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Historic Construction and Sale of State Street Financial Center- Boston
The recent construction and sale of the State Street Financial Center at One Lincoln Street in Downtown Boston is historic in several dimensions. The sale of the 36-story office tower for $705 million is the largest real estate deal in Massachusetts and the third largest in the nation. The development created by Venture partners -- Columbia Plaza Associates (CPA), the Gale Company, Morgan Stanley Real Estate Funds, and State Teachers Retirement System of Ohio has an even greater significance in U.S. history. It is the largest real estate project in America developed by minority investors.
Columbia Plaza is a Boston-based group of African-American, Chinese-American and Hispanic investors who were the original developers of the project. Their determination to form a minority investors group and build in the downtown business district dates back to 1986. The record setting sale culminates their eighteen-year personal odyssey to add a building to Boston's Financial District skyline. Paul Chan, leader of the 25-member Chinese Investment Group and Ken Guscott, leader of the Ruggles Bedford African-American investors' group are the co-chairs of CPA. Mr. Guscott is African American born of Jamaican immigrant parents.
"We are so proud to be a part of this historic deal," said Mr. Chan. "It was so important for us to contribute financial resources, design development input and community participation, especially in a building that is located at the gateway to Chinatown.”
Ken Guscott and his Ruggles Bedford African-American investors' group first conceived of the idea of building downtown. The individuals and owners of private businesses in this initial group include Boston's black-owned bank, One United (formerly Boston Bank of Commerce). Now that the sale of One Lincoln is complete, CPA can celebrate with all of its partners, including the Gale Company who was hired in 1999 to acquire additional equity investors and supervise construction, management and sale of the building.
John Hynes, a managing partner and principal of the Gale Company, attributes the success of the building project and sale to a tenacious group of real estate and financial professionals.
Mr. Guscott says all the original investors are committed to passing on some of the proceeds from the One Lincoln sale to their community. "Eighteen years ago when we first convinced the original twelve African-Americans investors to develop this building, we pledged to make a viable business deal that would strengthen minority communities in Boston." Prior to the sale, the project generated $16 million dollars in linkage and community development contributions to Chinatown and Roxbury, Boston's black community. In addition, CPA has pledged to share 10% of its net profits (more than $4 million) with nonprofit organizations. The funds will have an immediate positive impact on these cash strapped agencies.
Posted: May 2, 2004
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