It has been two decades in the planning, but a skyscraper atop South Station is finally set to start construction next month.
Developer Hines closed this week on an $870 million construction loan from a British hedge fund, according to documents filed in Suffolk County. That would finance a three-phase project that would eventually put 2.5 million square feet of office space, condos, and a hotel atop the station’s railbed and bus terminal — a fantastically complex endeavor that could turn Boston’s busiest rail hub into a construction site for years. But when completed it would transform a whole corner of downtown.
In January, work will start on phase one, a 678-foot tower of condos and office space above the platform between South Station’s historic terminal and its rail lines, with a new entrance along Atlantic Avenue.
“We are one step closer to construction, which will be starting in January,” said David Perry, a senior managing director at Hines. “We are working closely with stakeholders to mitigate the impacts during this time of transition.”
A spokesman for the Massachusetts Department of Transportation said the agency and Hines are still finalizing how best to phase in construction. A plan is expected “within weeks,” said spokesman Joe Pesaturo, who noted that work “will begin on the far end of the platforms, having little or no impact on T operations.”
“As the project enters future phases, there will be some changes in pedestrian paths of travel within the station but train schedules will not be impacted,” Pesaturo said in an e-mail. “Changes to paths of travel will be communicated to South Station customers well in advance.”
The tower, which is expected to take four years to build, is designed to minimize disruption, rising from a podium that will be built above the passenger platform, with a series of archways that tie into a foundation built beneath the station when it was renovated in the 1980s.
Indeed, that foundation is a sign of how long this tower has been in the works. First conceived by the development arm of Tufts University in the 1990s, the project has been led by Hines — a large Houston-based developer with a long list of global skyscrapers to its name — for nearly 20 years now and won city approvals in 2006, before stalling in the recession of the late 2000s.
It was revived and reconfigured in 2016, with backing from Chinese investor Gemdale Properties, which earlier this year sold its interest to a pair of new investors — Dutch pension fund manager APG Asset Management and the New York private investment firm Dune Real Estate Partners. They and Hines are now pushing ahead, with local construction giant Suffolk signed on as general contractor and a construction loan from British hedge fund CIFF Investments LLP, according to documents filed Thursday in Suffolk County. They also closed on a deal to purchase the eight-acre site from the Boston Planning & Development Agency for $33.5 million.
Construction on the first phase of the project, a 51-story tower with 768,000 square feet of office space with condos above, will start without tenants being lined up — a somewhat rare move in Boston’s risk-averse development market. But Perry has said the four-year construction timeline made it impractical to sign tenants beforehand, and that he’s confident the location will appeal to many potential tenants.
Later phases include a 349-foot hotel or residential building and a 279-foot office building atop South Station’s bus terminal.