientologists insisted they were committed to the Alexandra, but ultimately could not raise enough money to begin an overhaul they said might cost $17 million.

Even though estimates of the tax-exempt International Church of Scientology’s wealth exceed $1 billion, regional chapters must be financially self-sufficient — yet they are forbidden from borrowing money. That means it is up the Boston Scientologists to raise funds for their new headquarters from members or the sale of assets such as the Alexandra.

A narrow, overgrown, and littered lot separates the former Hotel Alexandra from its neighbor on Washington Street. The onetime upscale South End residence requires an extensive, costly makeover.
Wendy Maeda/Globe Staff/File
A narrow, overgrown, and littered lot separates the former Hotel Alexandra from its neighbor on Washington Street. The onetime upscale South End residence requires an extensive, costly makeover.

The group is now leasing temporary office space in Quincy Center, which Hall says draws about 200 Scientologists each week. An earlier deal to rent space in the Newmarket industrial area of Boston ended with the landlord suing the church.

“The Alexandra will be sold, we’re just not quite sure exactly how soon,” said church spokesman Kevin Hall. “We’re trying to do what’s best to get ourselves a new building, and also do the right thing for the neighborhood.”

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The church’s real estate attorney, Marc LaCasse, said the Scientologists have received nearly 100 inquiries or offers from developers — local, national and international. But the potential sale is complicated by the church’s desire to strike a deal with a developer who currently owns a space suitable for its new headquarters and is willing to swap it for the Alexandra. That requirement has the neighbors fed up.

‘In this robust real estate market, it’s unfortunate that the building continues to languish.’

Nick Martin, BRA spokesman 

“As long as they’re holding up the sale, they’re holding up the improvement of the neighborhood,” said Stephen Yung, who owns the nearby Seiyo Sushi and Wine Shop. “Sell it and get it over with. Anything’s better than what it is now.”

One developer who is interested in the property said he estimates it might sell for $5.5 million to $6 million, a price that he said would balance competing factors: a hot market and the Alexandra’s desirable location, on the one hand, and the building’s poor condition and city restrictions on changing the historic structure’s facade too much, on the other.

Construction costs to renovate the Alexandra — perhaps as a boutique hotel, condominiums, or a mixed-use project with retail shops on the ground floor — would probably surpass $15 million, the developer said, plus another $1 million or so to pay attorneys, architects, designers, and city fees.

Dan Adams can be reached at dadams@globe.com. Follow him on Twitter @DanielAdams86.