National Development clears many complex hurdles to develop Station Landing

Continually at the forefront of market trends and a recognized leader in the real estate community, National Development is a full-service real estate company providing construction, asset management, development, and investment acquisition services throughout New England.  Since 1983, the Newton-based company, which manages more than 6 million square feet of assets and is one of the region’s most active developers, has developed more than 12 million square feet of property in 40 communities. 

In 2002, National Development brought its entrepreneurial vision and creativity to the Station Landing project, a mixed-use development on the site of the former Mystic Center in the City of Medford, Massachusetts. Mystic Center was a failed office park. Only one office building and a garage had been completed prior to its acquisition by the project lender, Deutsche Bank, in a deed-in-lieu of foreclosure transaction in 2000.  Deutsche Bank wanted to sell the non-performing asset before the end of 2002. 

National Development envisioned a mixed-use project that would require a complete re-zoning of the land, and struck a deal with Deutsche Bank that contemplated a six-week due diligence period and an expedited closing in mid-December. While there was insufficient time to complete the complicated re-zoning process by then, National Development’s goals were to determine the likelihood that it would later succeed, and to analyze, quantify and reduce the transaction’s other restrictions and risks before deciding whether to finalize the purchase. 

After negotiating the purchase and sale agreement that set up the framework for the transaction, during the condensed six-week due diligence period that followed Nutter reviewed the complex set of factors affecting National Development’s decision whether to proceed with the acquisition. These included:

• Permitting requirements for a new mixed-use project
• Obligations imposed on the project owner by extensive existing permits
• Zoning changes required for the new mixed-use project
• The terms, conditions and obligations under the existing garage financing that would remain
• The terms, conditions and obligations under a ground lease and fee mortgage put in place to allow the original developer of the project to retain legal title to one of the parcels while providing the ground lessee with the ability to develop the parcel
• Issues in a pending lawsuit involving a lease dispute
• Results of the environmental reports
• The title and survey issues relating to the site’s multiple parcels of registered land

Nutter also worked closely with National Development to start the process of enacting new zoning, negotiating amendments to the mitigation agreements and existing permits, negotiating environmental insurance coverage, negotiating the purchase money financing documents with Deutsche Bank, negotiating the assumption of the existing bond financing relating to the garage, obtaining the necessary consents, amendments to leases, and estoppel certificates from various tenants and the existing garage lenders, and negotiating a complicated settlement of the lawsuit relating to the lease dispute. 

When National Development decided to take the re-zoning risk and move forward with the project, Nutter negotiated the terms of the equity investment in the new entity created for National Development to acquire the project, negotiated a mezzanine loan from a real estate investment fund, participated in the negotiations of three separate intercreditor agreements between the three sets of lenders, and completed all the closing documentation and requirements prior to the December closing deadline.

Nutter then assisted National Development in successfully obtaining the permits for the new mixed-use project, including drafting and achieving unanimous passage of new mixed-use zoning by the Medford City Council, a MEPA Notice of Project Change, and changes to mitigation agreements and curb cut permits with the Department of Conservation and Recreation. 

Today, Station Landing is a transit-oriented waterfront development being built on a 16-acre site on the Mystic River at Wellington Circle.  When completed, the development will include 650 residential units, 100,000 square feet of retail space, a 190-room hotel, 165,000 square feet of Class A office space, and a 1,350-space parking garage, adjacent to a riverfront park and marina. The project is one of the first mixed-use projects in the state to combine smart growth, new urbanism and transit-oriented planning with cutting edge urban design. 

In addition to the land use issues involved in successfully bringing Station Landing to fruition, Nutter effectuated the numerous financial transactions necessary to conclude the project to date. These financings allowed early repayment of the purchase money financing originally provided by Deutsche Bank, and joint venture transactions with a major life insurance company have provided new equity investments for the project. 

Click for a description of our expertise in Land Use, Permitting and Development, Real Estate and Finance, Environmental Law.