Fourteen years after he began planning a major development in the air over the Massachusetts Turnpike at Kenmore Square, developer John Rosenthal says he’s finally ready to start work.
Construction would commence with the part of the project that would sit on firm ground.
On Wednesday, Rosenthal and his development partners said that they have raised $230 million in financing and expect to soon begin construction of two apartment buildings on parking lots near Fenway Park. That would be the first phase of the long-delayed Fenway Center, a nearly $600 million complex that’s to include three other structures over the turnpike between Beacon Street and Brookline Avenue, including a 27-story tower.
The project has long promised to accelerate the transformation of Kenmore Square. But for more than a decade it has struggled, largely because of the cost of constructing a massive deck over one of the busiest highways in Boston, as well as over a commuter rail line.
So Rosenthal and the Portland, Ore.-based development firm Gerding Edlen are breaking it in two. First, the apartment buildings — 313 units in all — on the corner of Beacon and Maitland streets. Rosenthal was adamant that he will still build the more difficult part over the turnpike. But splitting such a large endeavor into two is a way to make that happen, he said.
“We thought this makes a lot of sense,” he said. “It’s extremely challenging to finance the whole project with a deck over the Pike. It always has been.”
The plan hinges on state officials letting Rosenthal change course. The developer’s current longstanding deal with the Massachusetts Department of Transportation calls for a first phase that includes building over the turnpike. He’s been talking with the department about amending the agreement, which expires at the end of this month, to include the revised building plan. State officials have been receptive, he said.
A department spokeswoman declined to comment, citing the ongoing talks.
To help make their case, Rosenthal and Gerding Edlen are offering to speed up payments on their 99-year lease, giving the state $20 million upfront. They also noted they have already spent $15 million to build a new Yawkey commuter rail station at the site.
Rosenthal’s long slog to build Fenway Center highlights how hard it is to build over the turnpike, which has seen several high-profile “air rights” deals stall out in the 40 years since Copley Place was built.
“On the surface it seems very appealing,” said Matt Kiefer, a development attorney with Goulston & Storrs. “But when you get further in you realize that building a structure above the highway is really expensive. You could get the land for free and you’d still have trouble making the deal work.”
Rosenthal’s decade-plus of work on Fenway Center has taken him through lawsuits, a huge recession, and various investors and partners. Nearly two years ago, he teamed up with Gerding Edlen, which has built several housing developments in Boston in recent years, and launched a new push to find investors and get started. They recently signed deals with two large institutional investors, whom Rosenthal declined to name, and said they could start construction by year’s end.
The hope, Rosenthal said, is that momentum — and perhaps profits — from phase one will help attract more deep pockets to pay for the more expensive phase over the turnpike. He’s hopeful the deck will be under construction by the time the apartment buildings are done, in two years.
For now, even 313 new apartments would be a big addition to a neighborhood that’s changing fast. Just a few blocks away, Samuels & Associates has built a line of high-rise apartment buildings along Boylston Street. On the other side of Fenway Park, Trans National Properties recently proposed a 340-foot condo and apartment tower. And in the heart of Kenmore Square, Boston University is shopping two blocks worth of buildings that could soon anchor a major new development.
But building over a highway is a much bigger challenge. So if Rosenthal’s two-step approach succeeds it could provide a playbook for more building along the turnpike, real estate attorney Bob Ruzzo said.
“We need to see action on one of these air-rights deals. There needs to be proof of case,” said Ruzzo, who worked on air-rights projects for the Turnpike Authority in the 1990s and is now at Holland & Knight. “If we don’t do something soon, people are not going to believe it’s feasible. I believe it is.”
Logan can be reached at tim. email@example.com. Follow him on Twitter at @bytimlogan.