Olmsted Green provides a terrific example. The transformation of the former Boston State Hospital——a tarnished but promising jewel in Greater Boston’s urban landscape——underscores the importance of dealing with regulatory uncertainty and government agencies when managing redevelopment risks.
Stakeholders had their eye for years on the 42-acre former hospital site, vacant since the 1980s. The buildings and grounds were prized for their re-use potential, boasting a Frederick Law Olmsted landscape and easy access to several vibrant neighborhoods, jobs, community resources and health services.
Despite high hopes, an early revitalization effort stalled. Uncertainty about a weakening investor market in the late-1990s, proposed environmental regulations and related remediation risks all figured in.
The vision of Lena Park CDC and New Boston Fund, Inc., however, was 20/20. Lena Park is a well-established community development non-profit, and New Boston is a real estate investment management company with a solid track record structuring and executing complex deals.
The two began their $180 million Olmsted Green collaboration in 2005. They saw a thriving, mixed-income community, marrying green design, a variety of housing opportunities and resources for health, recreation and other community-building programs.
To get there from an environmental perspective, New Boston and Lena Park focused on how to navigate an extremely uncertain regulatory environment. Controversial, and potentially problematic, new environmental regulations were being considered by the Massachusetts Department of Environmental Protection. The proposed implementation timetable for those regulations overlapped perfectly with closing construction financing and beginning the actual work at the Site. It was at this point that Goulston & Storrs’ assistance became invaluable to the collaboration.
To address the associated uncertainty, Goulston & Storrs attorney, Ned Abelson, took a strategic proactive approach. “We invested a lot of time working with the regulatory agency personnel, providing them with as much familiarity with the proposed project as possible. Developing a strong rapport with them gave us the ability to manage the project and the associated construction work in a way that fit with the proposed regulatory program. Having that rapport helped structure a transaction where all the pieces made sense to the project’s many lenders,” Abelson added.
Ned, who led the environmental team, helped New Boston Fund build meaningful relationships with the right regulatory people, leading to the ultimate success of the project. Today, the initial phase of the project is complete. Interestingly, the proposed regulatory program has yet to be implemented.
If you’d like a more detailed look at how his team helped make Olmsted Green a reality, please contact Ned Abelson, a member of Goulston & Storrs’s Environmental group.