With groundbreaking more than a year away, Alexandria Real Estate Equities cleared a key hurdle last week to its plans to build a $1 billion, 1.8 million-square-foot laboratory-residential campus in Cambridge, Mass.
Meantime, opponents of the project pondered their next move.
The Cambridge City Council approved Alexandria's request to rezone 15.7 acres within the East Cambridge neighborhood to accommodate the lab project, which would be built in phases over 10 years. The council voted 8-1, with City Councilor Craig Kelley opposed, after Alexandria fulfilled a council request to include a greater mix of uses within the development plan.
Having obtained the planned urban-density overlay zoning it sought, Alexandria will now pursue approvals from the city's Planning Board to build its project within the new PUD zone, and to approve project site plans.
"More than likely, that is a phase that will occur over the next 12 to 18 months," Tom Andrews, senior vice president for Alexandria, told BioRegion News last week. As a result, he said, "it is a little early to talk about a construction timeframe."
The 10-year project build-out, Andrews said, will stretch construction into several economic cycles, starting with the current financial turmoil. "The planning and permitting for the future of [the project] is our top priority. We're committed to the project going forward."
Alexandria's so-called Binney Street project would consist of 1.5 million square feet of labs spread among five buildings, and 220,000 square feet of about 220 new housing units located in two buildings. "But that can change over time depending upon the market," Andrews said.
Units will include an as-yet-undetermined mix of market-rate rental apartments and for-sale condominiums, and 45 below-market "moderate-income" housing units to be leased to tenants or sold to buyers. These units will comprise 35 percent of the total residential space, and will be available to city residents earning between 80 and 120 percent of the $84,300 median income in the area calculated by the US Department of Housing and Urban Development for the region that includes Cambridge and Boston.
In addition to including housing in the project, other revisions designed to reflect comments or requests by Cambridge officials and residents include: dropping a sixth lab building from its plans; adding and setting aside undeveloped open space; and deeding to the city the 52,000-square-foot Foundry building, at 101 Rogers St., for municipal and community uses. Some 10,000 square feet of the Foundry building is now set aside for such uses.
The project would also include 20,000 square feet of ground-floor retail space, envisioned to be divided into several small shops serving residents and life-sciences professionals at the campus, Andrews said.
The Cambridge site is one of only a handful of projects that Alexandria is still shepherding through development stages despite the ongoing financial crisis that has affected many life-sci real-estate developers and potential tenants.
Alexandria, a publicly traded real estate investment trust headquartered in Pasadena, Calif., has not been immune to the downturn. Within Cambridge and neighboring Boston, the REIT last fall shelved two early-stage projects [BRN, Dec. 1, 2008]:
• The $300 million, 425,000-square-foot Longwood Center project, which Alexandria and a co-developer partner, National Development, would build on a 1-acre site owned by the Joslin Diabetes Center at Brookline and Longwood avenues, in Boston's pricey Longwood Medical Area. Longwood Center is to remain on hold at least until spring, pushing back the project's completion date to 2011, executives from both developers said last fall.
• Renovation of 75,000 square feet of lab space at 215 First St. in Cambridge, comprising approximately 20 percent of the building's floor space. The renovation would more than double the current 30,000-square-foot lab space now in place at 215 First St., a 380,000-square-foot building called the Athenaeum.
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However, the Athenaeum and Longwood Center projects may be taken off the back burner, according to Andrews. "Given the current economic climate, we are exercising prudence and re-phasing the project in order to appropriately assess market conditions," he said of Athenaeum. "This renovation project remains a high priority for Alexandria and we hope to restart construction activities in the near future."
As for Longwood Center, he added: "We are working to achieve an appropriate level of pre-leasing before commencing vertical construction on this project."
By contrast, Alexandria kept the East Cambridge project alive through city government reviews that began after it submitted its original rezoning petition to add 600,000 new square feet of lab space to the 900,000 square feet it is entitled to build on its project site.
The site is covered by "industry" districts that define permitted uses as "offices and laboratories." Part of the site is additionally covered by a "planned unit development" zone whose uses include "office with supporting commercial activities."
Alexandria agreed to revise its proposal last September, intent on winning over officials and residents who had commented on the original project. The City Council agreed to let Alexandria re-file its original application, incorporating changes sought by the city, without the delay and expense of filing a new application from scratch, as the developer said would have happened had the council let the original application lapse on Sept. 24, 2008, without action [BRN, Sept. 22, 2008].
The project that zoning officials approved last week would nearly double Alexandria's current Cambridge holdings, totaling some 2 million square feet of owned and managed space, including the Technology Square complex, which it bought from MIT in 2005 for $600 million.
Cambridge accounts for half of Alexandria's 4 million square feet of holdings in Massachusetts, and 16 percent of its total portfolio of 12.6 million square feet — a figure that includes 11.7 million rentable square feet plus 875,000 square feet of space now under development.
'Possibility of Litigation'
The REIT's revisions have done little to reduce opposition to the project by many Cambridge residents, who have cited a variety of quality-of-life, health, and environmental concerns. In recent weeks, more than 100 residents signed an online petition declaring that Alexandria's project would "negatively affect the life of East Cambridge residents."
Marie Saccoccio, a fourth-generation East Cambridge resident with a law practice based in the city, told BRN that opponents will soon consider a response to the rezoning vote, which followed about 18 months of attempts at community outreach and council review of Alexandria's plans.
"Some people want to go door to door and tell others not to vote for these City councilors [who voted for the rezoning]. But that doesn't help us down the street. There's a possibility of litigation. I don't think Alexandria would like that," Saccoccio said. "I don't know. And if I did know, I wouldn't share it."
Among her complaints was that the council's review process was not extensive enough to assess the project's likely environmental effects, and that resulted in "a done deal" for Alexandria. She said supporting her assertion were comments made by Alexandria Chief Financial Officer Dean Shigenaga, who hours before the council was to vote on the project described it to analysts during an earnings conference call as "our large land effort in Cambridge, which is going through with the city as we speak."
Saccoccio and other residents contend that the project is too dense for its surrounding neighborhood, since it would allow buildings of up to nine stories high, not counting mechanical units, which are taller than the limits of the 2001 Eastern Cambridge Planning Study; and not safe enough to be situated near residences like hers because Biosafety Level 3 research would be allowed within the project.
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"We are really talking about a wall stretching from First Street to Sixth Street," Saccoccio said. "Some of the neighbors were really looking to make it look more like a neighborhood."
City Councilor David Maher defended the decision to set aside the Eastern Cambridge Planning Study, known as ECaPS, by saying Alexandria would yield more open space for the project than it originally planned, according to a webcast of the Feb. 9 meeting. Reagrding the BSL-3 facility, Maher and other Cambridge officials have joined Alexandria, in part through a public meeting held last fall, in trying to reassure residents that such research could be carried out safely.
Andrews said Alexandria has demonstrated its commitment to safety by ruling out BSL-4 labs for its campus, and noted that BSL-3 labs were being operated by other life-sci businesses and research institutions in Cambridge. "Our top priority is to ensure the safety of our residents, our tenants, our nearby residents, and any visitors that come to our buildings," he said.
In meeting minutes and local news programs, other residents were quoted as saying Cambridge officials should have pressed Alexandria for more concessions. Alexandria has cited its commitment to spend $9.5 million to build both a new 2-acre Rogers Street Park and the 0.3-acre Triangle Park. In addition, the REIT would pay the city $8.5 million for the Rogers Street park after it issues its first certificate of occupancy for the first unit completed in the residential portion of the project. The city would gain the remaining $1 million after Alexandria completes 700,000 square feet of commercial space.
The REIT also agreed to donate $12 for every square foot of commercial space it completes after the first 1 million square feet are completed to a new Open Space Acquisition Fund, a city vehicle for acquiring undeveloped land in East Cambridge.
Opponents were unmoved. "[I] also wonder where the city is going to buy more open space. [I am] really curious to see: Will they use all that money in East Cambridge? Doubtful," Ilan Levy, who started an online petition against the project, wrote in a Feb. 7 post on his blog, Cambridge Community Television.
'Hope, Not Fear'
Other factors in the council's approval vote were projections by Alexandria that the project, when fully built out, would generate between $9 million and $12 million a year in city taxes and create about 3,000 permanent new jobs, not including construction jobs.
Officials and members of Carpenters Local 40 and Laborers' International Union of North America Local 151 spoke out in favor of the project during recent public meetings, including a public comment period that preceded the Feb. 9 rezoning vote.
"Our future doesn't look too good unless we get projects like this off the ground," George Donahue, business agent of Boston Plumbers & Gasfitters Local 12, told the council.
Terrence Smith, director of government affairs for the 1,500-member Cambridge Chamber of Commerce, called the zoning change "a significant step forward in ensuring Cambridge's long-term leadership in knowledge-based industries while providing significant community benefits.
"This is truly a once-in-a-generation opportunity that will benefit Cambridge," Smith added. The rezoning "demonstrates that Cambridge is optimistic, and that we view the future with hope, not fear."
At the Jan. 30 meeting of the council's Ordinance Committee, Joe Bonfiglio, business manager for the Laborer's Union #151, endorsed Alexandria's project by telling council members about competition from other cities for biotech business, according to the committee's minutes of that meeting.
Those minutes also recorded an endorsement of Alexandria's project by the Massachusetts Biotechnology Council, the state's life-science association with more than 500 members.
"There is no better place than Cambridge, and not a better time than now for this project. It will serve as an economic catalyst," Stephen Mulloney, the MBC's director of policy and public affairs, told the Cambridge City Council. "This project will reaffirm Cambridge's position in the biotechnology world."
Another biocampus supporter has been Tim Rowe, president of the Cambridge Innovation Center, which includes life-science companies among its more than 175 tech startups.
Saccoccio faulted Maher, the chairman of the Ordinance Committee, for demonstrating a conflict of interest: He voted in favor of the rezoning nine months after Alexandria paid $2,500 to serve as a "community builder" sponsor of the Circle of Friends Gala held by the nonprofit Cambridge Family & Children's Service, where Maher serves as director of development, and where he has been employed since October 1992.
"The process really was corrupted because of his role and because of the conflict," Saccoccio said.
Maher disclosed the potential conflict in a Jan. 27 letter to City Clerk D. Margaret Drury in which he denied he had been compromised — only after opponents raised the issue at public meetings, Saccoccio countered — and Maher read the letter at the Feb. 9 meeting.
"Alexandria's sponsorship of CFCS does not influence me in my role as City Councilor in relation to the pending zoning petition, or in any other way," Maher wrote. "Whether a person or entity is a donor to CFCS has not and will not interfere with my ability to be fair and impartial while weighing decision or vote as a Cambridge City Councilor."
Maher also said he consulted with the state Ethics Commission and was allowed to participate in the vote. The council member did not return e-mail messages from BRN seeking additional comment in time for this publication.