The Riverside Neighborhood Liaison Committee sent an update to the community stating that the Riverside project is currently on hold. According to the report, “Over the last four months, increased construction costs (they have gone up by 25%) and rising interest rates have stalled the project. Once Mark Development has financing in place, it will be 9 months before they have a shovel in the ground. This means that there is no start date for the ledge blasting or Hotel Indigo demolition.”
The Liaison Committee also reported that residential units may be developed first, before any laboratory space, saying “it could take a couple of years for the market for lab to come back so Mark Development is exploring building the residential component of the project first,” even though they believe they have a great location and a strong partner in Alexandria Development.
With regard to the ground lease with the MBTA, the Liaison Committee reported that Mark Development is supposed to close by August 2023 and to do so it is required to pay the MBTA $25 million and have the project fully capitalized. Mark Development intends to ask for a two-year extension and needs one year at a minimum.
The Riverside Neighborhood Liaison Committee will next meet virtually (Zoom link) on December 13 at 8AM.
This delay is echoed in other developments. Earlier this month, Alexandria requested an extension until November 2024 to exercise the special permit granted to allow lab use at an adjoining site, 275 Grove Street, to manage construction costs and supply chain dynamics before commencing construction.
Likewise, at the October 6 Land Use Committee meeting, Councilor Downs asked about the status of the Dunstan East project. She said it is currently a construction site and asked when it is likely to be finished. Robert Korff, CEO of Mark Development, responded that they are in a pretty volatile construction market right now. He said they are “trying to nail down” and get a “guaranteed maximum price with a general contractor who is low enough to get a shovel in the ground.” He added that when their plans were approved and still in the Schematic Design phase, they were looking at a budget of about $105 million but are now fighting to get the numbers as low as they can, and they would be lucky to bring it in at $137 million. He added that this $32 million increase has all occurred within the last 12-18 months and that is why they are not seeing construction zooming ahead at this point. Councilor Downs sympathized but also brought up two concerns about having multiple sites in West Newton being developed all at once: the potential impact on West Newton Square’s commercial viability and the parking management plan during construction.
