As Winthrop Center Rises, Its Companion Affordable Housing Tower Stalls
After the city signed off on Millennium’s changes to Winthrop Center, including a $26M reduction in the firm’s affordable housing contribution, the future of the project — which is supposed to bring 168 affordable units to a lot on Tremont Street — is up in the air, Millennium’s co-developer told Bisnow.
“The project I would say is definitely on pause,” Asian Community Development Corp. Executive Director Angie Liou said in an interview. “One reason is due to the significant reduction in the [Inclusionary Development Policy] subsidy from Winthrop Tower.”
Millennium originally pledged $48M to a city fund geared toward affordable housing in exchange for added density to build its luxury condo tower in the Financial District. But in July, after construction stalled, the developer went before the Boston Planning and Development Agency and asked to reduce the size of the tower and switch plans from condos to rental apartments.
The BPDA approved the changes, and last month, construction resumed on the project after Millennium secured a $775M construction loan from British lender Cale Street Partners. It plans to deliver the two-tower, $1.3B mixed-use project in late 2022 as scheduled, despite the months-long pause in construction.
While Millennium was landing financing for its luxury skyscraper downtown, it was taking it away from its affordable project less than a mile away.
The $48M Millennium had pledged to commit to Boston’s IDP fund was earmarked to finance its own project at 290 Tremont St. in Chinatown, but when it reduced its commitment to $22M, it effectively stalled progress at Tremont Street. The city’s Inclusionary Development Policy requirement was determined by a formula based on Winthrop Center’s condominium sales.
"Despite the significant economic challenges created by COVID-19, the BPDA and City of Boston remain deeply committed to the P-12C project which will bring much needed affordable housing units and a Boston Public Library branch to Chinatown,” a spokeswoman for the BPDA said in a statement. “The BPDA is working to identify additional funding opportunities for this project."
A representative for Millennium referred Bisnow to documents from the July meeting. Tufts University and Corcoran Jennison Co., which are partners on the project with Millennium and ACDC, didn’t respond to requests for comment.
The Tremont Street site, a parking lot on a 29K SF land parcel next to Tufts Medical Center, is owned by the BPDA. The plans, which the BPDA approved in February, call for up to 168 affordable units, a 200-room hotel, a parking lot, retail space and up to 14K SF of community space meant for the Chinatown branch of the Boston Public Library.
If Millennium changes tack and begins to sell any of the 321 apartments as condominiums in the next four years, it will be obliged to issue supplemental payments toward the $26M funding gap, its Affordable Housing Agreement with the city states.
In July, Millennium principal Joe Larkin told the BPDA his firm remained committed to Tremont Street as co-developers mulled how to move forward. When asked about future condo sales, Larkin told the board the market is almost nonexistent.
“Millennium is living up to everything they have to, under the rule so to speak, and then some,” BPDA Vice Chairman Michael Monahan said in the meeting. “They’re victims in this in some way, too, as the affordable housing is.”
The pandemic has accelerated Boston’s emerging affordable housing crisis, Boston City Councilor Lydia Edwards, whose district includes Suffolk Downs, said on a Bisnow webinar in April. In the months since, financing for affordable projects have been hard to secure as government budgets face soaring deficits and private lenders pull back.
Boston City Councilor Ed Flynn, whose district includes both Winthrop Center and Tremont Street, said in a statement Wednesday he believes it’s important for both projects to move forward.
“The business community will be a critical partner as our city gets back on its feet after the pandemic, and I hope that the proponents of Winthrop Tower will continue to work with our city to ensure that our residents and businesses continue to thrive,” Flynn’s statement read.
At various points over the last three decades, the Tremont Street lot has been pitched as an underground MBTA stop and a Boston Arts Academy facility, according to a Chinatown Master Plan document in 2010. The ACDC formed a coalition to advance affordable housing at the site in 2015, because Liou said development hasn’t been able to keep up with the affordable housing demand.
Liou said the last major development in Chinatown, the 363-unit 66 Hudson at One Greenway project, drew thousands of applications for its limited affordable housing.
“Granted those applications, some of them were from outside of Boston and the area,” Liou said. “So not all the demand was from the city, but it goes to show how strong that demand is."