Developer wants to switch downtown project from condos to a hotel

Rendering of proposed hotel

Architect's rendering showing five-story addition atop 15 Congress St.

A developer that bought into Related Beal's Congress Square project at Congress Street and Quaker Lane yesterday filed plans with the BPDA to change a proposed 35-unit condo building into a 116-room hotel.

Kai Zhao's Hemisphere Development Group bought 15 and 19 Congress St., two connected and currently vacant buildings last year. Under a previous BPDA approval, the company had permission to build a five-story addition atop the shorter of the two buildings and to create roughly 5,750 square feet of ground-floor retail/restaurant space.

If approved, Hemisphere would still build the addition but would reduce the ground-floor space to 3,100 square feet for a restaurant.

The proposed hotel would sit across Quaker Lane from a 190-room hotel the BPDA approved as part of Related Beal's overall Congress Square project.

The change from condos to hotel rooms would mean "negligible" changes in any impact to the surrounding area, Hemisphere says.

Hemisphere says its part of Congress Square will contribute to Related Beal's original concept of the now derelict Quaker Lane being transformed into "a pedestrian-friendly, European-style arcade, with cafes and outdoor seating."

The company hopes to begin work this fall, with completion in early 2021.

15-19 Congress St. notice of project change (7.5M PDF).

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Comments

Want to bet the AirBnB

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Want to bet the AirBnB regulation resulted in this change? The developer never intended for those condos to have permanent residents.

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Well

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Maybe the AirBNB regs mean the investors who would care are just not going to buy the condos at a sufficiently high markup?

Though as I said below in my comment, would the drop in demand really be enough to make the developer say "let's make one huge individual property that has to be sold as one instead of several properties that can be parceled out individually"?

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The new regs change the market

These units could have been income-producing units, but the new law changes that and therefore chages the marketability of the units.

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Too bad all these big money

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Too bad all these big money downtown developers couldn't help the MBTA. Or are they and the money went parts unknown?

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I've always loved that

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I've always loved that uniquely thin and old building. Too bad they want to put a big boring and mismatched square on top of it.

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I can haz phsyics?

How is adding to the height of the building in any way going to impact how thin it is?

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Internet

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Can you explain this "I can [etc]" internet meme that was popular awhile back? I spend a ton of time posting on the internet and I don't know this one. Maybe it will be funny or clever once it is explained....?

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lolcatz

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lolcats, very big ~5 years ago

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Common sense is not too

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Common sense is not too common. former BRA member works with me in our law office. I shared this with him snd he laughed. My comment has nothing to do with physics. It has to do with it being mismatched and unsightly.

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Crackpot Theory

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The new AirBNB regulations mean that condos aren't quite as lucrative any more (since now your investment condo or nominal pied a terre remains empty instead of bringing in short-term rental income), so now developers are going to just make hotels and the units are going to end up used the same way, just now it's official.

Problems with my theory: Is anyone really going to be scared enough of the enforcement of the AirBNB regs to change their behavior?
Is that behavior change really going to be to not buy investment condos at all instead of buying them and then engaging in "legitimate" long-term rental?
Is the lack of investors buying condos from the above really enough to induce developers to not build condos (that can be sold off piecemeal to dozens of investors) but instead build a hotel that has to be sold all at once (or held on to, or spun off into its own entity I guess)?

E:F,B

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International Buyers

It could have more to do with international buyers no longer scooping up downtown condos.

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counter-theory:

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if you keep abreast of real estate news, the top of the market in Boston has flatlined. the international high end buyers aren't inflating the top tier anymore and already built units are remaining empty on market, and that doesn't account for units in progress due to come on market soon. developers are left with two options:

actually decrease the prices of their "luxury" apartments to be affordable to the top 20% of the population instead of just the top 5%, taking a hit on profits but still making a tidy sum

not build housing and build something else they can sell for the same projected profit margin

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Did you hear that?

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Sounds like the bubble is about to burst!

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