BioMed, Cresset Sued For $22M Over Assembly Row Development Obligation
A New York-based firm claims in a new lawsuit that developers BioMed Realty and Cresset Development owe it $22M from a sale for a burgeoning commercial site in Somerville.
Somerville Office Associates, the former owner of 5-7 Middlesex Ave. near Somerville’s Assembly Row, is suing the developers for breach of contract in a complaint filed last week in Suffolk County Superior Court. The firm claims the developers are rejecting payout obligations from an earlier $65M purchase of the property.
The lawsuit was first reported by the Boston Business Journal. Attorneys with Bernkopf Goodman LLP representing Somerville Office Associates and representatives for BioMed and Cresset didn't immediately respond to requests for comment Thursday.
The property includes a 162K SF building at 5 Middlesex Ave. and multiple undeveloped parcels. SOA sold the parcels in two separate deals to Cresset in 2018 and 2019, and BioMed closed on a purchase of the site from Cresset in January for $163M. BioMed is planning a 1.2M SF office, lab, research and development, and retail project.
Cresset, in its purchase of the site, included a provision granting SOA $30 for every SF exceeding 500K SF in any future permitted development, the lawsuit claims. Earlier plans by Cresset included 806K SF of new commercial development, equating to a $9M payout, per the agreement.
New development plans submitted to the city by BioMed include 1.2M SF of new commercial development, amounting to an estimated $22M payout, according to the lawsuit.
BioMed and Cresset rejected SOA’s demand for the $22M payout in a May letter, SOA claims. The developers have yet to respond to the lawsuit, which was filed June 25.
