Mass. Convention Center Authority completes purchase of 5.6 acres near Boston Convention & Expo Center

The Massachusetts Convention Center Authority (MCCA) has completed the purchase of 5.6 acres of land near the Boston Convention & Exhibition Center (BCEC) to be used for the development of two mid-priced hotels and parking, according to MCCA executive director James Rooney. The $33 million land investment is expected to generate significant positive returns. The MCCA expects to receive more than $2 million annually from hotel ground rent and parking fees. If the process moves ahead as planned, construction of the two hotels, containing a total of 400 to 500 rooms, could start at the end of 2013 and the hotels could be open in 2015. Plans for parking are expected to begin with surface parking to serve the hotels, with later construction of parking garages (incorporating retail and other uses) in connection with the expansion of the BCEC. In addition, a few years after opening, the hotels will generate more than $5 million dollars per year in taxes ‐ property, sales, income, and hotel occupancy taxes. Overall, the project is expected to create 370 construction jobs and 175 permanent jobs. "This is a huge and very real step in our expansion plans, and one that sets the ball rolling," said Rooney. "This is allowing the MCCA to plan for its future, selectively acquiring available land near the BCEC, saving money in the long term, and allowing for better long‐term strategic planning, all for the benefit of the city and the Commonwealth." The BCEC has only 1,700 hotel rooms within walking distance, when compared to its competitors like San Diego (8,056), Orlando (10,709) and Philadelphia (8,012). Encouraging more hotel development around the BCEC has been deemed the most important immediate step to ensure the continued growth and success of the BCEC. In addition, since the hotels would be built on MCCA‐owned land, a substantial amount of ground rent would be paid by the hotel owner to the MCCA. The parcel purchased by the MCCA is located directly across the street from the BCEC on D Street in South Boston and was formerly owned by an affiliate of Intercontinental Real Estate. The land has long been a vacant eyesore, so cost, disruption and potential job losses associated with relocating existing businesses will be avoided. Two top real estate appraisers were engaged by the MCCA to provide analyses of land prices and trends and to provide specific opinions on the value of the site. The agreed upon price of $33 million was endorsed by both appraisers as a fair market value for the property. Money for the purchase will be drawn from the Convention Center Fund, which was established through 1997 legislation that authorized the BCEC. The money in the fund comes from specific tourist‐related taxes and fees, primarily hotel occupancy taxes. The fund's purposes are to provide payment of debt service on the BCEC bonds and for operations and support at the MCCA. Financial analyses and planning studies are still underway, but anticipated uses of the site include two midpriced hotels (400 to 500 total rooms), parking for hotels and to allow for the current parking lot at the rear of the BCEC (the location of the proposed expansion) to be relocated off site, and street‐level retail and restaurants that will generate revenue and enhance the environment around the BCEC. Various options for development of the hotels are being considered, but the hotels will likely be privately financed, owned and operated. If this approach is followed, the hotel development and operating teams will be selected through a competitive RFP process. The level of private investment to design and build the hotels is expected to be approximately $140 million. THE MASSACHUSETTS CONVENTION CENTER AUTHORITY owns and oversees the operations of the Boston Convention & Exhibition Center, the John B. Hynes Veterans Memorial Convention Center, the MassMutual Center in Springfield, MA and the Boston Common Parking Garage. In 2011, the MCCA hosted 237 events at the BCEC and the Hynes with 622,854 attendees, generating 446,596 hotel room nights and $520 million in economic impact. The MCCA strives to create opportunity through promoting organizational, supplier and meeting diversity at all of our facilities. The MCCA is currently in the midst of its Top 5 campaign to launch Boston into the top five convention destinations in North America. For more information, go to www.t5boston.com. ###