UMass Boston scores big revenue gain with Bayside lease
Developer may pay as much as $235m for 99-year lease
STATE HOUSE NEWS SERVICE
THE UNIVERSITY OF MASSACHUSETTS on Thursday tapped Boston-based Accordia Partners to develop the former Bayside Expo Center site, agreeing to a deal that university officials said could generate a transformational $235 million in revenue for its Boston campus.
The university bought the 20-acre property adjacent to UMass Boston in 2010 for $18.7 million, and has invested an estimated total of $25 million, UMass officials said.
The agreement with Accordia calls for a 99-year ground lease of up to $235 million, with a minimum price of $192.5 million after initial site plan approvals. Those numbers give the university an opportunity to earn nearly 10 times its investment, which Rob Griffin of Newmark Knight Frank, the real estate advisory firm that marketed the site, said was “a dream for most people in the real estate business.”
“We’ve been engaged in talking to the commonwealth about infrastructure challenges in that area, so we’re confident that this major development will result in significant public investment in infrastructure as well,” UMass President Marty Meehan said.UMass described what Accordia plans to build as a “mixed-use urban innovation campus,” spanning up to 3.4 million square feet, on one of “the last remaining developable waterfront parcels in the city.”
Accordia’s Dick Galvin said the property will hopefully include “some academic uses, life sciences uses, job-generating tenants that can collaborate with the school and the students, a lot of potential for residential, great residential and retail and, clearly, open space.”
UMass Boston since 2010 has used the Bayside site for parking and has serviced debt associated with it. Board of Trustees Chairman Robert Manning said the deal would allow UMass Boston to “convert an interest expense to a revenue stream.”
UMass Boston Chancellor Katherine Newman said the decision by Meehan and the board to provide UMass Boston with the revenue from the deal was a “discretionary” one that amounted to a “vote of confidence” in the campus.
She said it would give the school a way to to “build out” academically, provide new internship opportunities for students, and “chart its own future” in ways that would otherwise be difficult, including seeking permanent homes for the “long list” of programs that currently lack them.
“This is a game changer. This is the beginning,” she said. “This is like the first day of the rest of our lives at UMass Boston.”
On Wednesday, a group of UMass Boston faculty circulated an open letter criticizing the deal, saying its terms weren’t shared with the school community and that more needed to be done to address legacy debt at the Boston campus.
The letter, signed by professors Reyes Coll-Tellechea, Marlene Kim, Lisa Rivera, Zong-Guo Xia and Jeffrey Melnick, said leasing Bayside “might help a little, but only in the short term.”
“UMB needs adequate State support to pay off the ‘legacy debt,’ not more borrowed money to be paid back by raises in student tuition and fees; and if the University of Massachusetts system is not able or willing to address the Boston campus needs and mission appropriately, then the system structure is no longer working properly and it ought to be officially assessed. It would be foolish and unjust to undermine the progress it has made in many decades of service to the City of Boston, the Commonwealth, and the communities it serves,” the professors wrote.Sen. Nick Collins of South Boston, whose district includes UMass Boston, called the deal a “great opportunity” and said he was looking forward to seeing what comes out of it.
“At the end of the day, we want to see a project that enhances the campus, brings the resources to bear to get that campus back on track and can complement its strengths,” he told the News Service. “We think that some of the programs over there like the nursing program is one that needs reinvestment, and I think it’s going to be important that along the way, we’re working with the campus community and the residents in the area.”