UMass Boston just cashed in its golden ticket.
The University of Massachusetts and its financially strapped Boston campus on Thursday announced a $235 million deal to turn over the 20-acre site of the old Bayside Expo Center to a private developer, a transaction that could reshape both UMass Boston and the Columbia Point section of Dorchester.
The long-term lease with Accordia Partners — a firm run by a team of veteran Boston developers — could unlock more than 3 million square feet for housing, office space, retail, and parks at the school’s front door over the next decade. It will also pump much-needed cash into UMass Boston, to replace a crumbling underground garage and possibly fund a new home for the well-regarded nursing school, officials said.
“This is a game changer. This is the beginning,” said chancellor Katherine Newman. “This is like the first day of the rest of our lives at UMass Boston.”
UMass bought Bayside out of foreclosure for $18.7 million in 2010 and decided in 2017 to put it on the market after a deal with the Kraft family to build a soccer stadium there fell through. University officials saw a chance to capitalize on the region’s hot real estate market, and offered it up to developers to build a mixed-use campus some have likened to a mini version of Kendall Square.
About 30 developers toured the site, said Rob Griffin, head of capital markets at real estate firm Newmark Knight Frank, which brokered the sale. Six filed bids. From those, Accordia — whose principals developed One Channel Center in Fort Point, Crosstown Center near Boston Medical Center, and a variety of other projects around Boston — emerged as a clear winner, Griffin said.
“It wasn’t close,” he said.
One key reason why: the willingness of Accordia and its financing partner, Los Angeles-based investment firm Ares Management, to pay more money up front. Of the $235 million Accordia offered for the 99-year-lease, $192 million will be paid when the company’s development plans receive initial state and city approvals — a milestone Accordia expects to hit within 18 months. Runner-up Lincoln Property Co. offered $232.5 million, but wanted to spread the payments over a longer time period, according to Newmark’s presentation to the school’s board.
Having that cash in hand is critical for UMass Boston, Newman said. For one, it will finally allow the school to complete the garage project, which involves making major repairs to the massive underground facility that serves as the foundation for several campus buildings.
“The substructure will be a thing of the past as a result of these resources,” Newman said.
The price tag for those repairs has been a moving target. A year ago, interim chancellor Barry Mills estimated it at $92 million. On Thursday, Newman put the price at $155 million. The state has committed $78 million for the project, but says the school must find a way to pay for the rest.
Newman said the Bayside deal means UMass won’t have to borrow money for the project, effectively making it cheaper.
“This is a whole new lease on life,” she said.
Newman and UMass president Martin T. Meehan said repeatedly on Thursday that the rest of the money would also be directed to UMass Boston and its capital needs. A campus planning process will determine how the funds will be allocated, Newman said. She acknowledged that programs such as computer science and nursing, whose home in the old Science Center is scheduled for demolition in 2020, will need a place to move to.
The school could also locate some facilities on the Bayside Expo site. UMass has an option to lease up to 200,000 square feet there.
“Having that option was a big piece of this,” said Newmark’s Michael Byrne.
The deal, however, did not please everyone.
A handful of UMass Boston faculty and staff picketed Thursday morning outside the Beacon Street building where the university board was meeting. Some of them held signs in the back of the room during the meeting, criticizing what they called a secretive process and expressing concerns that the school was selling land that could be better used for campus needs. They also voiced skepticism that all of the money would go to the Boston campus, despite Meehan’s promises.
Some critics, including several members of faculty and staff unions at UMass Boston, said they favor using the proceeds to pay off debt that has saddled the school for decades, borrowing that stemmed largely from shoddy construction when the campus was built in the 1970s.
“If we can get out from under that debt, that would be great,” said Marlene Kim, president of the Faculty Staff Union.
Others said they worry that the Bayside project — one of several large developments planned for Columbia Point and Morrissey Boulevard — could have an outsize impact on nearby Dorchester neighborhoods, driving up rents and creating more traffic congestion.
Those concerns will likely be hashed out in months of planning meetings to come. Accordia’s Dick Galvin said that once the lease agreement is finalized, probably within 60 days, his firm plans to reach out to neighbors about what sort of project they envision for the site.
He and his partner, Kirk Sykes, said they plan to build a roughly equal mix of housing, office buildings, and retail, along with park space that will help better connect Dorchester neighborhoods to the Columbia Point waterfront. They’ve also pledged to design the project to help adapt to rising seas, and to spend $25 million for off-site transportation improvements. The transportation spending, along with state funding and other financing, could help to remake Morrissey Boulevard, Kosciuszko Circle, and the MBTA’s JFK/UMass Red Line station.
The project could easily take a decade to get built, Galvin acknowledged, but when it’s done, he said, what is now a vast parking lot could be a new neighborhood at the front door of UMass Boston’s campus.
“It’s 20 acres, on the water, next to this fantastic research university, next to a T stop,” Galvin said. “That’s a fantastic real estate development opportunity.”