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In a surprise move, Harvard bid $75 million yesterday for a large piece of land in Allston in which it had previously shown little interest.
The land, which is bisected by the Massachusetts Turnpike, sprawls across 91-acres covered with concrete and railroad tracks.
Called Allston Landing South, the property is currently owned by the Massachusetts Turnpike Authority.
Bids for the property, located just south of Harvard Business School and lying adjacent to Harvard’s other holdings in Allston, closed at noon yesterday, though the parcel went up for sale on Janurary 27.
Harvard bid only $75 million for the property—half as much as it paid for Allston Landing North, although this parcel is almost twice as large.
But this land is severely encumbered by the turnpike and rail lines owned by CSX, which possesses rights to use the land in perpetuity.
Harvard planners did not reach a final decision about size of the bid until yesterday morning—right before the bid was due at noon, according to Harvard Vice President for Administration Sally H. Zeckhauser.
“It was a very hard decision,” Zeckhauser said. “We considered many factors, including the reservation price as well as what the competition might be, in coming up with our number.”
No other universities—including expected bidding rival Boston University (B.U.), which is located adjacent to the property—put in a bid.
B.U. spokesperson Kevin Carleton said that B.U. chose not to put in a bid because of other ongoing projects including $600 million of construction in the pipeline, the renovation of a new law school, three student residence halls, and a computer science building.
“We have identified that there could be future development in the area, but we are not focused on it right now,” Carleton said.
And although Zeckhauser said she heard rumors that B.U. was not bidding, she said that B.U.’s status did “not affect Harvard’s pricing at all.”
The parcel was valued at $100 to $125 million nearly two years ago, but a story in the Boston Globe said that internal Turnpike authority papers estimated that Harvard would need to pay up to $150 million to win the property.
“We thought that people may look to our North Allston Landing price and compare it to this parcel, and wonder,” Zeckhauser said. “But this parcel is much more encumbered, and the economy is of course very different now than when we bought North Allston.”
“We knew all along that we were going to bid on something,” Zeckhauser said.
But Harvard officials said they were not particularly interested in the property as recently as a few weeks ago. Harvard planners previously said they were hesistant to put in a bid for the property because they were concerned about the property’s encumbered nature and a possible bidding war with B.U.
“Any encumbrance affects how Harvard would think of a piece of land,” Zeckhauser said in late January. “Given its location, the land probably has less interest for us than it does to B.U.”
Less than a month ago, Zeckhauser added that although the University had surveyed the property, the “the land was not in Harvard’s primary interest,” noting that although the land was “far too severely encumbered.”
The parcel is the largest to date to come up on the market in Allston and is almost twice as large as the 47-acre Allston Landing North property, which Harvard bought from the Turnpike for $151 million three years ago.
Harvard has purchased similarly encumbered parcels in the past. The University already owns 300 acres of land across the river that is crowded with aging autobody shops and run-down apartment buildings.
Zeckhauser said yesterday that the University has a long-term interest in the new property.
“Although we are focused on the Allston Campus north of Allston Street, where a collaborative planning process is already underway, we always plan for the future, so we think it is wise to respond to the Turnpike’s interest in selling the land.”
One other group, but not a university, has placed a bid on the property, according to Zeckhauser.
But she reports that “Harvard is hopeful and optimistic” that its bid will win.
The Turnpike Authority will vote to issue the land to the “highest responsible bidder”—essentially the highest bidder who can prove financial credibility—this Friday.
While the parcel is already filled with CSX railyards and commercial properties, it may be an important part of Harvard’s planning puzzle for Allston.
“At first blush, the property was not that appealing because it’s already so filled up,” Zeckhauser said, “But then we started thinking, what happens after North Allston? We started thinking about the long-term, and we felt that over time, these encumbrances would resolve themselves.”
—Staff writer Lauren A.E. Schuker can be reached at email@example.com
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