No Dice Yet on Eastie Casino Surge

EAST BOSTON — With last week’s news that the townsfolk of Foxborough had effectively KO’d the Bob Kraft/Steve Wynn casino proposal, some may have speculated that Suffolk Downs would now have the inside track, and there would be a flurry of CRE activity in East Boston. Butbrokers familiar with East Boston and neighboring Chelsea and Revere report tepid response at best—not so much from a lack of interest as a lack of available parcels.

“We’ve seen nothing as of yet,” Burgess Properties President Philip Burgess tells The Real Reporter this week. “There may be a land play or some people circling some oil company parcels around Suffolk Downs, but there’s no tangible stuff going on at all.” Even so, he offers, “as soon as the (casino deal) gets awarded, the phones will start ringing.”

Colliers International principal Robert Cronin, who in January brokered the $3.75 million trade of a long-held parcel at 415 McClellan Hwy. to First Bristol Corp., reports there just isn’t much product on the market. “Most of the major pieces over there are pretty specialized in terms of uses they’re being put to, whether its tank farms or the big Necco (candy company) site or a storage facility. There are just very few available parcels of land.” But Cronin concurs with Burgess in predicting if the casino does end up at Suffolk Downs, CRE action will heat up. While he was in the three-year process of marketing the East Boston parcel, Cronin recalls that, “it seemed like whenever there was an article about the casino, buyers re-surfaced.”

Cronin adds that prior to the ultimate sale there were three types of suitors for the parcel: Airport-related uses like car rental companies or Park and Flys; retail; and hospitality or hotel. “The (Boston Redevelopment Authority) guys were pretty emphatic that they weren’t going to support airport related uses in the East Boston market,” Cronin recounts. “They wanted to find uses that would generate jobs and tax dollars for the city, so that was somewhat limiting.” There were also limits to the retail possibilities, as the big box players would be seeking 10 to 12 acres on which to build rather than the 6.2 acres the parcel he had listed offered. Unfortunately, he adds, smaller retail developers would have had trouble justifying the price tag for the land.

That left the hotel use, which satisfied all parties. “We were able to sell it at a price point that represented a terrific value for our client,” says Cronin, who portends that First Bristol will probably “end up doing a hotel with a couple of retail pads, a sit down restaurant and bank or something.” But while the pace is presently torpid, market watchers say that doesn’t mean there will remain select options for those seeking to get in on the action before any casino decisions are finalized. On the leasing side, Cushman & Wakefield broker Scott M. Gredler reports that he is seeing a “myriad” of suitors for a 15,000-sf flex building at 220 McClellan Hwy.. “We’re showing the space for office, retail and the traditional warehouse use and vehicle related uses,” he says. “It has been across the board.” The building is in shell condition, having gone through significant upgrades, including a new roof and a new municipal water and sewer hookup, “and it’s ready for lease,” Gredler says. According to one source, there’s an “airport related company that’s waiting on a contract” taking a very hard look at the building.

If the casino does get approved, there are possible options for developers, most prominently the Grossman Cos.’ portfolio of 230, 240, 290, 310, and 370 McClellan Hwy., currently leased to an assortment of mostly freight-forwarding companies. “As far as I know, we’ve not been approached by any outside sources to see if we had any interest in either selling or joint venturing,” relays Richard McKinnon, Director of Brokerage Services for The Grossman Cos. “Maybe they’re scouring other areas, but I think people are still trying to figure it all out and they’re going to have to work through the whole process.”

McKinnon frets that the increased traffic flow that a casino would bring could be a challenge to the narrow conduit between Bell Circle in Revere and Logan International Airport, but acknowledges that “it’s a terrific area to be in”—both literally and figuratively. “We’ve been longterm holders and I think we’ll continue to be long-term holders,” he says. “But if it’s a joint venture . . . we’re a real estate company, and we’d be willing to listen to that as well.”