After unsuccessfully trying to sell the residential portion of the development known as Russia Wharf, executives at Boston Properties Inc. are now examining reducing the number of residences to 65 from 215.
Boston Properties declined to comment on any changes that may be under consideration. But one real estate source with knowledge of the plan said Boston Properties is considering converting the residential portion into office space. Boston Properties has approval to build 215 residential units.
The Russia Wharf project, which was approved for 500,000 square feet of office space, is more than 80 percent pre-leased to Wellington Management Co. LLP. A new proposal would increase the office portion to 709,000 square feet.
The project, located on the corner of Congress Street and Atlantic Avenue, has undergone an extensive design review from the Boston Redevelopment Authority. If Boston Properties seeks to replace the residential component with another use, the landlord would have to notify the city. So far, Boston Properties has not done that, according to the BRA.
As the debt market has tightened, developers have had a hard time landing loans for projects. Financing has been especially scarce for developers of residential properties. But now, with a substantial drop-off in residential sales, developers and the city appear ready to take a different tack.
Last week the BRA allowed Lincoln Property Co. to renovate two commercial office buildings in the Fort Point Channel area, rather than convert the buildings into residential units as previously approved in 2006. In an effort to save $200 million and his struggling
1.2 million-square-foot project at the former Filene’s site in Downtown Crossing, John Hynes is eliminating plans for the top 14 residential floors.
Hynes’ struggle to secure a construction loan has been well publicized.
In November, Hynes ceased construction at the Filene’s site after failing to secure between $50 million and $100 million needed for a $400 million construction loan.
“It’s safe to say we’re not going to have any residential. That’s going to go,” he said. “As a result of that, the project is going to be smaller.”
Hynes said he is considering keeping a few of the top floors for executive offices.
Jessica Shumaker, a BRA spokeswoman, said the agency expects a revised design from Hynes soon. Though she hadn’t seen a new plan, Shumaker said she was aware the residential piece would be removed. “That seemed to be what was troubling their financing,” she said.