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New England Development says it proposes to build a 240 Boston condo residential building on an undeveloped bit of its Bunker Hill Mall, along Rutherford Avenue and bordered by Austin and West School streets.

In a “letter of intent” filed with the BPDA, the company says it will incorporate some units that would be smaller than normally allowed under Boston zoning in exchange for possibly reduced rents, as part of the city’s “compact living” pilot program.

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