Boston-based HYM Investment Group is set to acquire the 161-acre Suffolk Downs racetrack property in East Boston and Revere for $155 million today, laying the groundwork for a mixed-use development that could reshape a large stretch of the Blue Line corridor.
“The objective for us to is create a community that produces jobs,” said Thomas O’Brien, managing director of HYM. “We want to make this a place that can attract office and life science tenants. To do that, you’ve got to make it a great place to live first.”
HYM has selected Boston-based CBT Architects to draw up a master plan for the property with the goal of breaking ground on the initial phase in late 2018, O’Brien said. Community meetings will begin in June to prepare for a formal filing with regulators in late fall.
For development on the 60 percent of the site located in Boston, HYM will comply with the city’s inclusionary development policy by reserving 13 percent of the units as affordable housing on-site, O’Brien said.
The Massachusetts Gaming Commission approved the terms of the sale in March with the racetrack agreeing to pay $20,000 a month to the new owners for the rights to host a limited schedule of live racing as well as simulcasting. The lease expires on Jan. 31 but has extension options that could keep the track open in 2018 depending upon the pace of the redevelopment.
Boston-based HFF arranged the acquisition financing in the form of an equity contribution from an undisclosed family office and debt from an out-of-state bank, Executive Managing Director John Fowler said.
The property is poised to become the latest in a series of massive redevelopment sites sprouting up in long-stagnant neighborhoods on the edges of the city.
Led by O’Brien, a former Boston Redevelopment Authority executive director, HYM is development manager for an office building containing the Boston Bruins’ new practice facility and a 295-unit apartment complex at the Boston Landing development in Allston, and developer of Bulfinch Crossing, the 2.9-million-square-foot mixed-use redevelopment of the Government Center garage property.
Next door to Boston Landing, Stop & Shop Supermarket Co. has filed preliminary plans to build more than 1,000 multifamily units in a mixed-use redevelopment of its 11-acre shopping center property. A New Jersey developer, the Michaels Organization, notified the Boston Planning and Development Agency this week of a proposed 262-unit residential complex at 40 Rugg Road in Allston.
And in South Boston, Boston-based Redgate recently proposed 2.1 million square feet of development including nearly 1,600 housing units at the former Boston Edison power plant property on Summer Street.
O’Brien compared the Suffolk Downs property’s potential to that of Federal Realty Investment Trust’s Somerville’s Assembly Row, where 3.5 million square feet of commercial and residential development is being built at a former failed shopping mall and automobile factory.
“Once you’ve created a sense of place, the employees will want to be there, and financial services and life science companies will want to be there,” he said.
A DLA Piper team, led by partner Bryan Connolly in Boston, represented the sellers in the sale and leaseback. Ropes & Gray negotiated the purchase-and-sale and lease for the buyers.
A separate DLA Piper team, led by partners Richard Rudman and Brian Hochleutner, counseled the buyer on acquisition financing and permitting and will continue to serve as advisers on future development.
This article was updated since its original publication to include the legal counsel representing the parties.