Leggat McCall says They Will Not Fail on One Charlestown

October 26, 2018
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One of the top officials at the Leggat McCall development company said the Boston-based construction leader is staking its reputation on making the Bunker Hill redevelopment project a success.

That was something that couldn’t be accomplished in the last go-around, which saw the plan and project team fold in late 2017. Now, with a team of Corcoran and Leggat, the new plan is getting ready for a rollout.

A company that puts more than $1 billion of new construction in the ground per year, most of it in Greater Boston, Leggat Co-President Eric Sheffels said at a remote City Council working session in the Harvard-Kent School on Oct. 18 that they could not entertain the idea that they would come up short like the previous development team did.

“Obviously we’re on the hot seat in trying to figure out how to create a viable project that is acceptable to and cherished by all of the various constituencies here,” he told the packed room, the first time Leggat has been able to speak freely since getting the development designation last spring. “This is not something we can fail at. We do too much business in the area to fail at this. We took this project because we felt our extensive experience doing development in the private sector will allow us to bring creative solutions to these complex problems.”

Leggat has been designated with the former developer, Corcoran, to complete the new project. Gone is Corcoran’s initial partner, SunCal, and a new plan has been crafted that will begin to shore up details in the fall and early next year. Sheffels said in a perfect world they could break ground in early 2021, and that Leggat planned an overall spend of $1.25 billion on the project – a project that will also be subsidized in creative ways.

Councilor Lydia Edwards chaired the working session and said there aren’t yet any details of the plan formed. While some are frustrated by that, she said it should be considered a win for the community.

“There is no formal plan right now and I think that’s a good thing,” she said. “The plan is to have your voices inform what going to happen here. It may be frustrating that we don’t have any absolutes right now, but we do not want them to deliver an pre-determined plan to us.”

Boston Housing Authority (BHA) Director Bill McGonagle and Sheffels detailed the project, noting that at no time can they go over the 2,700 unit maximum. In addition, all of the 1,110 public housing units will be redeveloped along with market units, perhaps a 200-unit affordable senior building, and maybe some workforce housing for those already in the neighborhood feeling the crunch of skyrocketing housing prices.

Sheffels said they are required to put all but 100 of the public housing units back on site. That said, if the numbers work, they can be compelled to bring those units back to the site.

Sheffels said they are looking at building four-story buildings on Bunker Hill Street, with two 10-story buildings further into the center of the development. There would be a total of 15 buildings on the site, most of them in low structures with parking on the surface.

They will complete it in seven or eight phases, which will prevent them from having to relocate most existing tenants.

“I think we’re going to seriously be able to minimize the possibility of any off-site relocation,” McGonagle said. “I am very confident we’ll be able to really, really minimize the relocation of families who don’t want off-site relocation.”

That will be accomplished by making the first building in phase one completely affordable housing, which Sheffels said would run contrary to the rest of the development – which contains public housing units side-to-side with market rate units. That first phase will see the demolition of 63 units of existing housing, and the creation of 160 family units. That, they said, is simply a plan that will allow for not having to relocate families outside of Charlestown.

The financing for the project has been one item of major curiosity. Most of the financing will come from private investment, with Leggat saying it planned to have a $1.25 billion spend.

However, McGonagle said it could not be accomplished on private investment alone.

“So what we have now is a number of units that will generate around $1 billion in private investment, but we’ll have to supplement that,” he said.

One of the supplements will be using Linkage fees – which are monies paid by developers to create affordable housing, though McGonagle said he wanted to limit that type of funding. The same was true for the Community Preservation Act (CPA) money.

Instead, the major supplement will be from a District Improvement Financing (DIF) program. That program will allow the City to issue bonds in anticipation of the future property taxes paid on the market rate units. When the property taxes begin to come in from the market rate units on the development, that money will be used to pay down the construction bonds used to finance a portion of the overall project.

“It’s not much of a leap from the original mission, which was to use the market rate units to cross subsidize the affordable units,” he said. “What’s very important to me is I am absolutely convinced this is a financeable project.”

He said they are still in discussions with the City about that plan, working carefully with the City’s financial departments to iron out that plan.

Many in the community took a careful approach to the development.

Tiara Murphy, president of the Charlestown Residents Alliance (CRA), said they have been working all summer with Leggat and the BHA on the new plan and are very happy so far.

“We are excited the planning process is moving ahead and the plan will ensure redevelopment of the 1,110 units of existing housing in a mixed-use development which we can all be proud of,” she said.

The CRA will be asking for development fees in order to hire staff for their organization in the future, and also to be able to bring in a world-class reading program to help children in the development catch up on reading scores.

Elaine Donovan, who had compiled a coalition of residents from the overall neighborhood, said they still have some concerns, but are ready to move ahead together.

“It’s not secret we were opposed to the original plan,” she said. “So I want to say the height and density is a concern for us. We have yet to see the new plans though…We want to work with the CRA. The new CRA is unbelievable. The change is quite obvious and we’re moving in a positive direction and we want to move together.”

Mark Russell, a long-time resident, and Tom Ward, a resident who represents Local 7 Ironworkers, were both concerned about construction techniques and union labor.

“We are concerned about the building materials – steel is ideal,” said Ward. “Public housing has always been built with steel, brick and mortar. Wood-framed, pre-fabricated crap should not be build down there…We’re looking forward to working on these projects.”

Ward said there is a Project Labor Agreement (PLA) on the first phase, and he would like to see it in other phases too.

Sheffels said they would not be using wood-framed construction.

“Is this going to be a wood-framed structure built with non-union workforces?” said Sheffels. “The answer to that is not it will not be. We fully intend it will be steel construction.”

Edwards said she didn’t anticipate another working session until after the first of the year. The project will likely be filed with the City in the first quarter of 2019.

One big issue for Edwards is getting a new Impact Advisory Group (IAG) on the project that has some new appointments and is expanded.

BPDA Project Manager Raul Duverge said they would contact the former IAG members to see if they are still interested in serving, but that they would also open it up to new appointments. While expanding the IAG would violate an executive order from the mayor, Duverge said they would take the request under consideration for this project.

Edwards said afterward she was particularly happy to see so many young people from the Bunker Hill development and the Turn It Around program in attendance. She estimated that there were about 60 youth from the development at the meeting.

“All of Charlestown is on the same team and they showed up,” she said, noting that she is “cautiously optimistic” at this point.