Baker wants to sell Hynes to help fund South Boston convention center expansion
Governor Charlie Baker has revived plans to expand the massive Boston Convention & Exhibition Center in South Boston and wants to help pay for it by selling the state-owned Hynes Convention Center in the Back Bay.
The governor’s move, endorsed by Convention Center Authority board members Monday, could have a dramatic impact on development in two already hot Boston neighborhoods. But it also could face a backlash from Back Bay hoteliers and others who depend on the visitors who attend shows at the Hynes.
Baker’s plan calls for a $500 million, slimmed-down version of a South Boston expansion approved by the Legislature in the last year of the Patrick administration. If the Hynes is no longer in the mix, the authority’s total exhibit, meeting room, and ballroom space in the city would actually shrink by 8 percent under Baker’s plan.
The authority’s executive director, David Gibbons, described the Hynes as a “black hole” for money during an executive committee meeting on Monday. He said it didn’t make sense for the authority to run two facilities that often compete with each other.
“It’s the only way we could have one great building instead of having two buildings that are compromised,” Gibbons said of the Baker administration’s plan.
“These two buildings, they steal from each other. . . . We’ve really robbed one pocket to pay the other all these years.”
Gibbons said he hopes work could start on the expansion in 2021, with completion in 2023, at the earliest.
The timing of the Hynes sale would depend on interest in the real estate market.
The executive committee approved the plan Monday afternoon; the full board will consider it Thursday.
Also part of the plan: returning 12 acres along Cypher Street, behind the South Boston convention center, to the City of Boston.
Paul Sacco, a board member who is also president of the Massachusetts Lodging Association, raised concerns about the potential impact on Back Bay hotels such as the Sheraton, Westin, and Marriott. All three are connected to the Hynes via the Prudential Center mall and adjoining passageways.
“We always knew the Hynes, especially with the building of the BCEC, that it was in jeopardy,” said Sacco, who abstained from Monday’s vote involving the Hynes sale. “[But] there was always that hope that it could stick around. . . . This is going to be terrible news to a lot of people.”
The Baker administration plans to file legislation that would authorize convention center officials to sell the Hynes center. The property straddles the Massachusetts Turnpike, but Gibbons said he is confident there is enough solid ground on either side of the decking that supports the Hynes to draw the interest of developers.
Baker controls 10 of the authority’s 13 board seats, with Mayor Martin J. Walsh controlling the other three.
Walsh issued a brief statement Monday, noting that the proposal presents a new opportunity to expand the South Boston site and to bring a significant piece of land back to city ownership. “I look forward to discussing this proposal with the Legislature and staying engaged through this process,” Walsh said.
The process was set in motion more than four years ago, after Baker halted a bigger, $1 billion proposed expansion of the South Boston facility. The state would have issued bonds for that project, to be repaid by the tourism taxes that currently feed a convention center fund.
Baker put the brakes on that plan soon after taking office in 2015, citing the expense and concerns about public subsidies. He then appointed a number of new board members and later brought on Gibbons as the executive director.
The original expansion plan would have added 1.3 million square feet to the 2.1-million-square-foot convention center, including the back-of-the-house space needed to support the exhibit and meeting areas. The new proposal calls for a nearly 500,000-square-foot addition.
The plans include a 100,800-square-foot exhibit hall as well as 44,100 square feet of meeting rooms and a second, 60,800-square-foot ballroom, for a total of nearly 206,000 square feet of “sellable space.”
The Baker administration says the much smaller Hynes, which opened in its current form in 1988, and the 15-year-old BCEC have taken divergent paths in terms of their finances.
The South Boston site had an estimated $3.6 million operating profit for the 2019 fiscal year, compared with a $250,000 loss at the Hynes. The Hynes, state officials said, has an antiquated layout over multiple floors and requires $200 million in capital maintenance over the next 10 years.
The main convention exhibit hall occupancy rate last year was 68 percent, above the industry average, compared with the below-average Hynes, at 44 percent.
Gibbons said selling the Hynes might not raise enough money for the full expansion, but the convention center fund could pay for the rest. By selling the Hynes, he said, the South Boston facility could be expanded without taking on new debt.
State officials said the 70-plus full-time employees at the Hynes would be offered jobs at the Boston Convention & Exhibition Center.
James Rooney, chief executive of the Greater Boston Chamber of Commerce, said he hopes Baker’s proposal sparks a “robust stakeholder conversation.” Rooney had been the previous expansion’s biggest cheerleader, as Gibbons’ predecessor leading the convention authority. He called the original plan a more ambitious approach.
In the early 2000s, Mitt Romney floated the idea of selling the Hynes property when he was governor. But defenders such as then-Mayor Tom Menino rushed to kill the idea, fearing a potential hit to businesses.
The Back Bay Association was among the groups that fought that sale plan. Its president, Meg Mainzer-Cohen, said it’s too early to know whether the association will take the same approach this time.
Mainzer-Cohen said she is optimistic a developer would keep meeting space as part of any project.
“For us, it’s critically important that we maintain a successful business environment, and the Hynes has been an important component of that,” she said.