An unlikely choice for shot at Fan Pier
Low-key, respected developer faces a Herculean challenge
By Chris Reidy, Boston Globe Staff | August 19, 2005
Anthony Athanas, the late legendary restaurateur, couldn't make Fan Pier happen when he was an owner of the site. Neither could millionaire developer Nicholas Pritzker of Hyatt Hotel fame, despite two decades of trying.
Next up: Joseph F. Fallon, a publicity-shy third-generation builder.
A partnership between Fallon Co. and Massachusetts Mutual Life Insurance Co. agreed this week to buy the 20.5-acre site on the South Boston Waterfront from the Pritzker family. Fallon and Cornerstone Real Estate Advisers LLC, a MassMutual subsidiary, negotiated the agreement for a reported $115 million.
The site has languished for decades, mostly as a parking lot, even though it's been approved for 3 million square feet of office, residences, hotel, and public space. Estimated development cost: $1.2 billion.
Fallon seems an unlikely catalyst for Fan Pier, suggested Vivien Li, executive director of the Boston Harbor Association. Last year, a team led by Lennar Corp., a Miami home builder, made a $125 million offer on the site, but failed to close the sale. A team led by well-known local developer Stephen R. Karp, who built many of the region's most prominent shopping malls, also walked away from Fan Pier.
''In a million years, would you pick him to pull this off?" Li said of Fallon. ''Everybody loves him. City Hall loves him. But he's got a lot on his plate. The question is, 'Can he deliver?' "
Fallon, who already has significant involvement in the South Boston Waterfront, said many of his projects are winding up. One is Park Lane Seaport, a high-rise complex of 465 housing units on Northern Avenue nearing completion a few blocks away from Fan Pier. Cornerstone is working with Fallon on that project. Fallon is also part of a team developing the nearby Westin Boston Waterfront, and he's part of another team recently tapped by the Massachusetts Port Authority to build warehouses at the Massport Marine Terminal in South Boston. Karp has put together a team to devise development plans for Pier 4, and Fallon is part of that too.
Fan Pier will be built in phases, Fallon said, and construction on a first building could begin in mid- to late 2006.
''We see the project coming to full maturity seven to 10 years" after that, he said.
Cornerstone president David Reilly said ''market conditions" will determine what's built first, and Fallon said it's likely to be residences or a hotel.
The Fan Pier bid happened quickly because both Fallon and Cornerstone are so familiar with the area.
''Joe contacted me two weeks ago," Reilly said. ''A lot of attorneys and engineers worked day and night to get our bid in."
Fallon recalled: ''We both said, 'Let's go after it.' We love the area."
When the other development teams backed out of deals, they paid penalties. Fallon wouldn't disclose the size of the penalty specified in his sales agreement.
''It's significant," Fallon said. ''We're not thinking about penalties; we're thinking about moving ahead."
Observers said the importance of Cornerstone as a partner should not be overlooked. Cornerstone has more than $6 billion in real estate assets under management.
''You have this financial institution with patient money," Karp said.
Fallon, 53, has three generations of construction in his blood. His father built several churches for the Archdiocese of Boston, and the family lived in Milton, where a neighbor was Thomas J. Flatley, a widely respected developer and head of Flatley Co. of Braintree. As a boy, Fallon often visited construction sites with Flatley or his father, and Flatley gave Fallon one of his first jobs.
''He was my mentor," Fallon said. ''I learned about construction from my father. I learned about development from Mr. Flatley."
''If you're a protege of Tom Flatley's, you're going to do well in life," Boston Mayor Thomas M. Menino said.
One of Fallon's jobs for Flatley was to win community support for Cape Cod shopping malls. ''Joe is trustworthy," Flatley said. ''He has tremendous credibility with the community."
Credibility has served Fallon well in South Boston, where politicians and community activists are very involved in development decisions. ''Joe's a class act," said state Representative Brian P. Wallace, a South Boston Democrat.
Lowell Richards, Massport's chief development officer, said of Fallon: ''Compared to other developers, he's very low-key. He's very patient. In the context of Fan Pier, patience will be a virtue."
Fan Pier has languished for so long that many seem to be rooting for Fallon and Cornerstone to make the project happen. Menino was so frustrated he threatened to take away the development approvals the Pritzkers had for the site. City Council president Michael Flaherty has said several times he would lobby to have it taken by eminent domain from the Pritzkers. ''The city is very anxious to get this built," said David I. Begelfer, head of the Massachusetts chapter of the National Association of Industrial and Office Properties. ''The Pritzkers wanted to make a choice that they were 100 percent assured would go forward. The Pritzkers don't need three strikes. They can't afford to have someone come in and not close."
Chris Reidy can be reached at email@example.com.