Cracking Down
Sep 1, 2008 12:00 PM
In an unusual move, Boston mayor Thomas Menino in late August said he wanted to require developers of large projects to line up financing before companies are given permission from the city to begin construction.
The mayor's office is working with the Boston Redevelopment Authority (BRA) to draft the regulation. Overall, 250 projects worth $12 billion are being erected throughout Boston. The mayor's office and the BRA want to ensure these projects come to fruition, especially given the current problems with the financial markets. Lenders have become much more stringent in providing development capital — the city could end up with a glut of half-completed buildings or vacant lots.
The regulation would force developers to prove they have financing within 18 months of gaining city approval for their projects. Without the proof of financing, they would have to file for extensions to retain building permits. The regulation needs to be vetted by BRA internal committees and then approved by the organization's board. That could take weeks or months.
News of the planned regulation comes at a time when two major projects under construction in Boston — the $650 million redevelopment of the Filene's building and an $800 million Columbus Center development — have run into financing issues.
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