The recession is over, let's spend money! Boston Development 2010

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JohnAKeith

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Is it too soon to forget all our past problems and to dream anew of the coming real estate boom?

Yeah, probably.

Anyway, feeling in an optimistic mood, I started thinking, "I wonder what will be built, first, in Boston."

Actually, I didn't just think it, I said it outloud, which kind of scared the people next to me in the subway car.

So, what do you think? Who will get out of the gate, first? What developments will never see the light of day?

Here are a couple quick thoughts of mine:

# Congress Street Garage - Raymond Company says they're holding off on plans to build, here. My guess is it's closer to a go than we might expect. Odds of construction by 2014: 2-1

# Chiofaro (Aquarium) Garage - The only thing holding this up appears to be permitting, as well as Hell freezing over. I'm guessing something will someday be approved, presumably around the same height as the Harbor Towers, next door. Odds: 2-1

# Kenmore (ne Fenway) Center - John Rosenthal is moving forward with his grand scheme to build a multi-unit, multi-use complex near Fenway Park. Odds: even money

# Columbus Center - Back to the drawing board. While a new developer could probably convince the state to let it use existing permits and renderings, there doesn't seem any way that this is possible. Perhaps having Kenmore Center start first will inspire a developer to try, here. Odds: 10-1

# Liberty Mutual - Once I've stopped the city from granting this development a $16-million property tax giveaway, this should move forward, smoothly. Odds: even money

# South Station Tower - never. DOA

# Belkin Tower - never. DOA

# Seaport Square - Can John Hynes pull off a hat-trick? He could if he had a third project, so the question is stupid. Put another way, will he actually build something here as well as at Filene's? I say, yes. Seaport Square is to be built in three phases. The first phase, an apartment / condo building, is easy. I'm assuming he's not starting on it because his lender, Morgan Stanley, doesn't want Phase I to be built then have the whole thing fall apart. So, they're waiting for the market to improve. Phase II is the huge under ground parking garage. This could be built without anything going on top of it, I assume. Phase III is all the above-ground construction. Odds: 3-1

# Watership Place - never. DOA

# Filene's - I wouldn't be surprised if this gets going within six months. Vornado is still bleeding money (it gave up on two projects in other states, in a recent SEC filing) but it still has the power and will to build, I believe. Odds: even money

# One Bromfield (apartment complex) - no idea. This is the building proposed for where the Wendy's is, now, in DTX. Odds: 5-1

Thoughts?
 
Likely the smaller projects already planned and funded through University endowments, such as the planned BU East Campus Center.
 
add to list:

Harvard Science Complex in Allston

Ferdinand's Building in Dudley Square (what is the status of this project, anyway?)

various developments along the Fenway part of Boylston St

various Longwood medical developments (and also MGH-Mass Eye & Ear area)

Albany Street hotel

Hayward Place

Prudential Center expansion

Kensington Place

Greenway ramp projects (YMCA, history museum, New Center for Arts & Culture)

Berklee College of Music expansion
 
I hope the Copley Place tower comes first. Man that one is sweet.
 
Why did Boston give Liberty Mutual 16 Million dollar tax break? Why not give that to all the projects?
 
A few other projects on hold or on ice...

-The rest of Fan Pier: I'd bet the odds are 2-1 that there's additional construction underway by 2012

-The redevelopment of the USPS facility near South Station: Looks like it is, sadly, not going to happen ... now. This land's too valuable to be useless forever. By 2015, I say even odds a new deal is struck

-The Nashua St. towers: Haven't heard much about these in a while. I say 2-1 odds we hear anything by 2012

-The new Copley high-rise: NIMBYs are out to kill this good-looking number. I say 5-1 odds it gets built in current form by 2015, 3-1 it gets built shorter, fatter, stubbier (Bostonier)

-The various landscrapers at Bulfinch Triangle: 2-1 they're u/c by 2012

-The Big Dig parcel near Haymarket: 5-1 odds anything decent is u/c by 2012; 3-1 odds an unfunded, lobotomized Museum of Boston History Since Menino Came to Office is u/c by then

-Constellation Center: I have a weird place in my heart for this, but it sounds totally cracked. DOA

-Northpoint: One of the great potential development spaces in the area. So sad. DOA

...Weren't there some other projects besides Seaport Sq., Fan Pier, Jimmy's/Liberty Place or whatever, and Wasterside Place down in the Seaport...?
 
JohnAKeith said:
# Congress Street Garage - Raymond Company says they're holding off on plans to build, here. My guess is it's closer to a go than we might expect. Odds of construction by 2014: 2-1
Click to expand...

didnt the owners drop raymond (and their amazing, amazing building plan) as the developers?
 
I don't believe the recesssion is over. If we were really on the road to a recovery then why wouldn't the Federal reserve start to raise interest rates. I think we might be heading off a cliff before we start to see New Construction for the next couple of years.

2010 thru 2013 will be known as the lost years.
 
South Station Tower still has a shot. Hines has DEEP pockets and the location can't be beat.
I think Seaport Sq holds off until Fan Pier is substantially built out (read: a decade or more).
 
I think pressure will grow for regulatory and process changes on the seaport to allow smaller-scale development. Let the developers with deep pockets invest in high-rise in-fill a la Copley tower and Congress Street Garage instead.
 
I like your thinking, Shepard. Fingers crossed.
 
Simple economics. The city benefits from all development, whether on the Seaport or with a Copley tower. You need deep pockets for only the scale of the in-fill towers, whereas small pockets might actually develop brownfields like the Seaport more effectively, more densely, and without the need for giveaways. That's how pressure will grow.
 
Dont forget about the christian science towers, they have a lot of money and also own the land already only problem is people not wanting to see change to their place of worship i bet something will be built but who knows what itll look like. The south station tower most likely has a better chance because its almost guarinteed to get people to buy because of the location, sadly though id bet money it gets built shorter if it gets built because of where it is and seeing that it has already been made shorter before.
 
I love the copley place tower. Had completely forgotten about that one.
 
Shepard said:
Simple economics. The city benefits from all development, whether on the Seaport or with a Copley tower. You need deep pockets for only the scale of the in-fill towers, whereas small pockets might actually develop brownfields like the Seaport more effectively, more densely, and without the need for giveaways. That's how pressure will grow.
Click to expand...

I agree. But as we all know, development in Boston isn't about simple economics. It's a highly rigged political game. In terms of getting the Seaport (or NorthPoint) developed as quickly, densely and intelligently as possible, it would make sense to divide up the land into small parcels and auction them off (possibly with the stipulation that combining parcels is not allowed). It would mean gradual but probably immediate construction resulting in a densely built area with a mix of uses and architecture, human scale, and it wouldn't hinge on $2.5 billion loans from nervous Wall Street banks. It would mean smaller, independent developers and more regular Joes (granted, fairly affluent ones) owning and building their own space as they please -- just as buildings were built in the more-successful pre-war urban areas (and as they continue to be in the suburbs, the places that continue to attract most educated/affluent Americans). Win-win, right?

The rub is that doing that would bypass the whole political kabuki theater that dominates Boston real estate development -- and in so doing would neuter Boss Menino and his gremlins at the BRA. Simple economics + Good for the city + Bad for the corrupt pols = Probably unlikely to happen
 
Shepard said:
I think pressure will grow for regulatory and process changes on the seaport to allow smaller-scale development.....

Simple economics. The city benefits from all development, whether on the Seaport or with a Copley tower. You need deep pockets for only the scale of the in-fill towers, whereas small pockets might actually develop brownfields like the Seaport more effectively, more densely, and without the need for giveaways. That's how pressure will grow.
Click to expand...

I think most on this board agree that smaller lot sizes, reasonable by-right building forms, and many smaller developers / projects would greatly improve the finished Seaport neighborhood. How do we encourage Hynes, et. al. to subdivide? Should the City assess a high tax per surface parking space in this district?

Might current owners consider subdividing if a new zoning overlay were put in place to encourage Fort-Point scale street walls and heights, small footprints, etc. (without BRA hoops)?

As ablarc has said, change the rules... but how do we do that? What is the carrot, where is the stick to do something besides just collect parking fees?
 
State, city want taxpayers to aid convention hotel
By Casey Ross
Globe Staff / May 7, 2010
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Sending your articleYour article has been sent. E-mail| Print| Reprints| Yahoo! Buzz| ShareThisText size ? + State and city leaders want to build a 1,000-room hotel next to the Boston Convention and Exhibition Center, a project that will cost up to $700 million and almost certainly require millions of dollars in subsidies and taxpayer-supported loans.

Discuss
COMMENTS (121)
Officials studying how to dramatically expand the convention center said another large hotel is necessary to attract the biggest events, and that building it without taxpayers? help would be nearly impossible.

The options are still being discussed, but officials said the project could involve a combination of tax breaks, public funds for road work and other upgrades, and hundreds of millions of dollars in debt that would be partly or entirely backed by taxpayers.

?If we stand back and do nothing, another hotel will not be built here for another 10 years,?? said James Rooney, executive director of the Massachusetts Convention Center Authority, which operates the center. ?Boston has shown that it can do well in this market, so the question is do we want to make the tough decisions to build this hotel and take advantage of our capacity???

When the convention center opened in 2004, the city and state increased taxes on things such as rental cars, tourist tours, and hotel rooms to help pay for construction of the $800 million South Boston facility. Officials say they will examine whether to raise those again as part of any expansion of the convention center.

A committee of 25 public officials and business leaders has highlighted the hotel as a critical component of such an expansion, which would be undertaken with the goal of making Boston one of the nation?s top five cities in the convention business.

A preliminary study has called for 400,000 square feet of additional exhibit space, a 5,000-seat auditorium, and a 75,000-square-foot ballroom. The hotel could open as early as 2015.

Boston officials say they recognize the demand for additional hotel rooms and the need to examine sources of public support.

?We have to find out how much help would be needed,?? said Kairos Shen, chief planner for the Boston Redevelopment Authority. ?But this is one area a large hotel can work because of the convention traffic and excess demand from the airport and downtown.??

The convention center?s business has grown steadily, with annual attendance at its events increasing to about 550,000 in 2008 from 200,000 in 2005.

In the last couple years, however, officials said it has lost dozens of large events because it does not have exhibit space or adjacent hotel rooms to accommodate gatherings of many thousands of people. And the big conventions that have come to Boston have faced logistical problems.

For example, attendees of a recent insurance convention were placed in 33 hotels across the city. The event required 8,000 hotel rooms, but the convention center has only 1,100 hotel rooms within walking distance. Most attendees had to be bused back and forth to their hotels, resulting in $300,000 in additional transportation costs.Continued...

Rooney said the shortage of hotel rooms was also cited by several convention organizers who decided not to come to Boston, including the American Society of Safety Engineers, which required 4,000 rooms, and the National Safety Council, which required 6,500.

While there appears to be demand, large convention hotels are difficult to build because high construction costs make it difficult to earn the 20 to 25 percent profits demanded by private investors. In most cases public money is used to help defray costs through tax breaks, funds for road work or other infrastructure, and other assistance.

In the last 10 years, only two hotels with more than 700 rooms have been built in the United States without public assistance, according to PiperJaffray, one of several consultants advising the convention center?s study committee. Both were in New York City.

In other parts of the country, large hotels are becoming increasingly reliant on public borrowing and subsidies. Since 1997, 15 hotels have been built with either publicly issued debt, direct funding to help with construction costs, or both. Among cities hosting those hotels are Chicago, Baltimore, San Diego, Tampa, St. Louis, and Phoenix.

It is becoming increasingly common for convention hotels to be 100 percent publicly financed. Officials in Dallas, for example, are building a 1,000-room hotel with $480 million in government-issued bonds that will be paid off through operations of the hotel. The state is also providing tax breaks for 10 years, and the city of Dallas is guaranteeing 100 percent of the debt. A similar financing structure was used in 2005 to build a 1,100-room convention center hotel in Denver.

The model works if the hotel succeeds, as it has in Denver. But if the hotel fails, it can leave taxpayers facing a huge bill. Some industry specialists warn that, with so many cities developing large hotels, demand is going to start to wane, making failures more likely.

Moreover, the US hotel market is already suffering in the down economy. Room rates in the Boston area are down 12 to 15 percent since 2007, and last week the W Hotel declared bankruptcy after just six months of operations. That breakdown came after the city of Boston had provided a $10.5 million loan to the W. Officials have said they secured enough collateral to protect against losses.

?The construction costs of these hotels is so high that it becomes difficult to make enough revenue to pay off the debt,?? said Michael Oshins, an associate professor at the Boston University School of Hospitality. ?So there is some risk.??

Oshins pointed out the W?s failure was largely due to the inability to sell condominiums that were supposed to help raise enough money to pay off its debt in the near term.

Rooney said a similar failure would not occur at the convention center hotel because it would be supported by a steady stream of event traffic. He acknowledged that many other cities are also building convention hotels, but said Boston has proved it can compete for business.

?There is a tremendous economic opportunity here,?? he said. ?We can be among the leading world cities for assemblies and conventions if we decide to build the infrastructure to support this business.??

Casey Ross can be reached at cross@globe.com.

? Copyright 2010 Globe Newspaper Company.

http://www.boston.com/business/arti...ant_taxpayers_to_aid_convention_hotel/?page=2
 
I'm actually disgusting with the city and state at this point. Am I the only person on this board that thinks this is a extremely bad idea. The city is cutting schools, libraries, holes in the city. This is absolute joke.
This is just about putting the Unions employees back to work right before NOV elections. This is our money.
 
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