Amid slowdown, developers set to sell part of dormant Dorchester megaproject

On a cold February day seven years ago, top officials from the University of Massachusetts system gathered at the UMass Club at the top of One Beacon Street to announce a deal that would pump hundreds of millions of dollars into the old UMass Boston campus and promised to create a new small city along Dorchester Bay. It was “like the first day of the rest of our lives,” said the interim chancellor of UMass Boston He said at the time.

Accordia Partners, led by veteran developers Richard Galvin and Kirk Sykes, has agreed to a $235 million, 99-year ground lease for the 20-acre former Bayside Expo Center at Columbia Point in Dorchester. Soon after, developers and investors will add Two adjacent pieces — the headquarters of the Boston Federation of Teachers, and a low-rise banking office across the street — and the presentation of a truly massive project: 21 buildings, with nearly 2,000 apartments and millions of square feet of lab space. An investment of $5 billion in total.

Even by the fall of 2023, when city officials gave their approval, there was a lab boom in the area I was starting to get in the mood. Since then, there has been an abundance of vacant laboratory space Inflationwhile the cost of housing construction has risen beyond the rents that new buildings can command. Amid a widespread development slowdown, construction has yet to begin on Dorchester Bay City. Now, its developers are dramatically scaling back their plans, putting much of the site back up for sale.

Accordia recently hired brokerage Newmark to sell about a third of the properties in Dorchester Bay City, a 13.6-acre parcel at 2 Morrissey Boulevard, according to a marketing brochure obtained by the Globe. Newmark promotes 2 Morrissey as a “transformative mixed-use development opportunity” and notes that the city has approved it. 2.4 million square feet across eight buildings As part of Dorchester Bay City’s comprehensive master plan. Ares Management Corp., Accordia’s financing partner, spent $110 million to buy 2 Morrissey in 2019 and later took out an $85 million mortgage on the property, according to Suffolk County records.

Accordia says it remains fully committed to Dorchester Bay City on its Bayside waterfront site, where The city approved 13 buildings and 3.7 million square feet of residential, laboratory, office and retail space. They still plan to make extensive infrastructure and infrastructure improvements Much-needed climate defenses on the site, including raising it several feet to help prevent storm surge from reaching nearby low-lying neighborhoods. Accordia has also allocated $25 million to improve transportation, particularly for nearby Kosciusko Circle.

2 Morrissey Blvd. The site was not part of Accordia’s initial vision for Dorchester Bay City, and developers incorporated the property into the project at the city’s request, Galvin said in a statement Tuesday. Furthermore, he said there is no guarantee that Accordia will actually sell the site.

“Our investor group believes this is the right time to determine whether 2 Morrissey – as an operating asset and permitted development site – is of interest to the broader market,” Galvin said. “We remain excited about the vision for Dorchester Bay City and are confident that the basic design of the project as permitted allows for the flexibility to move forward even in a complex commercial real estate market.”

The sale will not directly impact Accordia’s deal with the UMass Building Authority, which is slated to generate between $192 million and $235 million, depending on exactly what is allowed on the site. The 2 Morrissey site falls outside that agreement, and its sale does not affect the lease, said Christopher Dunn, executive director of the UMBA. Although the ground lease has not yet been finalized, Accordia has paid $32 million in fees and deposits since 2019, Dunn said.

“The lease agreement currently remains open and UMBA looks forward to continuing to work with the developer to execute a 99-year lease,” he said in an email.

However, it does mean that if the 2 Morrissey project goes ahead, it could be under different hands. Accordia’s initial plans there called for offices, housing and research laboratories, including a 306-foot residential tower where a low-rise bank office building now stands, partially leased by Bank of America through 2030.

It was not immediately clear how much Ares and Accordia could expect from the sale of the two Morrissey cars, nor any timetable for a potential deal. Although Greater Boston is routinely among the most expensive markets in the country for new construction, it is a particularly difficult environment in which to build right now, industry experts say. Demand for new life sciences lab space is weak, and the specter of rent control looms large He has some investors shy away Of new housing here too.

While Accordia says it remains committed, it’s not entirely clear what the sale of 2 Morrissey might mean for the broader Dorchester Bay City project. A Boston Planning Department spokesman said the city-approved master plan allows for 6.1 million square feet on 36 acres, and that master plan still applies to the entire site, regardless of owner. If a new or existing owner wants to change the approved master plan, they will have to present the amendments to the city and hold a public meeting.

Only two of the eight buildings at 2 Morrissey Blvd. The area has been approved for residential use, but Newmark’s brochure indicates the new owner could pursue a different mix of uses for the site.

“The final site layout provides flexibility to further focus on residential uses, allowing for greater multifamily allocation upon completion of the project,” the brochure states. “These will be surrounded by a completely new network of streets, sidewalks, bike lanes, open space and other public space improvements to create a vibrant living play environment and integrate the project with the rest of the City of Dorchester Bay.”