The developer behind the idea for a gondola over the Seaport District has hit a major complication in its plan to redevelop a large section of the marine industrial park and will likely miss a May 31 deadline to begin construction on a smaller section.
Millennium Partners, which has proposed running a gondola from a massive new "innovation" campus it wants to build in the industrial park to South Station, has been unable to reach a deal with a major business partner and is at risk of losing its development rights to another parcel that is part of its sprawling development plan.
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The company has been unable to reach terms with Stavis Seafoods to serve as one of two anchor tenants for a pair of industrial structures on a 6.8-acre slice of vacant waterfront land. Under Millennium's arrangement with the Massachusetts Port Authority, which owns the land where the industrial buildings would go, Millennium had agreed to line up its tenants and begin construction by end of the day Thursday. Millennium has a deal with the other tenant, cargo firm Boston Freight Terminals.
In a brief statement, Millennium indicated it would like permission from Massport to begin work on the Boston Freight Terminals building.
"Having already invested $7 million towards roadwork, design, and permitting in reliance on our [Massport] agreement," Millennium partner Richard Baumert said in the statement, "we remain committed to the development of Marine Terminal Parcel 5 and are prepared to commence construction on our first building as soon as permitted by Massport."
Stavis officials couldn't be reached for comment. Earlier this year Stavis replaced its chief executive after IMV, a Dutch fishing conglomerate, invested in the company.
The problems with the Stavis development could have a ripple effect on Millennium's ambitions to build a separate but related project a few blocks away: a 12-acre "innovation campus" that would host high-tech and other white-collar jobs. As part of its funding for transit service, Millennium has proposed a $100 million gondola system to whisk thousands of commuters above Summer Street on the one-mile trip between South Station and the industrial park.
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The innovation campus plan, as currently configured, involves a Stavis property at the entrance to the park. If Millennium can't obtain that site, it may shrink the overall size of its development plan, which could reduce the money it provides for transit service.
So far, the Walsh administration has been lukewarm to the gondola idea. A source familiar with Millennium's plans says the firm is open to paying for other transportation options instead — such as dedicated bus lanes along Summer Street — if city officials don't go for the gondola. That source emphasized the developer is treating the Massport project and the innovation campus as two separate projects, so problems with one shouldn't undermine the other.
The source also said Millennium would like Massport to consider subdividing the property, to allow the developer to obtain financing and begin construction on the Boston Freight Terminals building—as soon as next month, while it continues negotiating with Stavis.
Massport chief executive Thomas Glynn said the authority is open to such a split but reiterated Wednesday that he is hopeful a deal involving Stavis can be reached.
"Massport still believes the best outcome for the regional economy is for Millennium to complete its agreements with Stavis Seafoods and Boston Freight Terminals," Glynn said.
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Massport has been struggling to get its waterfront property in the park redeveloped for years, in part because of state-imposed restrictions on the type of companies that can operate at the site.
Boston Freight Terminals president Neil Fitzpatrick remains hopeful the situation can be resolved so the company can move into a new building.
"I do think it's an opportunity for Boston Freight Terminals to expand out there," Fitzpatrick said. "I'm hoping Massport feels the same way."
Jon Chesto can be reached at jon.chesto@globe.com.