July 19, 2010: Dowtown Crossing's developer seeks a new project

>> Rooney: FOR THE FIRST TIME

IN TWO YEARS THERE'S A

DEVELOPMENT AT THE FILENE'S

SITE IN DOWNTOWN CROSSING.

BUT IT'S NOT ON THE PROMISED

39-STORY OFFICE RESIDENTIAL

AND RETAIL TOWER.

VORNADO RETEE TRUST PROMISED.

TWO YEARS LATER, ALL THE

DEVELOPER HAS TO SHOW FOR IT

IS A GIANT CRATER.

NOW THE NEW YORK FIRM IS

TRYING TO SELL ITS 50% STAKE

TO ANOTHER DEVELOPER AND SHIFT

ITS FOCUS TO SUFFOLK DOWNS.

VER MADE OWE OWNS 20% OF THE

PROPOSED SITE WHICH IS SEEN AS

A FRONTRUNNER FOR A GAMBLING

LICENSE IF A CASINO BILL IS

PASSED.

BUT THE SUDDEN SWITCH HAS LEFT

SOME TO QUESTION HOW VORNADO

HAS MONEY FOR ONE PROJECT BUT

NOT ENOUGH TO FIX THE GAPING

HOLE IN DOWNTOWN CROSSING.

HERE TO SORT OUT THE DETAILS

IS GREATER BOSTON'S BUSINESS

CONTRIBUTOR KRIS FRIESWICK.

WELL, THERE IS A CERTAIN

OUTRAGE FACTOR TO THIS.

I CAN SEE WHY THE MAYOR HAS

SMOKE COMING OUT OF EAR.

>> THREE YEARS AGO HE HAD NO

SMOKE COMING OUT OF EARS.

I WASN'T UNTIL THE PRESS

CORNERED HIM ABOUT THE FACT

THAT VORNADO IS STILL INVOLVED

IN THE SUFFOLK DEVELOPMENT

THAT HIS HAND WAS FORED TO SAY

SOMETHING AGAINST THEIR

INVOLVEMENT IN THAT PROJECT.

A VERY GOOD FRIEND OF HIS IS

ONE OF THE MAJORITY OWNERS OF

SUFFOLK DOWN.

>> Rooney: WHO?

>> I CAN'T RECALL HIS NAME OFF

THE TOP OF MY HEAD.

I WANT TO SAY IT'S O'DONNELL.

>> Rooney: JOE O'DONNELL.

>> I BELIEVE SO.

BASICALLY HE HAS BEEN AS

RECENTLY AS THREE DAYS AGO

CAME OUT AND SAID I HAVE NO

PROBLEM WITH VORNADO BEING

INVOLVED IN SUFFOLK DOWNS.

I THINK THAT THE BREWING

RAGE... IT WAS NOT THE RIGHT

ANSWER.

I THINK HE PROBABLY WANTED TO

BE SUPPORTIVE OF HIS FRIEND'S

PROJECT, HAVE HIS CAKE AND EAT

IT TOO A LITTLE BIT.

RAIL AGAINST VORNADO WITH

REGARDS TO THE FILENE'S

PROJECT BUT NOT SAY TOO MUCH

ABOUT THE INVOLVEMENT IN

SUFFOLK DOWNS BECAUSE HE

DIDN'T WANT TO DO ANYTHING TO

HARM HIS FRIEND'S DEAL.

THIS IS ALL SPECULATION.

WHEN THE PRESS KIND OF FORCED

HIS HAND HE HAD TO COME OUT

AND SAY, LOOK, I'M GOING TO

MAKE THINGS VERY DIFFICULT FOR

YOU WITH SUFFOLK DOWNS UNLESS

YOU PLAY BALL WITH ME ON THIS

FILENE'S PROJECT.

>> Rooney: I MEAN, THEY'VE GOT

A DEADLINE HERE TO MEET TOO

BECAUSE THEY'RE GOING TO

RESTART THE PERMITTING

PROCESS.

SOMETIME IN AUGUST.

IF THEY DON'T GET GOING ON

THIS DEAL.

VER MADE OWE OR WHOEVER STEPS

IN, THEY HAVE TO STOP FROM

SCRATCH.

THERE'S AN INSET TIFF FOR HIM

TO DO SOMETHING.

>> WELL, THE WAY THIS WORK S

IS THAT THREE YEARS FROM THE

DATE THEY GOT THEIR

CERTIFICATE TO PROCEED

BASICALLY JUST GOT A FANCY

LONG ZONING NAME, BUT THEY

HAVE NOOD SOMETHING.

THEY HAVE TO APPLY FOR A

BUILDING PERMIT WITHIN THREE

YEARS OF THAT CERTIFICATE

BEING GRANTED.

AUGUST IS THE THREE-YEAR MARK.

THAT DOESN'T AUTOMATICALLY

MEAN THEY CAN'T GET A BUILDING

PERMIT.

BUT THE WHOLE PROJECT WILL BE

RE-EVALUATED BY THE B.R.A., IN

AUGUST, IF THEY HAVEN'T PULLED

A PERMIT BY THAT TIME.

THERE'S THE POINT WHERE THEY

CAN REALLY HOLD THE

DEVELOPER'S FEED TO THE FIRE.

VORNADO OWNS 50% OF THIS

PROJECT.

IT WILL BE VIRTUALLY

IMPOSSIBLE FOR VORNADO TO FIND

SOMEBODY OR A GROUP OF

SOMEBODYS WITH THAT KIND OF

MONEY TO TAKE OVER THEIR STAKE

IN THIS PROJECT.

SO THE TOWN... THERE'S REALLY

A STAND-OFF HERE.

VORNADO CLEARLY DOESN'T WANT

ANYTHING TO DO WITH THIS

PROJECT ANYMORE, BUT WE AS A

COMMUNITY AS A TOWN WE DON'T

REALLY HAVE THAT MANY OPTIONS.

>> Rooney: SO THERE ARE $14

BILLION COMPANY VORNADO.

I MEAN THEY HAVE THEIR HANDS

IN A LOT OF PIES.

THIS IS A $700 MILLION

PROJECT.

LET'S SAY IT GOES OVER BY

DOUBLE, I MEAN, EVENTUALLY THE

THING IS GOING TO MAKE MONEY.

WHY ARE THEY STALLING THIS?

>> EACH PROJECT IS FINANCED

WITH CONSTRUCTION LOANS THAT

ARE BASED ON THE VIABILITY OF

THAT PROJECT.

NO DEVELOPER FINANCES

CONSTRUCTION OUT OF ITS OWN

PIGGY BANK.

THEY ARRANGE FOR CONSTRUCTION

LOANS TO FUND FILENE'S, TO

FUND WHATEVER THEY'RE GOING TO

BE DOING AT SUFFOLK DOWN.

SO IF THE BANKS AREN'T WILLING

TO LOAN THEM THE MONEY TO

PROCEED ON THE PROJECT THEIR

HANDS ARE TIED AS WELL.

I SUPPOSE THEY COULD FLOAT

CASH OUT OF THEIR OWN PIGGY

BANK TO GET THIS PROJECT GOING

BUT NO CONSTRUCTION DEVELOPER

IS GOING... NO DEVELOPER IS

GOING TO DO THAT.

>> Rooney: THIS THREAT THAT

MAYOR MENINO HAS TO TAKE THIS

PROPERTY, THE OLD FILENE'S

SITE, BY EMINENT DOMAIN.

IS THAT AN EMPTY THREAT?

>> IT IS AND IT ISN'T.

CITIES AND TOWNS DO HAVE THE

RIGHT TO TAKE A PROPERTY BY

EMINENT DOMAIN IF LEGAL...

MANY LARGE LEGAL HURDLES ARE

LEAPT.

HOWEVER, EMINENT DOMAIN DOES

NOT MEAN YOU JUST TAKE THE

PROJECT.

EMINENT DOMAIN MEANS YOU PAY

THE OWNER OF THE LAND OR THE

PROJECT A FAIR MARKET VALUE TO

TAKE IT FOR THE CITY OR THE

TOWN.

SO THAT MEANS THAT THE CITY OF

BOSTON WOULD HAVE TO COME UP

WITH A VERY LARGE SUM OF MONEY

WHICH, AS WE ALL KNOW, IT IS

NOT IN ANY POSITION TO DO AT

THIS TIME.

THEN THERE IS DOUBTLESS WOULD

BE ENDLESS LEGAL CHALLENGES

WHICH WOULD RACK UP THE PRICE

TAG EVEN HIGHER.

IT'S A THREAT BUT I CAN'T SEE

IT ACTUALLY HAPPENING IN

TODAY'S WORLD.

>> Rooney: ONE OF THE

INTERESTING THINGS TO ME IS

THE LOCATION.

DOWNTOWN CROSSING.

IF THIS WERE ANOTHER

NEIGHBORHOOD, I DON'T WANT TO

SAY ANY NEIGHBORHOOD BECAUSE

THERE'S A LOT OF OTHER

NEIGHBORHOODS THAT AREN'T IN

DOWNTOWN WHERE NOBODY WOULD

BAT AN EYELASH AND SAY TOO

BAD.

IT'S JUST ANOTHER CRUMBLING

SITE.

BUT DOWNTOWN CROSSING WAS A

PREMIERE AREA.

IT'S SORT OF IN BETWEEN RIGHT

NOW.

IF THIS WERE THE BACK BAY OR

BEACON HILL, I MEAN THIS WOULD

NOT BE GOING ON.

>> THAT'S TRUE AND IT'S NOT.

THE COLUMBUS CENTER PROJECT

THE DEVELOPER OF THE COLUMBUS

CENTER PROJECT....

>> Rooney: THAT WAS

DORCHESTER.

>> COLUMBUS CENTER IS SORT OF

THE AREA OVER THE MASS PIKE

BETWEEN BACK BAY AND SOUTH

END.

>> Rooney: THEY DIDN'T LEAVE A

SCAR.

>> WELL THEY DID.

THEY RIPPED UP A WHOLE BUNCH

OF STUFF.

>> Rooney: THE ONE BY BAY

VILLAGE THERE.

>> THERE'S STILL A LOT OF

CONSTRUCTION DEBRIS OVER

THERE.

I MEAN, I LIVE IN THAT AREA.

I'VE BEEN BREATHING THE DUST

FROM THAT CONSTRUCTION FOR THE

LAST TWO YEARS.

THEY'RE JUST GONE.

THEY JUST KIND OF PADDED IT

DOWN AND WATERED IT AND WENT

AWAY.

IT'S NOT THE GAPING HOLE THAT

FILENE'S IS BUT IT'S A PROJECT

THAT GOT KILLED BECAUSE THE

FINANCING DRIED UP AND THE

DEVELOPER WALKED.

BUT IT'S NOT AS HIGH OF A

TRAFFIC AREA AT ALL.

IT DOESN'T HAVE THE HISTORICAL

AND EMOTIONAL RESONANCE THAT

THAT FILENE'S SITE DOES.

THE HISTORY OF THE DOWNTOWN

CROSSING AREA IS LINKED

INEXTRICABLY TO FILENE'S.

THE HISTORY OF BOSTON IS

LINKED IN MANY MANY WAYS

INEXTRICABLY TO FILENE'S.

I MEAN THERE'S A MONUMENT TO

MR. FILENE ON BOSTON COMMON.

HE WAS AN INFLUENTIAL PART OF

BOSTON HISTORY.

THIS ISN'T JUST A DEVELOPMENT.

IN MANY WAYS IT'S FEELING VERY

MUCH LIKE A SLAP IN THE FACE.

>> Rooney: IS THIS A LEGAL

THREAT FOR THE CITY TO SAY,

LOOK, WE'RE NOT GOING TO LET

YOU GET IN ON THE SUFFOLK

DOWNS DEAL.

CAN THEY DO THAT?

>> LEGALLY PROBABLY NOT.

BUT NEVER EVER UNDERESTIMATE

THE POWER OF MAYOR MENINO TO

INFLUENCE THE OUTCOME OF

DEVELOPMENT ISSUES.

ANYONE WHO HAS COVERED REAL

ESTATE ISSUED AS I HAVE,

ANYONE WHO HAS EVER TRIED TO

GET ANYTHING BUILT IF BOSTON

KNOWS FULL WELL THAT IF THE

MAYOR DOESN'T WANT SOMETHING

TO HAPPEN, IT DOES NOT HAPPEN.

IF I WERE VORNADO-- AND I

CANNOT BELIEVE HOW TONE DEAF

THEY ARE BEING ABOUT THIS

WHOLE THING....

>> Rooney: LIKE THE ENDLESS

FEUD.

>> EXACTLY.

I MEAN, MENINO'S BLACKLIST IS

A LIST YOU DO NOT WANT TO BE

ON ESPECIALLY IF YOU HAVE

OTHER PROJECTS PENDING IN THE

CITY OF BOSTON.

I WOULD NOT BET AGAINST THE

MAYOR IN THIS DOG FIGHT AT

ALL.

>> Rooney: WHAT'S YOUR BEST

GUESS ON THE SUFFOLK DOWNS

THING WHICH IS ACTUALLY, I

HATE TO SAY IT, I THINK IT'S

AN ATTRACTIVE PROPOSAL.

>> IT'S EXTREMELY ATTRACTIVE.

IT HAS SOMETHING THAT FILENE'S

DOESN'T WHICH IS A REVENUE

STREAM FOR THE CITY.

A REVENUE STREAM FOR THE

STATE.

I MEAN THE GAMBLING ISSUE HAS

BEEN HUGE ON BEACON HILL FOR

THE LAST COUPLE OF MONTHS.

IT'S DOMINATED THEIR AGENDA.

>> Rooney: GOING TO HAVE TO

COME TO SOME KIND OF A

RESOLUTION BY TOMORROW TOO.

>> EXACTLY.

THE MAIN THING WE'RE TALKING

ABOUT HERE IS THE STATE AND

THE CITY HAS A MUCH BIGGER

INCENTIVE TO LET THAT PROJECT

GO THROUGH.

SO AGAIN, I MEAN, MAYOR MENINO

CAN MAKE IT VERY DIFFICULT FOR

THESE PEOPLE BUT IN THE FINAL

ANALYSIS, I THINK THAT THE...

IF THE PLACE IS APPROVED IT

WILL GO THROUGH WITH THE

OWNERSHIP GROUP THAT IT HAS.

>> Rooney: KRIS FRIESWICK,

ALWAYS A PLEASURE TO HAVE YOU.

>> THANK YOU.

>> Rooney: WHEN WE CONTINUE,

WHY GAY MEN ARE UNABLE TO

DONATE BLOOD.