Image courtesy of Stantec

Massport will seek a payment from developers of the 1.7 million-square-foot L Street Station project, which won approval this month for 636 housing units, to remove a residential deed restriction that it holds on the 15-acre South Boston property.

The authority will seek payment from Redgate Capital Partners and Hilco Redevelopment Partners, which had cut the housing portion of the project in half and redesigned the plan to locate residential buildings further from Massport’s neighboring Conley Container Terminal property.

“We have committed to base our negotiations on a market-driven approach to the value of the deed restriction,” Massport CEO Lisa Weiland said at Thursday’s board of directors meeting. 

The project at the 15-acre former Edison power plant property will include office, hotel and retail space along with the 636 housing units. Developers originally proposed 1,300 residential units but modified the proposal following objections from neighborhood residents and elected officials.

In 2017, Massport completed a new $75 million bypass road for freight traffic that previously used local streets to access the shipping terminal. When developers filed plans to redevelop the power plant site, Massport officials objected to plans for residences and potential future noise complaints from residents.

“The basic concern was we spent $75 million to build a freight corridor to take the trucks off the neighborhood streets, so to have residential was inconsistent with the investment we made to make it a better place for the community,” Weiland said.

Details on a public process that will influence the talks with Redgate and Hilco are still being formulated, she said. The developers did not respond to requests for comment.