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On Again, Off Again Filene's Project is Off Again

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This has been quite the saga in recent months.

In the summer, the project had stalled because of a lack of financing. Then in early October, it seemed the developers had a breakthrough. Today, however, it looks like the project is now on hold because it apparently doesn't have enough financing after all.

The $700 million redevelopment of the Filene's block in Downtown Crossing is being halted for at least 90 days because its developers have been unable to line up enough financing to continue with the highly anticipated project.

Developers John B. Hynes III and Vornado Realty Trust will immediately stop construction on the site and will instead try to cut costs after they came up more than $100 million short in their financing package. Hynes told Boston Mayor Thomas M. Menino about the postponement at a meeting Wednesday, according to city officials. The delay leaves a hole in the Downtown Crossing area, and in Menino's effort to revitalize the gritty shopping district.

Neither Hynes nor Vornado returned calls seeking comment.

Hynes and Vornado have been scrambling to secure financing, but banks have proved unwilling to lend to such a massive commercial project amid a global credit shortage and weakening US economy. The developers do have some funding in place through prior financial commitments.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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