The One Lincoln Street Story
Black’s Guide Feature Story
In 2001, as Boston’s Big Dig moved closer to completion (scheduled for 2004), Boston’s Little Dig, the 900-car-garage and foundation for One Lincoln Street’s 1.1 million square foot, 36-story office building started to take shape.
Completed in June of 2003, the 36 story, $350 million One Lincoln Street project, developed by The Gale Company, marks the arrival of the first office building developed in Boston’s Financial District in over a decade. It also concludes a 15-year journey for the City of Boston and its designated minority development team of Columbia Plaza Associates (CPA) who were selected by the City in 1987 as the project’s minority developer and investment partner.
In 1992, after five years of planning, budgeting and community hearings, CPA and its then development partner Met Structures, obtained all of the necessary approvals to move ahead. Unfortunately, the City’s real estate market was in a recession – the cycle was missed – and One Lincoln Street was put on hold.
As Boston’s vacancy rate gradually dropped from 19.75% in 1993 to 6% in 1997, it was clear that new office space inventory was going to be needed in Boston. CPA then bought back the Met Structure’s interest and in conjunction with the Boston Redevelopment Authority (BRA) began looking for a new development partner.
At that time, the Chiofaro Company was selected by CPA and approved by the BRA. As is customary, the new developer was granted eighteen (18) months to buy the City’s two parcels totaling 50,000 square feet, one private parcel of 20,000 square feet (which was owned by the O’Connor Group), and then update the building plans, refresh and obtain new permits from city and state authorities and secure the necessary financing to allow the project to move ahead.
For a number of reasons, none of the agreed-upon criteria were accomplished and CPA and the BRA grew increasingly frustrated, impatient and disenchanted. The development agreement with Chiofaro expired in September 1999 and the project was in need of a new developer. Enter The Gale Company.
Once the Chiofaro designation agreement expired, The Gale Company took the initiative to meet with CPA and The O’Connor Group whose mid-block property was essential to develop the project. In two weeks time, The Gale Company and CPA formed a joint venture called Kingston Bedford Joint Venture (KBJV). During this same time frame, KBJV entered into a sales contract with The O’Connor Group for the 20,000 square foot parcel. Two weeks later, this new development team, which now controlled the O’Connor parcel and was fortified with development capital from Morgan Stanley Real Estate Funds, received the endorsement of the Mayor and shortly thereafter received Board approval from the BRA. Unlike their developer predecessors, however, The Gale Company was only granted a six-month designation, beginning November 15, 1999 to purchase the three land parcels and start construction.
Through the winter of 1999/2000, The Gale Company mobilized a project consulting team led by Jung/Brannen Associates – architect, Weidlinger Associates, structural engineer, C3 – mechanical engineer, Haley & Aldrich – geotechnical engineer with Northland as its consultant and permitting coordinator. The entire project was then re-designed. The original 37-story project was cut to 36-stories which would allow for taller finished ceiling heights of 8’10” rather than 8’6” and still maintain the height envelope of 465’ approved by the City. Window dimensions were increased by 25%, interior finishes were upgraded, elevator capacity was improved, the entire mechanical system was re-designed with state-of-the-art technology and additional riser space was included which would provide for a more expansive internet and telecommunications building system.
By March 2000, the project was able to be priced and scheduled. Beacon/Skanska was selected as the Construction Manager. An all-in budget of $350 million for the project was established and STRS Ohio was brought into the deal as KBJV’s primary equity partner. Later on, GMAC was brought in to provide the necessary debt.
By mid-summer 2000, the site’s 1959 elevator parking garage and adjacent six story brick, 1898 brick building were demolished and the 12-month excavation phase (Little Dig) began.
By this time, the City’s vacancy rate had dropped to 3% and Class A rental rates exceeded $60/PSF for the first time in the City’s history (they would reach $80/PSF six months later). Also, given the recent pre-leasing success of the other three projects under construction at that time in the Back Bay and the Seaport District, it appeared to be an opportune time to hit the market with this premier project. And so, without any pre-leasing commitments, KBJV closed on the City and O’Connor parcels in April 2000 and began construction – five months after the City’s designation.
Simultaneously, during the summer of 2000, State Street Corporation, with 3.5 million square feet of office space in several downtown locations and in North Quincy, signed a Letter of Intent for half the building. State Street’s expanding operations, coupled with several lease expirations coincided with the 2003 delivery of One Lincoln Street. By the time the lease was fully negotiated and signed in May 2001, the State Street lease commitment had grown to over 1 million square feet – the entire project.
One Lincoln Street is located on a 70,000 square foot site bordered by Lincoln, Bedford, Kingston, and Essex streets. The site is one block from South Station (New England’s largest transportation hub), it is two blocks from New England’s largest bank (Fleet Bank) and the world headquarters for Fidelity Investments.
In addition, the project’s accessibility via public transportation or by car is unrivaled in the marketplace. Four major subway stops are all within a three-minute walk, the commuter rail station is one minute away and the water shuttle at Rowes Wharf is a ten-minute walk from the site. The site is opposite two new highway ramps, which will be connected to Boston’s Central Artery Project in 2005.
The One Lincoln Street project consists of the construction of approximately 1.1 million square feet of office space contained in a 36-story office tower with ground floor retail space and including a low-rise seven-story office building. The project also includes a five-level underground parking garage totaling 345,000 gross square feet.
One Lincoln Street’s design harmonizes with the surrounding neighborhood in scale and architectural elements and preserves the City’s history and character through the use of scale-sensitive elements in the facade design, carefully planned massing and materials and ornamentation characteristic of nearby landmark buildings.
One Lincoln Street is the first speculative office tower to be built in the United States in over a decade, yet it is one of only a few that is 100% pre-leased upon completion. “Although an impressive feat, it must be put into proper context” says The Gale Company partner John B. Hynes III. “We are, of course, extremely proud to be a part of this remarkable project. Our foresight, confidence in the marketplace and the effort to obtain the land, the development rights, the zoning approvals and the financing, proved to be effective. The timing of this hard work availed us to the State Street requirement. However, we also feel extremely fortunate to be teamed up with CPA who hung in there for 12 years, with significant capital at risk. And we are happy for the City too, who will receive $15 million in land sale proceeds and another $15 million in various linkage contributions from this project. We’ve come a long way in a short period of time, but it wouldn’t have been possible without the perseverance and resolve of the City’s leaders in government, the communities and commerce which has made Boston one of the most dynamic cities in the country to do business”.
“One Lincoln Street truly is a multi-faceted development story, with a myriad of twists, turns and ironies. Although it is a first in many ways, it is also a classic. It’s what America is all about as it embodies the successful partnership across cultural lines for a common good, which further enhances the quality and the growth of our great city”.