The Massachusetts Port Authority and Millennium Partners have reached a peace on the waterfront, one that will cost Massport $6.5 million.
Massport chief executive Thomas Glynn said the authority has agreed to reimburse the developer for much of its upfront costs after it lost the right to develop a prime 6.8-acre waterfront site that Massport controls in the Raymond L. Flynn Marine Park.
Massport had given Millennium through the end of May to start work on a long-delayed project there, and then put the Fid Kennedy Avenue parcel out to bid again when Millennium missed the deadline.
Glynn said the port authority’s board approved the settlement on Thursday. Massport agreed to pay $1.5 million to Millennium for roadwork at the site, and to return $5 million that Millennium already paid to the authority.
Millennium’s work in the waterfront industrial park is far from over. The developer, which had floated a gondola project as a way to bring commuters from South Station to the park, remains interested in building a major office complex there.
Meanwhile, the port authority has picked a new developer for the waterfront site: Pilot Development Partners, a Malden firm that has developed other industrial properties nearby. Pilot plans either one or two buildings, with up to 140,000 square feet of space, on the Massport site. The complex would focus on seafood processing but might incorporate trucking uses as well.
A spokeswoman for Millennium declined to comment.