The agency in charge of the former South Weymouth Naval Air Station has spent
about $42 million in the past decade to redevelop the land. But the only new
building there is a marketing center – where potential tenants are pitched sites
that the developer still can’t access. More than a decade after military use of the
property ended, about two-thirds of the developable acreage is still owned and
controlled by the Navy.
The lack of progress contrasts sharply with what has happened to closed bases
elsewhere. Of the 24 bases the Navy marked for closure in 1995, the Weymouth
base is one of only three that have not been transferred out of military hands. Four
of the six Air Force bases that were marked for closure that year have been
completely transferred, as have 25 of 34 Army bases. Several bases that closed
around the same time now boast bustling industrial and commercial development.
The reasons behind the stalemate in South Weymouth center around bad decisions,
bad timing and, in some cases, plain bad luck. They include a revolving door of
leadership at the base oversight agency, South Shore Tri-Town Development Corp.,
a funding structure that relies heavily on the bond market, the Navy’s refusal to
hand part of the base over for free, and a lack of tax rates for the properties to be
developed.
Tri-Town’s first few years were characterized by raucous meetings and time-
consuming personality clashes. It took well over a year for the agency to hire its
first director. The agency then spent 18 months negotiating with a mall developer,
but the deal fell apart amid local opposition.
Bill Ryan, a former Weymouth selectman who was active on the base
redevelopment issue and later went to work as a spokesman for LNR Property
Corp., the company hired to develop the former base, said time was wasted
debating the mall plan proposed by Mills Corp.
Ryan said state and federal agencies were making it clear that a traffic-clogged
megamall was not the best option for the massive property, particularly when it
became apparent that a new Route 3 ramp to the property would not be approved.
In 2002, Tri-Town negotiated for about six months to make MassDevelopment the
project manager of the base, but local control issues complicated the discussion.
By the end of the year, Tri-Town board members decided to seek a private master
developer for the property, a model they had earlier avoided.
In September 2002, Tri-Town hired LNR to build what came to be known as
SouthField.
Facing the bond market
The 1998 law that created Tri-Town set the agency up to issue bonds to build on
the base. But last year when it was time to seek $110 million in the bond market,
potential investors balked at the risk.
“If this thing was ready to go two years ago, and I mean fully ready to go to the
bond market, I don’t think they would have had a problem getting the funding,”
said David Begelfer, CEO of the Massachusetts chapter of the National Association
of Industrial and Office Properties. “Clearly, no one knew about how bad things
were going to get.”
Tri-Town’s failure to raise money by selling bonds has frustrated LNR, Tri-Town’s
main source of cash for the SouthField project.
So LNR in April stopped making its payments, which last year made up 78 percent
of Tri-Town’s budget. LNR views the money – annual payments that grew from
$400,000 in 2004 to $3.1 million last year – as a line of credit to Tri-Town to cover
infrastructure costs. Just like that, there was no way to pay Tri-Town’s four-person
staff or bond counsel. A deal was worked out after a three-month impasse, but it
won’t prevent a similar standoff in the future.
AT A GLANCE
1,400: Total acres of the former South Weymouth Naval Station to be transferred
from the Navy to Tri-Town, then to developer LNR Property Corp.
549: Acres transferred so far.
324: Amount of developable land currently owned by LNR Property Corp. Homes and
a film production studio are planned for the land. Remaining acreage is protected
open space.
2,855: Total residences to be built, a mix of single-family homes, condos and
apartments.
2 million: Square footage of commercial space planned for the property.
Phase 1: 500 homes. First residents originally expected to move in during spring
2009. Construction has not started.
Phase 2: 800 to 1,000 residences and 300,000 to 650,000 square feet of retail and
industrial space. It was expected to begin in 2010.
Phase 3: 300 to 800 residences and 300,000 to 700,000 square feet of commercial
space. It was expected to start in 2014.
The issue raised several fundamental questions about the structure of Tri-Town and
whether it can pull off one of the biggest development projects in New England.
The law that established the group allowed it to seek up to $110 million in bonds
to foster development. This would mean annual debt payments of about $10
million. So far, there has not been anything approaching a revenue structure that
could handle such debt. The debt load would be unusually large for a small town.
Weymouth, which has seven times more households than the 2,855 that are
planned for the base, pays $9 million a year in debt service.
Under the state law that established it in 1998, Tri-Town is supposed to make its
bond payments with revenue from the taxing of base land. Even though LNR took
title to 324 acres of the base in 2006, only in recent weeks has the state been
given an outline that lays out how taxes would be determined.
A spokesman for the state Department of Revenue attributed the delays to Tri-
Town’s small staff – four full-time employees and one part-time controller. He also
said Tri-Town was at a disadvantage compared with cities and towns that have
years of statistical data to help build revenue forecasts when setting tax rates.
James Wilson, a former Tri-Town chairman and chief financial officer in Weymouth,
attributes much of the tax-plan delay to the Navy’s 2006 decision to seek $43
million for the base from Tri-Town rather than give the property away for free.
For SouthField, setting a tax rate is crucial because it shows prospective
bondholders that there is revenue that can be counted on. It also establishes an
expense for developers and potential tenants to know about before joining the
project.
Bruce Steadman, president of the Plattsburgh (N.Y.) Airbase Redevelopment Corp.,
said his agency avoided issuing bonds for its redevelopment of a base that closed
in 1995. Banks and investors with the kind of money the agency would need would
not see a reliable enough revenue stream to ensure that they would be paid back
from the bonds, Steadman said.
“You have a start-up with no money with a promise to pay and no hard assets,
except for some land,” he said. “If you’re sitting 500 miles away in a 35-story
skyscraper, you look at that and say, ‘I’m firing this guy that brought this to my
desk.’”
Steadman said Plattsburgh focused on getting smaller, piecemeal loans from local
banks instead. Once momentum built, several moneyed players wanted to be
involved.
“We thought, ‘We’re not going to hit any home runs; we’re going to hit singles and
doubles,’” Steadman said.
At Kelly Air Force Base in San Antonio, Texas, overseers would not have been able
to get the $30 million they needed to redevelop the base strictly from the bond
market. The Greater Kelly Development Corp. secured federal loans that allowed it
to make improvements that Boeing Aircraft wanted to see before becoming an
anchor tenant. This created wider interest in the development.
“We did have to put up a lot at the front end,” said Rudolph DiLuzio, a Medford
native who at the time ran the firm hired to be the support contractor for the San
Antonio project. “We did a market analysis of what industries were expanding,
what they were looking for, and how they matched up with what we had.”
One of the big differences between the successfully redeveloped bases and the
Weymouth base involves the free transfer of military land. Base developers in
Plattsburgh, N.Y., and San Antonio, Texas, received their base land – a total of
5,400 acres – for free.
In 2005, officials in Weymouth and voters in Rockland and Abington approved the
SouthField development plan. But a base closure law that allowed the Navy to
change how it handled closed bases had already passed. The Navy was now
seeking “fair market value” for its property.
Tri-Town only expected to have to cover the costs of water and sewer infrastructure
on the base – about $40 million – not the cost of the land as well. Suddenly, the
Navy was seeking $43 million for the base land, mostly to recoup the cost of the
environmental cleanup.
The project has been at a relative standstill ever since. A bill filed by U.S. Rep.
William Delahunt seeks to allow the free transfer again, but it seems to have little
momentum.
LNR says it has purchase-and-sale agreements with four commercial tenants who
are waiting on the Navy transfer before closing their deals.
State Rep. Ronald Mariano said the current stalemate is regrettable, but he’s
optimistic. “Tri-Town is doing as well now as it’s ever done,” the Quincy Democrat
said. “Have we had missteps and setbacks? Absolutely. But by the same token,
LNR has had setbacks and missteps. It was trial-and-error for a while there. But I
think we’re on the right track.”
LNR Payments to Tri-Town’s budget
In 2002, Tri-Town hired LNR Property Corp. to be master developer of the
Weymouth air base. Ever since, the company has helped fund a majority of Tri-
Town’s operating budget, which previously was almost entirely supported by
government grants.
LNR’s payments have grown significantly from year to year as Tri-Town has taken
on more complex tasks, like environmental permitting, formulating a tax plan and
attempting to enter the bond market.
LNR considers the money a line of credit that Tri-Town is responsible for paying
back incrementally. Tri-Town board members have bristled at that interpretation,
saying the agreement between the parties puts no timeline on when and how the
money will be paid back.
The following contributions to Tri-Town’s budget reflect only a fraction of what LNR
has spent on the project. The company says it has spent a total of $80 million
developing SouthField. (Years below refer to fiscal years.)
2004 – $400,000
2005 – $477,907
2006 – $1,479,996
2007 – $2,794,485
2008 – $3,145,201
Source: Tri-Town annual reports
TIMELINE
A look at the protracted approach to redeveloping the former South Weymouth air
base.
1995
South Weymouth Naval Air Station included on a list of sites to be closed under the
Base Realignment and Closure law.
Oct. 1, 1997
Base closes after congressional vote. Navy buildings vacated one by one after a
decommissioning ceremony.
1997
A 30-member Naval Air Station Planning Committee deals with a proposal by Mills
Corp. to build a 2.1-million-square-foot megamall on the base. The plan fades
away over the next two years as officials push for something other than a mall.
August 1998
The Legislature creates South Shore Tri-Town Development Corp. to serve as public
overseer of the base redevelopment and to be in charge of bonding for the project.
The legislation establishes a 20-year life for Tri-Town.
2001
After the mall plan is put aside, a more modest plan backed by MassDevelopment
calls for office buildings and 500 to 700 units of housing for senior citizens. Local
control issues complicate the discussion. Tri-Town seeks a waiver from the state to
begin an initial phase of the project.
2002
In granting the waiver, the state’s then-secretary of environmental affairs, Robert
Durand, calls for the development of villages with more housing, close to existing
commuter rail service. That sparks a change in thinking at Tri-Town – one that
moves the board away from both of the previous plans.
2002
A change in the Base Realignment and Closure law allows the Navy to seek “fair
market value” for its closed bases.
October 2002
Tri-Town selects LNR Property Corp. to be master developer. LNR begins supplying
capital to help Tri-Town operate. Tri-Town is responsible for governing LNR as it
develops plans.
May 2003
Navy transfers, for free, 549 acres of the base to South Shore Tri-Town
Development Corp. The transfer includes 324 developable acres. (The land would
later be transferred to LNR. The Navy would also later seek “fair market value” for
the rest of the base.)
September 2004
LNR unveils the Village Center Plan, a new master plan calling for 2,855 units of
housing and incorporating principles of “smart growth,” a term used by community
planners to describe developments that include a mix of residential and commercial
buildings near existing transportation and utilities.
June-July 2005
LNR’s Village Center Plan and zoning bylaws are approved at town meetings in
Abington and Rockland, and by the Weymouth Town Council.
December 2005
LNR files a Notice of Project Change with the state and is granted a waiver to allow
some construction prior to acquisition of the entire base from the Navy.
2006
Navy begins to indicate it will seek fair market value for the Weymouth base
instead of transferring it for free.
May 2006
LNR announces that it will call the redeveloped base SouthField.
November 2006
Construction begins at the base entrance on Route 18. Runway demolition follows.
Construction of 250 condos, 160 townhouses and 90 single-family homes does not
begin as expected.
March 2008
A deal calling for Tri-Town to pay the Navy $43 million for the rest of the air base
is reached. The dollar figure includes the cost of an extensive environmental
cleanup. Later in the year, Tri-Town fails to obtain money in the constricted bond
market to pay for the deal. It later begins a push in Congress to get the land for
free.
August 2008
The Legislature passes, and governor signs, a bill that extends Tri-Town’s life until
2053. The agency originally was to have dissolved in 2017, after full redevelopment
of the base.
June 2009
Frustrated by a lack of return on its infrastructure investments, LNR holds back on
annual payments to Tri-Town until the agency can demonstrate a “viable path
forward.” Tri-Town says it will stop operating without the money. An agreement for
payment in installments is reached.
about $42 million in the past decade to redevelop the land. But the only new
building there is a marketing center – where potential tenants are pitched sites
that the developer still can’t access. More than a decade after military use of the
property ended, about two-thirds of the developable acreage is still owned and
controlled by the Navy.
The lack of progress contrasts sharply with what has happened to closed bases
elsewhere. Of the 24 bases the Navy marked for closure in 1995, the Weymouth
base is one of only three that have not been transferred out of military hands. Four
of the six Air Force bases that were marked for closure that year have been
completely transferred, as have 25 of 34 Army bases. Several bases that closed
around the same time now boast bustling industrial and commercial development.
The reasons behind the stalemate in South Weymouth center around bad decisions,
bad timing and, in some cases, plain bad luck. They include a revolving door of
leadership at the base oversight agency, South Shore Tri-Town Development Corp.,
a funding structure that relies heavily on the bond market, the Navy’s refusal to
hand part of the base over for free, and a lack of tax rates for the properties to be
developed.
Tri-Town’s first few years were characterized by raucous meetings and time-
consuming personality clashes. It took well over a year for the agency to hire its
first director. The agency then spent 18 months negotiating with a mall developer,
but the deal fell apart amid local opposition.
Bill Ryan, a former Weymouth selectman who was active on the base
redevelopment issue and later went to work as a spokesman for LNR Property
Corp., the company hired to develop the former base, said time was wasted
debating the mall plan proposed by Mills Corp.
Ryan said state and federal agencies were making it clear that a traffic-clogged
megamall was not the best option for the massive property, particularly when it
became apparent that a new Route 3 ramp to the property would not be approved.
In 2002, Tri-Town negotiated for about six months to make MassDevelopment the
project manager of the base, but local control issues complicated the discussion.
By the end of the year, Tri-Town board members decided to seek a private master
developer for the property, a model they had earlier avoided.
In September 2002, Tri-Town hired LNR to build what came to be known as
SouthField.
Facing the bond market
The 1998 law that created Tri-Town set the agency up to issue bonds to build on
the base. But last year when it was time to seek $110 million in the bond market,
potential investors balked at the risk.
“If this thing was ready to go two years ago, and I mean fully ready to go to the
bond market, I don’t think they would have had a problem getting the funding,”
said David Begelfer, CEO of the Massachusetts chapter of the National Association
of Industrial and Office Properties. “Clearly, no one knew about how bad things
were going to get.”
Tri-Town’s failure to raise money by selling bonds has frustrated LNR, Tri-Town’s
main source of cash for the SouthField project.
So LNR in April stopped making its payments, which last year made up 78 percent
of Tri-Town’s budget. LNR views the money – annual payments that grew from
$400,000 in 2004 to $3.1 million last year – as a line of credit to Tri-Town to cover
infrastructure costs. Just like that, there was no way to pay Tri-Town’s four-person
staff or bond counsel. A deal was worked out after a three-month impasse, but it
won’t prevent a similar standoff in the future.
AT A GLANCE
1,400: Total acres of the former South Weymouth Naval Station to be transferred
from the Navy to Tri-Town, then to developer LNR Property Corp.
549: Acres transferred so far.
324: Amount of developable land currently owned by LNR Property Corp. Homes and
a film production studio are planned for the land. Remaining acreage is protected
open space.
2,855: Total residences to be built, a mix of single-family homes, condos and
apartments.
2 million: Square footage of commercial space planned for the property.
Phase 1: 500 homes. First residents originally expected to move in during spring
2009. Construction has not started.
Phase 2: 800 to 1,000 residences and 300,000 to 650,000 square feet of retail and
industrial space. It was expected to begin in 2010.
Phase 3: 300 to 800 residences and 300,000 to 700,000 square feet of commercial
space. It was expected to start in 2014.
The issue raised several fundamental questions about the structure of Tri-Town and
whether it can pull off one of the biggest development projects in New England.
The law that established the group allowed it to seek up to $110 million in bonds
to foster development. This would mean annual debt payments of about $10
million. So far, there has not been anything approaching a revenue structure that
could handle such debt. The debt load would be unusually large for a small town.
Weymouth, which has seven times more households than the 2,855 that are
planned for the base, pays $9 million a year in debt service.
Under the state law that established it in 1998, Tri-Town is supposed to make its
bond payments with revenue from the taxing of base land. Even though LNR took
title to 324 acres of the base in 2006, only in recent weeks has the state been
given an outline that lays out how taxes would be determined.
A spokesman for the state Department of Revenue attributed the delays to Tri-
Town’s small staff – four full-time employees and one part-time controller. He also
said Tri-Town was at a disadvantage compared with cities and towns that have
years of statistical data to help build revenue forecasts when setting tax rates.
James Wilson, a former Tri-Town chairman and chief financial officer in Weymouth,
attributes much of the tax-plan delay to the Navy’s 2006 decision to seek $43
million for the base from Tri-Town rather than give the property away for free.
For SouthField, setting a tax rate is crucial because it shows prospective
bondholders that there is revenue that can be counted on. It also establishes an
expense for developers and potential tenants to know about before joining the
project.
Bruce Steadman, president of the Plattsburgh (N.Y.) Airbase Redevelopment Corp.,
said his agency avoided issuing bonds for its redevelopment of a base that closed
in 1995. Banks and investors with the kind of money the agency would need would
not see a reliable enough revenue stream to ensure that they would be paid back
from the bonds, Steadman said.
“You have a start-up with no money with a promise to pay and no hard assets,
except for some land,” he said. “If you’re sitting 500 miles away in a 35-story
skyscraper, you look at that and say, ‘I’m firing this guy that brought this to my
desk.’”
Steadman said Plattsburgh focused on getting smaller, piecemeal loans from local
banks instead. Once momentum built, several moneyed players wanted to be
involved.
“We thought, ‘We’re not going to hit any home runs; we’re going to hit singles and
doubles,’” Steadman said.
At Kelly Air Force Base in San Antonio, Texas, overseers would not have been able
to get the $30 million they needed to redevelop the base strictly from the bond
market. The Greater Kelly Development Corp. secured federal loans that allowed it
to make improvements that Boeing Aircraft wanted to see before becoming an
anchor tenant. This created wider interest in the development.
“We did have to put up a lot at the front end,” said Rudolph DiLuzio, a Medford
native who at the time ran the firm hired to be the support contractor for the San
Antonio project. “We did a market analysis of what industries were expanding,
what they were looking for, and how they matched up with what we had.”
One of the big differences between the successfully redeveloped bases and the
Weymouth base involves the free transfer of military land. Base developers in
Plattsburgh, N.Y., and San Antonio, Texas, received their base land – a total of
5,400 acres – for free.
In 2005, officials in Weymouth and voters in Rockland and Abington approved the
SouthField development plan. But a base closure law that allowed the Navy to
change how it handled closed bases had already passed. The Navy was now
seeking “fair market value” for its property.
Tri-Town only expected to have to cover the costs of water and sewer infrastructure
on the base – about $40 million – not the cost of the land as well. Suddenly, the
Navy was seeking $43 million for the base land, mostly to recoup the cost of the
environmental cleanup.
The project has been at a relative standstill ever since. A bill filed by U.S. Rep.
William Delahunt seeks to allow the free transfer again, but it seems to have little
momentum.
LNR says it has purchase-and-sale agreements with four commercial tenants who
are waiting on the Navy transfer before closing their deals.
State Rep. Ronald Mariano said the current stalemate is regrettable, but he’s
optimistic. “Tri-Town is doing as well now as it’s ever done,” the Quincy Democrat
said. “Have we had missteps and setbacks? Absolutely. But by the same token,
LNR has had setbacks and missteps. It was trial-and-error for a while there. But I
think we’re on the right track.”
LNR Payments to Tri-Town’s budget
In 2002, Tri-Town hired LNR Property Corp. to be master developer of the
Weymouth air base. Ever since, the company has helped fund a majority of Tri-
Town’s operating budget, which previously was almost entirely supported by
government grants.
LNR’s payments have grown significantly from year to year as Tri-Town has taken
on more complex tasks, like environmental permitting, formulating a tax plan and
attempting to enter the bond market.
LNR considers the money a line of credit that Tri-Town is responsible for paying
back incrementally. Tri-Town board members have bristled at that interpretation,
saying the agreement between the parties puts no timeline on when and how the
money will be paid back.
The following contributions to Tri-Town’s budget reflect only a fraction of what LNR
has spent on the project. The company says it has spent a total of $80 million
developing SouthField. (Years below refer to fiscal years.)
2004 – $400,000
2005 – $477,907
2006 – $1,479,996
2007 – $2,794,485
2008 – $3,145,201
Source: Tri-Town annual reports
TIMELINE
A look at the protracted approach to redeveloping the former South Weymouth air
base.
1995
South Weymouth Naval Air Station included on a list of sites to be closed under the
Base Realignment and Closure law.
Oct. 1, 1997
Base closes after congressional vote. Navy buildings vacated one by one after a
decommissioning ceremony.
1997
A 30-member Naval Air Station Planning Committee deals with a proposal by Mills
Corp. to build a 2.1-million-square-foot megamall on the base. The plan fades
away over the next two years as officials push for something other than a mall.
August 1998
The Legislature creates South Shore Tri-Town Development Corp. to serve as public
overseer of the base redevelopment and to be in charge of bonding for the project.
The legislation establishes a 20-year life for Tri-Town.
2001
After the mall plan is put aside, a more modest plan backed by MassDevelopment
calls for office buildings and 500 to 700 units of housing for senior citizens. Local
control issues complicate the discussion. Tri-Town seeks a waiver from the state to
begin an initial phase of the project.
2002
In granting the waiver, the state’s then-secretary of environmental affairs, Robert
Durand, calls for the development of villages with more housing, close to existing
commuter rail service. That sparks a change in thinking at Tri-Town – one that
moves the board away from both of the previous plans.
2002
A change in the Base Realignment and Closure law allows the Navy to seek “fair
market value” for its closed bases.
October 2002
Tri-Town selects LNR Property Corp. to be master developer. LNR begins supplying
capital to help Tri-Town operate. Tri-Town is responsible for governing LNR as it
develops plans.
May 2003
Navy transfers, for free, 549 acres of the base to South Shore Tri-Town
Development Corp. The transfer includes 324 developable acres. (The land would
later be transferred to LNR. The Navy would also later seek “fair market value” for
the rest of the base.)
September 2004
LNR unveils the Village Center Plan, a new master plan calling for 2,855 units of
housing and incorporating principles of “smart growth,” a term used by community
planners to describe developments that include a mix of residential and commercial
buildings near existing transportation and utilities.
June-July 2005
LNR’s Village Center Plan and zoning bylaws are approved at town meetings in
Abington and Rockland, and by the Weymouth Town Council.
December 2005
LNR files a Notice of Project Change with the state and is granted a waiver to allow
some construction prior to acquisition of the entire base from the Navy.
2006
Navy begins to indicate it will seek fair market value for the Weymouth base
instead of transferring it for free.
May 2006
LNR announces that it will call the redeveloped base SouthField.
November 2006
Construction begins at the base entrance on Route 18. Runway demolition follows.
Construction of 250 condos, 160 townhouses and 90 single-family homes does not
begin as expected.
March 2008
A deal calling for Tri-Town to pay the Navy $43 million for the rest of the air base
is reached. The dollar figure includes the cost of an extensive environmental
cleanup. Later in the year, Tri-Town fails to obtain money in the constricted bond
market to pay for the deal. It later begins a push in Congress to get the land for
free.
August 2008
The Legislature passes, and governor signs, a bill that extends Tri-Town’s life until
2053. The agency originally was to have dissolved in 2017, after full redevelopment
of the base.
June 2009
Frustrated by a lack of return on its infrastructure investments, LNR holds back on
annual payments to Tri-Town until the agency can demonstrate a “viable path
forward.” Tri-Town says it will stop operating without the money. An agreement for
payment in installments is reached.
 |  |  |
Weymouth’s SouthField project still stuck on the
runway
by Roland Hansen
runway
by Roland Hansen
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