Time bought on Coliseum site

Real Estate Weekly, March 23, 1994 by Lois Weiss

Designated Coliseum Center developer Boston Properties officially has until mid-June to negotiate with the city to complete its deal to redevelop the site.

While New York State Supreme Court Justice Ira Gammerman did not grant a requested Temporary Restraining Order against the city. and the Metropolitan Transportation Authority, he did agree to wait until April 12 to rule on other issues, including a preliminary restraining order, and additionally, bound the city to honor a second 90-day time period in the contract of sale.

Those present-at the hearing that took place on March 11th, said Judge Gammerman pointed to a clause in the contract that gave Boston Properties another 90-days to adjourn the closing. This time would start once the initial 90-day closing period had run out, which was March 14.

An MTA spokesperson said the judge, "advised them to read their own contract." While Boston Properties attorneys were aware of the clause, they expressed concern the city would issue a default notice that Monday if they tried to use their rights under the contract. They were also concerned the city might make an unlawful drawdown of the $33.8 million letter of credit, now on deposit. Judge Gammerman obtained an agreement from the city attorney not to issue such a default notice.

A spokesperson for Boston Properties said they merely affirmed a right that was in the original purchase contract in order to finish working out a new deal. "That's what we're trying to do," he added. "We're committed to redeveloping the Coliseum site."

Sources said provisions still under negotiation include the interest rates on the Industrial Development Agency bonds, garage repairs and the division of the property into condominium lots.

In other Coliseum developments, at least two other developers have stepped forward with proposals to oust Zuckerman from the site. The Related Cos. has submitted a proposal to pay nearly twice Zuckerman's latest bid of $62 million for the site to create an indoor shopping mall.

"It doesn't make any sense anymore to put an office building there," said Steve Ross, chairman of The Related Cos., who would not comment on the amount of his company's offer. He did say Related was willing to lease the site from the MTA.

Another developer, Bruce Ratner, has reportedly proposed a mixed use for the site, which would not require tearing down the Coliseum. While Ratner was not available for comment, sources say he too was offering a purchase price in the $100 million range.

At least one member of the MTA Board, developer and philanthropist David S. Mack, is getting impatient with the Coliseum delays. "In my view, we must immediately move to draw the $33.8 million letter of credit and reopen the bidding process," wrote Mack to MTA Chairman Peter Stangl on March 11, claiming that Zuckerman's delays are depriving the MTA of funds that are "desperately needed to implement critical mass transit improvements."