The sale of the Hynes Convention Center should be a lucrative deal for Colliers International, the brokerage picked on Thursday to handle the transaction. But it could also become one of the trickiest deals for the company’s Boston office to pull off.
Yes, we’re talking about a 5.8-acre property in the heart of a booming city. But it is by no means a slam dunk — or a blank slate. Getting the Back Bay business community to buy in could be tough: Opinions there seem to range from cautious optimism to outright skepticism about the looming loss of the Hynes and its crowds. The property spans the Mass. Turnpike, limiting what can be built over the highway. And then there’s the entanglement with Beacon Hill: The Hynes sale needs the Legislature’s blessing to move ahead.
For Governor Charlie Baker and Massachusetts Convention Center Authority chief David Gibbons, selling the Hynes represents an opportunity to double down on the agency’s flagship property, the much larger Boston Convention & Exhibition Center in South Boston. Baker and Gibbons want to plow the proceeds from the Hynes into a $500 million version of a long-awaited BCEC expansion. One great facility, Gibbons argues, is better than two that need improvement.
The convention center authority board voted in September to sell the Hynes. The board didn’t waste much time to find a broker — even though the Legislature’s review of the sale is just beginning. Only two brokerages, JLL and Colliers, pitched their services. The MCCA board on Thursday chose the Colliers team, citing the qualifications and diversity of its subcontractors as key reasons. (A spokesman said a pro-sale column in the Globe by Colliers exec Tom Hynes, a nephew of the convention center’s namesake, was not a factor.)
Frank Petz, a former JLL executive who joined Colliers last month, is leading the Hynes effort. He says Colliers will embark immediately on “phase 1”; that is, the work that can be done before the legislative approval. He refers to this part of the process as “underwriting,” or essentially figuring out the redevelopment potential of the property by analyzing its physical capacity, the economics — and the politics.
Petz envisions some kind of big mixed-use development taking shape there . The convention center authority recently hired RKG Associates to study the property; spokesman Nate Little says those findings will be woven into the work that Colliers will do.
The Back Bay Association is working on its own study, and it’s a good bet that these dueling research projects will reach different conclusions. Association president Meg Mainzer-Cohen worries about the hit the Back Bay will experience if the Hynes is replaced or, even worse, the property goes dark as it awaits redevelopment.
It’s not as if the Hynes is a white elephant, with tumbleweeds rolling down the stairs — not yet, at least. Sure, the Hynes has not been as successful as its flashier, bigger Seaport sibling. And, yes, occupancy rates dipped slightly last year. But even with that dip, the exhibit halls were occupied 44 percent of the time in 2018, just a little less than the 47 percent average among similarly sized convention centers. The Hynes ballroom occupancy rate of 49 percent, meanwhile, slightly exceeded the average in its peer group.
The Back Bay Association has been here before. Mitt Romney floated the idea of selling the Hynes 17 years ago. His campaign for governor succeeded, but his proposal to ditch the Hynes did not. Back then, the association led the charge to stop the idea in its tracks. This time around, the proposal is well beyond the idea stage. Rather than fight it right now, the association is instead insisting that any redevelopment includes more than 150,000 square feet of event space (roughly half of what exists at the Hynes today).
Gibbons and his team at the convention center authority are not keen on this. They would prefer to sell the property unencumbered, without restrictions, to fetch the highest possible price.
But Mainzer-Cohen is pressing ahead. Perhaps she can persuade enough powerful people on Beacon Hill to add this provision to the Hynes legislation, or maybe a case can be made to the MCCA. Toward that end, the association hired former Senate president Bob Travaglini and his well-connected lobbying firm, Travaglini, Eisenberg & Kiley, last month.
Sure, there could be a financial impact by imposing this kind of a restriction in a sale. But Petz says he hasn’t ruled including a condition or two, not at this early stage. The political impact needs to be weighed, too. Petz has been around Boston long enough to know that for one deal to happen, you often need to make another one first.