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FILE #.PC 1725.05 07/10/91
LANDSLIDES (617) 536-6261 FAX 536-2418

The Tufts University Development Corporation has been awarded the developer
designation for the South Station Technopolis Project. The proposed development wili
be constructed on air-rights over the existing rail lines and a public bus facility. The
project will include 350,000 square feet of biomedical research space built over the
bus facility, a one million square foot office building to complete Dewey Square,
650,000 square feet of biomedical research and complementary uses adjacent to the
office building, and 1,100 above-grade parking spaces built over the entire air rights
site. The South Station Technopolis, at six acres the largest development site in
downtown Boston, includes one of the last locations available for large-scale office
development in downtown Boston. In addition, the parking supply in this area of the
downtown is expected to become constrained with the demolition of a city-owned
garage, the construction of a new Federal courthouse on open air parking lots nearby,
and the removal of parking lots currently in the path of the new Central Artery and
Third Harbor Tunnel.

This confidential informational memorandum is intended solely for the purpose of
soliciting expressions of interest from qualified financial sources and developers. The
information contained within does not purport to be all inclusive or to contain all the
information necessary which a potential lender or investor might require. The Boston
Redevelopment Authority and Tufts University Development Corporation do not make
any representation or warranty, expressed or implied, as to the accuracy or
completions of the proposed.

Digitized by the Internet Archive

in 2010 with funding from

Boston Public Library

The Boston Economy

The sharp decline of the Massachusetts economy that began in 1988 is ending, and a
gradual recovery is expected to begin in late 1991. Statewide unemployment was 9.1
percent in July 1991, down from the previous month's 9.5 percent level and May's
9.6 percent. As the region's economic center, Boston has experienced a recession as
well, but its performance has been stronger than that of the state. Boston's
unemployment rate has been consistently lower than the statewide figure. The City of
Boston's bond rating is at its highest level in years; after being raised five times during
the 1980s, it has remained at an "A" level despite the regional downturn.

Recent forecasts by prominent area economists project that recovery will begin in late
1991 or early 1992, with the upturn progressing slowly in 1992 and strengthening
thereafter. Analysts attribute the coming turnaround to several factors, including the
recent bipartisan agreement to balance the state budget without raising taxes, the
confirmation of Fleet/Norstar as the buyer of the Bank of New England, the reduction
in business and housing costs in the region, and growing consumer confidence and
home sales.

For an investor in Boston's future, more important than short-term forecasts are recent
studies demonstrating the fundamental strength of the region's economy. Boston and
Massachusetts remain home to many of the world's most renowned research
institutions, technologically-advanced companies, universities, venture capital firms,

and sophisticated finance and sen/ices companies. In-depth analyses by Harvard
Professor Michael Porter and prominent Boston economist James Howell document
that these institutions and industries provide the necessary foundation for an
innovation-oriented economy which should perform well in the 1990s and beyond as
the state emerges from recession. Investors who recognize this strength and can plan
for the long term will find outstanding opportunity in the Boston market.

Boston is unique among American cities in the number and size of permanent
institutions that provide the basis for much of its economic activity. It is the world's
premier center for hospitals, colleges and universities, including Boston University,
Massachusetts General Hospital, the New England Medical Center, Tufts University
Medical School, Brigham and Women's Hospital, among others, in addition to Harvard
and M.I.T. in neighboring Cambridge. It is the nation's largest center for medical
research, carried on at 31 institutions within the city limits. As a major government
center, Boston not only is the capital of Massachusetts but is the regional center for
Federal activity, including a Federal Reserve Bank. Adding to this New England's
premier sports and cultural facilities and the region's major airport, it is no wonder that
Boston is called the "Hub" of New England. All of these institutions are here to stay,
providing a diverse, extremely stable base for the city's economy.

South Station Technopolis

At the center of this "Hub" stands South Station, squarely in the Financial District, and
an exceptional site for a large scale development project combining medical research

facilities, parking, office space, and retail activities. South Station is located within
three blocks of the major medical care and research institutions of New England
Medical Center and Tufts University, and boasts of unsurpassed transportation access
into and out of the city and to the airport.


Sited atop rapid transit and next to the juncture of the major highways leading north,
south and west of Boston, South Station is also the city's major suburban and national
rail terminus. More than 36,000 commuters pass through the station daily. The
station will in several years have fast direct links to New York by high speed rail, to
international and domestic destinations through rapid transit connections to Logan
International Airport, and to suburban and regional destinations through expanded rail
services and a new bus station.

Logan Airport already is the closest international airport to an American downtown.
With the completion of a new Harbor Tunnel linking South Station directly to Logan,
frequent shuttle service within dedicated lanes will put the station only moments away
from the airport. In fact, Tunnel planners have envisioned South Station containing a
ticketing and baggage handling terminal so that passengers can bypass the terminals
at Logan and board planes directly.

With the recent Federal commitment to high speed rail between South Station and
New York, tenants of the Technopolis will be less than 3 hours from downtown

Manhattan on comfortable, modern trains. For everyday commuting, workers will have
direct road, rail and subway links to Boston's most desirable residential neighborhoods
and suburban towns.

Finally, South Station will be the terminus of the transit line linking the new Federal
Courthouse on Fan Pier to downtown Boston, and is under consideration as the
downtown terminus for a new subway line - the proposed bio-science line - linking
the major medical and scientific research institutions in Boston and Cambridge. South
Station will be the premier location for law firms and other tenants who need a location
close to the courthouse yet still in the downtown hub, and for services firms who want
direct access to Boston's growing medical and scientific economy.

Parking Garage

A 1 ,100 space public parking garage at the South Station Technopolis will have direct
off-ramp access from the Massachusetts Turnpike, and will be one block from the
Central Artery, Boston's north-south highway. At the same time, it is located within a
ten-minute walk of every location in Boston's Financial District.

The garage will serve a number of markets, meeting both short term and long term
demand. First, it will help to replace the hundreds of parking spaces in the
surrounding area being lost over the next few years to the Artery/Tunnel Project, to
the demolition of a nearby city-owned garage, and to the construction of a Federal
Courthouse on nearby parking lots. At the same time, during the Artery construction

period commuters currently using parking in the heart of downtown and across the
Fort Point Channel will be searching for easier-to-reach alternatives on the southern
edge of the Financial District, close to the major highways. No site is better located
for this purpose than South Station.

The Artery/Tunnel Project and three other major construction projects over the next
few years will displace over 5,200 parking spaces within a half-mile radius of South
Station. However, the Artery Project will not provide any replacement parking in this
area, which encompasses virtually all of Boston's Financial District, with 26.6 million
square feet of Class A office space. Nearly 3,000 of these spaces will be lost
permanently, while about 2,300 more will be displaced for several years by the
Artery/Tunnel construction.

South Station is the ideal location for replacement parking on the southern side of the
Financial District because commuters using the Massachusetts Turnpike and the
Southeast Expressway can directly access the site without use of local streets and
without entering the traffic-clogged Central Artery. The garage entrance will be
located directly off the first downtown exit and entrance ramps of these highways.

When the new Third Harbor Tunnel connecting the Massachusetts Turnpike to Logan
Airport is completed in 1995, the South Station parking garage also will have the best
airport access of any parking facility in downtown Boston. In addition, in the late
1990s a high-speed rail line linking South Station and New York City in less than three

hours will be completed. Users of this rail line can be expected to part at South

A second market for a parking garage at South Station would be workers in nearby
office buildings with inadequate parking of their own, including both recently-built
towers and many older structures that lack indoor parking entirely. Many of these
workers now park in the lots and garages described above that will be displaced or
rendered inaccessible by construction projects.

The parking garage's third market serves the needs of later phases of the South
Station Technopolis development program, such as the 1,000,000 square feet of
laboratory, research and other complementary space and potential 1 ,000,000 square
feet of office space allowable on the site. The 1 ,100 spaces would accommodate 0.55
parking spaces per 1000 square feet of research space, and 0.8 spaces per 1000 feet
of office space. The office building parking ratio is among the top four of all major
Financial District office projects.

Medical Research

The demand for new medical research space in Boston will be a significant component
of the future development economy of Boston. The city's concentration of research
institutions and scientists places it in a premier position for new growth in this sector.

The City of Boston is the nation's largest recipient of federal medical research grants,
totaling more than $500 million in 1990 alone. Dozens of hospitals and medical
research institutions and medical-related companies make it a world center for
dynamic health-related industry. Out of this intense environment come innovative new
drugs, treatments and equipment- developed in the research labs, tested and refined
in the hospitals, and produced by spin-off companies.

In today's highly competitive world economy, advantages are gained by those
companies located in an environment which spurs innovation and high productivity.
Access to a highly skilled labor force of scientists, doctors, and technicians, to world-
renowned health research and care institutions, and to professional and financial
services attuned to specialized needs - all are essential to success in biomedical
research, biotechnology and other health-related fields.

The Tufts International Research Center at the South Station Technopolis will offer
companies worldwide the opportunity to tap into Boston's advantages. Companies
joining the Technopolis will become part of the research and teaching complex of Tufts
University, a leader in biomedical science which has committed itself to the tenancy of

a minimum of 100,000 square feet. The Tufts University-New England Medical Center
complex, located three blocks from South Station, received about $37 million in
Federal National Institutes of Health (NIH) research grants during fiscal year 1990
alone. The New England Medical Center individually is the nation's sixth-largest
independent research hospital recipient.

By establishing links to the doctors and scientists carrying on pathbreaking research at
the University, companies can cut their product development times dramatically.
Companies also can use the New England Medical Center and other world-renowned
Boston hospitals to test new products. This competitive edge can translate into
commercial success.

Office Space

The South Station Technopolis includes one of the last available sites for large-scale
office development in downtown Boston, and can be the premier office location for
downtown Boston in the latter part of this decade.

Although office vacancy rates are currently high for Boston- 14.9 percent for Class A
space in the first quarter of 1991— this rate is well below the national average of 17.5
percent. New data for the second quarter indicate that rates are falling or stable. The
longer-term outlook indicates that a tighter market is likely to return by the late 1990s,
with very few projects coming on line to meet demand.

South Station also offers a unique locational advantage because of its proximity to
transit, highways and to a new federal courthouse. In addition, the City of Boston
recently rezoned the entire downtown area. Only three sites in the Financial District
are zoned for office buildings of more than 500,000 square feet, with South Station
offering the best transportation access and most central location of the three. The
adjacent historic district has been downzoned to permit buildings of no more than 100
feet in height.

Currently in Boston's Financial District, less than 1 .2 million square feet of Class A
office space is under construction in just two projects. One will come on line in 1991 -
125 High Street Phase II. The second project, International Place II, is expected to be
the only major Class A project to come onto the market between 1992 and 1996, and
will be completed at the end of 1992. Using modest assumptions of gradually
increasing demand rising to Boston's twenty-year average absorption rate, the effect
will be vacancy rates that sharply decline during the 1992-96 period, reaching the 6 to
8 percent range by 1996.

To enter this relatively tight market in 1996 and beyond, only two major downtown
office projects are anticipated to go forward: One Lincoln Street and the South Station
Technopolis office tower. An additional project, the Prudential Center tower, is located
in the Back Bay a mile away, a market dominated by insurance, advertising and other
industries. Financial District industries generally do not locate in the Back Bay, and

vice-versa. This leaves One Lincoln and South Station alone to serve the Financial
District market.

Because of their locations, these two buildings may serve different market segments.
In 1997, a major shift in Boston's center of gravity will occur: the Federal Courthouse
will be moved from Post Office Square in the center of the downtown, to Fan Pier
across the Fort Point Channel to the south. Law firms seeking a location close to the
new courthouse, yet still within the downtown, will look to South Station, from which
the new transit line connecting the courthouse to downtown will run. Law firms which
employed an estimated 11,800 people in downtown Boston in 1990 and other
companies attracted by South Station's excellent transportation access should take
great interest in the Technopolis office tower.

This shift in Boston's center of gravity has already gained momentum over the past
several years as a number of major office projects were completed in the South
Station area. Millions of square feet in such projects as 150 and 160 Federal Street,
99 and 125 Summer Street, One Financial Center and 600 Atlantic Avenue have
pulled the Financial District's employment activity directly to the South Station area.
The primary site in the center of this activity is South Station itself.


Office/Biomedical Research Center

Development Proposal

Executive Summary

1. Project Summary

2. Project Schedule

3. Program Summary

4. Parking Garage Market Analysis

5. South Station Air Rights Development

Parking Garage Cost Summary and Operating Pro Forma

6. South Station Air Rights Development
Laboratory Cost Summary and Operating Pro Forma

7. The Boston Redevelopment Authority

8. Tufts University Development Corporation

9. South Station Air Rights Sale Summary

10. Renderings/Typical Floor Plans/Location Maps/Pictures

11. Public Investments

Project Summary
South Station Project Description

Almost 100 hundred years since the 1899 construction of South Station, the complex
is undergoing a profound transformation. In a sense, its transformation parallels the
direction of the Boston economy as a whole. If one real estate development project is
a metaphor for the future of the Boston economy, that project is South Station. 18

What was South Station?

Since its opening in 1899, South Station has occupied a pivotal location in the
development of Boston's economy. As the country turned from an agrarian to a
manufacturing nation, South Station served as a terminus for the transport of goods
and people from points south into the downtown. As the use of rail diminished in the
post World War II era, South Station's importance declined somewhat, although it
continued to serve suburban commuters, local subway riders, and travelers along
Amtrak's Northeast Corridor. During all of this time, South Station was a railroad
terminal but nothing more.

What is the South Station Redevelopment Project today?

South Station is proposed to be redeveloped into a complex of more than 2 million
square feet of office, medical research, and retail space, in addition to a regional bus
facility and a large public parking garage. Its site occupies about six acres in

downtown Boston. Some of the individual components of the complex are already
completed, others are funded and about to start up, while others are in the early
planning stages and require a developer.

The following is a description of the elements of the South Station redevelopment
project already completed:

o the Historic South Station Headhouse. Built by the distinguished Boston
architectural firm of Shepley, Rutan, and Coolidge, this gracious five-story
curved building was recently restored by the Beacon Development Company.
Its landmark facade faces Dewey Square, the most intensively developed area
of Boston in the 1980s. Its interior is evocative of the grand era of rail travel
with elegant furnishings, restored architectural details, and superb
craftsmanship. The Headhouse contains ticketing for all commuter and Amtrak
trains, many retail stores, and office space.

o the Trains. All train tracks and platforms have been completely reconstructed
by the regional transportation agency, the Massachusetts Bay Transportation
Authority (MBTA). Approximately 36,000 commuters arrive into South Station
daily. The local subway system can also be accessed directly from inside
South Station. Amtrak commuter rail connects to Providence, New York,
Philadelphia, Baltimore and Washington, D.C.

The following is a description of each element of the South Station redevelopment
project to be completed:

o the Bus Terminal. $75 million in public funds is committed to the construction
of a modern terminal for city and commuter buses along with accessory
parking. The bus terminal will be constructed and operated by the MBTA. The
terminal will not extend to the Headhouse, but only to a point along Atlantic
Avenue at column line 20/21 (see attachment, Tab 10). Construction will begin
in mid-1992.

o the Parking Garage. The South Station site has the capacity for a 1 300-car
parking garage. As part of its development program, the MBTA will build a total
of 200 parking spaces on one level above the bus terminal for high occupancy
vehicles. Service and loading for the buildings above will also be provided on
the MBTA's parking level. In addition, a total of 1,100 public parking spaces will
be built, 550 on two levels above the MBTA facility, and 550 on five levels
between the Headhouse and the bus terminal.

o the Bio-Medical Research Space. Two buildings of 175,000 square feet each
are proposed for the development of biomedical research and development
space above the bus terminal. The space will be devoted to scientific research
conducted in the laboratory, proto-type manufacturing, and new product
development. Two additional buildings of a total of 650,000 square feet can be

built adjacent to the office tower. Tufts University has already committed itself
to the tenancy of 100,000 square feet of the first building for its own medical
research purposes.

o the Office Tower. The site is ideally suited for a high-rise development which
could house either a single large office building, or an office building and a hotel
or additional research related space. With a front door on Dewey Square,
spectacular harbor and downtown views, the best transportation infrastructure in
Boston, and virtually no other sites zoned for high-rise office development
downtown, South Station is the site for a premier office development of
1 ,000,000 square feet.

Where is the South Station Redevelopment Project?

South Station anchors one corner of Dewey Square in the heart of Boston's Financial
District. It is flanked on one side by the Federal Reserve Bank tower, which was built
in 1976 and houses the regional Federal Reserve Bank headquarters, and on the
other side by One Financial Center, a 46-story tower built in 1983.

The last few years have further transformed the Dewey Square area. Across the
Square is 125 Summer Street, a $165 million project completed in 1989. Just beyond
are two of Boston's largest new projects: 125 High Street, a 1.3 million square foot
office building and International Place, a complex of five buildings totaling 1.7 million
square feet. Combined, these latter two projects represent $820 million in new private

investment. Further along the harborfront is Boston's newest signature building -
Rowes Wharf - a dramatic hotel, condominium, and office project with a grand
archway leading to panoramic views of the harbor.

South Station also sits along the edge of Fort Point Channel on the Boston Harbor.
Just across Fort Point Channel, plans for a new federal courthouse have just been
announced heralding a shift in the legal services sector to this end of downtown.

South Station has superb access to the local and regional transportation network
which will improve further when major new infrastructure projects are completed. The
parcel will soon have direct access to Logan Airport upon the 1995 completion of the
Third Harbor Tunnel and Seaport Access Road. In addition, the site will be directly
accessible to the Central Artery and the Massachusetts Turnpike.

When can the South Station Redevelopment Project go forward?
o Zoning. The South Station Redevelopment Project can commence

immediately. As the city's planning agency, the BRA is responsible for land use
planning and in this capacity processed zoning for South Station which
completely allows and encourages the program outlined above. This zoning is
contained in Article 40 of the Boston Zoning Code which was adopted in
September 1989.

o Environmental Review. With respect to environmental approvals required
from the Commonwealth of Massachusetts, the BRA is currently preparing
notification documents so that the project will comply with the regulations of the
Massachusetts Environmental Protection Act (MEPA), and yet be able to
proceed on an accelerated schedule. The BRA is seeking waivers from certain

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Online LibraryBoston Redevelopment AuthoritySouth station technopolis office / biomedical research center → online text (page 1 of 3)