[ARCHIVED] Harbor Garage Redevelopment | 70 East India Row | Waterfront | Downtown

[BostonYoureMyHome]

Re: The Boston Arch (Aquarium parking garage)

I think the BRA needs a reevaluation.

Real estate has been and always will be a business built on relationships. Unfortunately, sometimes those relationships can really fu@# things up.

 

[TheRifleman]

Re: The Boston Arch (Aquarium parking garage)

Another thing just occured to me. These city officials are saying well it's your fault you paid too much, all the while didn't they make a nice chunk of money on the taxes on that, wasn't that money used to benefit the city and now they are using that as an argument to use against him.

That quote actually bothered me in the article. So city officials are keeping tabs on how much private developers pay for a property. Then the BRA can either support the developerment or go against the development which could determine a developer to default on the property if not properly capitalized.

The BRA is on dangerous ground here. Does Chiofaro have any clout about filing development idea first before the city's Greenway Study was ever done? After the aquistion of the garage was done does the city have a right to change the zoning laws against the developer?

Besides the FAA Safety Regulations that this sight can only hold 400ft.

 

[AmericanFolkLegend]

Re: The Boston Arch (Aquarium parking garage)

However, Rowes Wharf is also a good example for the anti-tower side of the argument. It shows that you can build a very smart, dense, and well-regarded project along the waterfront without lots of height. (See also: Battery Wharf.)

Two fabulous examples Ron. But this site would be trickier to acheive that density without more height because you don't have enough waterfront access to put out some "finger wharves" into the Harbor (and I doubt you'd be able to build new wharfs that weren't grandfathered in anyway).

 

[HenryAlan]

Re: The Boston Arch (Aquarium parking garage)

Another thing just occured to me. These city officials are saying well it's your fault you paid too much, all the while didn't they make a nice chunk of money on the taxes on that, wasn't that money used to benefit the city and now they are using that as an argument to use against him.

That comment really angered me. What he paid might be too much within the context of the proposed zoning change. But it wasn't too much within the context of his planned use. Was the planned use already illegal? Then I suppose he did pay too much. But this reeks of a back handed approach to property taking by the city.

Then there's this gem:

?We think this is a public relations play to tarnish a thorough and thoughtful planning process in which we are working to protect important public assets along the Greenway and Boston Harbor,?? said Susan Elsbree, spokeswoman for the Boston Redevelopment Authority.

I wasn't aware that the view from the Harbor Towers was a public asset.

 

[mass88]

Re: The Boston Arch (Aquarium parking garage)

The BRA gives Liberty Mutual a 20 Million dollar tax break to build in the back bay and they won't let Chiofaro build an extra 200 or 300 Ft?

Looks like the concrete garage is a keeper. At this point the Greenway is going to $uck with BRA running the show.

I actually think Chiofaro got a good deal on the garage. Parking is the highest demand in they city and will always command high prices.

The nice garage looks great next to the baron waste that the Greenway has become.

 

[JohnAKeith]

Re: The Boston Arch (Aquarium parking garage)

* barren * ?

 

[stellarfun]

Re: The Boston Arch (Aquarium parking garage)

The hulking Harbor Garage, on a premier site near the Boston waterfront and New England Aquarium, is going on the market today and will likely be redeveloped into a mixed-use complex friendlier to the city's waterfront visitors.

The concrete garage, designed in '60s brutalist style by I.M. Pei, could bring $170 million or more, according to the broker, Cushman & Wakefield of Massachusetts Inc.

InterPark, the large national owner and operator of parking garages, is selling the 1,380-car structure as commercial real estate prices in Boston have hit astronomical levels. It is sometimes referred to as the Aquarium Garage.

"Developers have been calling us for years with ideas for this property," said Marshall Peck, InterPark chief executive. He said InterPark intends to remain the parking facilities operator there even with a new owner.

Donald J. Chiofaro, developer and co-owner of the nearby International Place towers, once called the site the "most exciting piece of real estate in the city of Boston." Chiofaro had an option to buy the garage that expired several months ago, and yesterday he vowed to bid on it again.

Chiofaro had offered InterPark $130 million in his earlier bid, based on his plan to develop a mixed-use complex of more than 1 million square feet. But he will have stiff competition this time, with bids expected to come in over the next month or so, according to Elizabeth C. Thomas, executive director of Cushman & Wakefield.

Local, national, and international investors have already gotten wind of the offering and are making inquiries, she said.

Rob Griffin, president of Cushman & Wakefield, called the property "the next Rowes Wharf," referring to the upscale condo, office, and hotel complex farther down the waterfront. "We really feel like it's going to be strongly sought after," he said.

Griffin noted that the garage, which comes with 30,000 square feet of retail space, will bring in millions of dollars in revenue to carry the purchase cost while a new owner goes through an expected two or three years of permitting for redevelopment of the site.

"You don't get any better situation," Griffin said.

Chiofaro's plan, which he shared with city officials about a year ago, was to raze the garage and build a 175-room hotel, 125 luxury condominiums, 800,000 square feet of office space, and retail space. The plan was for two buildings -- one 475 feet high, or 75 feet taller than the adjacent Harbor Towers buildings.

"The feedback we got was that it was too dense. Anything you build there, you're going to affect people's views," Chiofaro said yesterday.

Other complicating factors for the eventual buyer are that up to 400 of the parking spaces in the garage are leased to residents of Harbor Towers for about another decade, [I think the leases are, in effect, in perpetuity] and that the residential high-rises' heating and air-conditioning systems are located in the garage building. Both situations would require delicate coordination with Harbor Towers management and residents during several years of construction.

Dirigo Spice Corp., an importer and seller, occupied the 1.3-acre site and garage at 70 East India Row along Atlantic Avenue before 1966, when the Boston Redevelopment Authority urged the company to move to make way for the garage.

An investment fund controlled by Chicago real estate mogul Samuel Zell bought the garage in 1996 for $55 million. InterPark purchased the property in 2002 through a unit called Urban Growth Property Trust as part of a package deal of 11 garages nationwide for $180 million. Urban Growth has $20 billion in assets in 20 markets, according to its web site.

http://www.boston.com/business/articles/2007/06/19/harbor_garage_going_on_market/

So Chiofaro paid 3x what Zell paid for the same building about ten years prior, and I doubt the owners (Zell et al) made significant improvements to the structure during the 11 years they owned it. (The garage was built in 1971.) Gross square footage of the garage is 420,000 sq ft. So lets say Chiofaro paid $35 million for the 1.32 acres of land that he bought, and $120,000,000 for the garage; that's $300 a sq ft for a 38 year old garage that's probably deteriorated some being next to the sea.

As for financing, he is losing his shirt, IMO. Assume that he garages 1,000 cars a day at $20 per car, 365 days a year. (The other 400 spaces belong to Harbor Towers residents.) That produces gross revenue of about $7.3 million. Suppose the operating expenses of the garage (labor, maintenance, insurance, property taxes, utilities, management fees to Interpark) run $1.8 million a year. So $5.5 million in net revenue before (income) taxes. Chiofaro would not be paying income taxes on this property.

Assume the 'mortgage' is $150,000,000, for 20 years, at a fixed rate of 4.5 percent. That works out to a monthly payment of $948,974.06. Maybe Chiofaro can make the numbers work to his benefit, I can't.

_______________
Just to add for comparison. The Boston Common garage with 40 percent more spaces generated $11 million in gross receipts in 2008, operating at 90 percent capacity.

_______________
And to add perhaps a hint of urgency to Chiofaro's push on the city. His financial partner is Prudential. Prudential's recent activity in Washington DC:

March 17, 2010:
"Washington Harbour, a Georgetown gem along the Potomac River that garners priceless views, is up for sale.

Holliday Fenoglio Fowler LP is marketing the property at 3000 and 3050 K St. NW and just released a flyer about the for-sale property Tuesday night.

Prudential Real Estate Investors, the seller, bought the site in late 2004 for $220 million, according to D.C. tax assessment records. Prudential?s asking price is not known."

February 22, 2010:
"Mass Court, a 371-unit apartment complex in the East End, has traded to CB Richard Ellis Investors. Prudential Real Estate Investors, which acted on behalf of institutional investors, sold the property at 300 Massachusetts Ave. NW. The property sold for $105.5 million."

Earlier:
"Prudential Real Estate Investors has shed several local properties [in Metropolitan Washington] over the past year, including the sale of its 390,000-square-foot shopping center in Anne Arundel County to JBG Rosenfeld Retail and two office buildings totaling 240,475 square feet, known as the Georgetown North Campus, to a public real estate investment trust."

 

[itchy]

Re: The Boston Arch (Aquarium parking garage)

So ... is the consensus that the new Luddite rules proposed to keep buildings along the Rose Kennedy Backyard to the height of a 7-11 or gas station with an apartment on top (a la Haverhill) are an ad hominem reaction to Chiofaro's game of chicken? It's like the Star Chamber, only less historic.

My hat's off to Chiofaro, in any event. I hope he pulls a Howard Roark on the garage and allows the exploded shell to sit as empty as Filene's.

 

[stellarfun]

Re: The Boston Arch (Aquarium parking garage)

So ... is the consensus that the new Luddite rules proposed to keep buildings along the Rose Kennedy Backyard to the height of a 7-11 or gas station with an apartment on top (a la Haverhill) are an ad hominem reaction to Chiofaro's game of chicken? It's like the Star Chamber, only less historic.

My hat's off to Chiofaro, in any event. I hope he pulls a Howard Roark on the garage and allows the exploded shell to sit as empty as Filene's.

As Chiofaro was bailed out of bankruptcy on International Place by Prudential, a more likely result than the above, will be he is booted out of the garage and International Place by Prudential.

Monday, May 10, 2004
Chiofaro's company files for Ch. 11

Boston Business Journal

Donald Chiofaro, developer of International Place, has filed for Chapter 11 protection on behalf of his firm in a move to protect the premier Financial District towers from mortgage-holder Tishman Speyer Properties.

The parties have reportedly been at odds since the New York development company took over the $595 million mortgage from the Teachers Insurance and Annuity Association of America which Tishman said it became the owner of the mortgage "only because TIAA, after dealing with Don Chiofaro for fifteen years, decided to sell the mortgage."

In a press release the Fort Hill Square Partnerships filed for Chapter 11 proceedings to "protect their signature financial district property from the anticipated actions of a predatory out-out-state party that seeks to take control of the property and reap for themselves the benefits of its extraordinary location on the soon-to-be Rose Kennedy Greenway."

Tishman Speyer released a statement on Friday evening stated it had reached out to Chiofaro after assuming the mortgage from TIAA when "it became apparent he was unable to meet his mortgage obligations."

During a meeting April 18, Tishman Speyer proposed to pay Chiofaro $1.5 million per year for 10 years and allow Chiofaro to maintain an equity interest in the property, maintain his name on the property and management position as well as serve as chairman of the property's advisory committee.

Tishman also proposed Chiofaro could maintain his office on the top floor of International Place.

Tishman said it allowed Chiofaro to postpone his May 1 mortgage payment of $2.5 million until May 7 in exchange for good faith negotiations.

According to the Tishman statement, Chiofaro did not respond to the offer choosing instead to file in bankruptcy court.

The partnerships owning One and Two International Place filed for Chapter 11 in the United States Bankruptcy Court in Boston on Friday. Operation and management of International Place will not be affected by the filing.

The move is designed to protect the partnerships ownership and ensure continued management.

The partnerships referred to legally as the Fort Hill Square Associates are owned by affiliates of The Chiofaro Co. and The Hillman Co. The partnerships have made more than 200 payments totaling $640 million in the last 17 years without default and never missed a payment according to the statement released Friday. Neither The Chiofaro Co. nor the Hillman Company are part of the bankruptcy filing.

Since taking over the mortgage Tishman has worked to oust Chiofaro from his management and ownership of International place, according to the statement.

"The circumstances dictated the response" said Chiofaro, president of the Chiofaro Co. "The New York crowd is a gang of pirates. They have the history, track record, and stated intent to confiscate what's ours. They take no prisoners, they give no quarter. Chapter 11 is designed to protect against this type of offensive action. We understand their tactics, we expected their response, we're not intimidated by their money or reputation, and if a fight breaks out we'll show up. International Place will continue to be the premiere office address in Boston and the interlopers will be sent back to Gotham where they belong."

In a statement, Tishman said Chiofaro has not responded to negotiations.
"Tishman Speyer has afforded every courtesy and opportunity for compromise to Mr. Chiofaro. It is regrettable that Mr. Chiofaro has chosen not to reciprocate."

http://boston.bizjournals.com/boston/stories/2004/05/03/daily55.html

 

[stellarfun]

Re: The Boston Arch (Aquarium parking garage)

Mayor Menino spurns Don Chiofaro?s $50M offer for taller tower
By Thomas Grillo
Friday, March 19, 2010

The mayor has rejected an unrestricted offer of $50 million from a private developer looking to build a waterfront skyscraper at the Harbor Garage site along the Rose Fitzgerald Kennedy Greenway.

?This is not about money,? said Mayor Thomas M. Menino yesterday. ?It?s about planning our city and the people?s right to see Boston Harbor.?

Despite a looming budget deficit that could lead to school closings, Menino said he?s not interested in the money developer Donald Chiofaro has pledged to pay the city.

In a letter to Menino this week, Chiofaro said the $50 million would be in addition to a required $13 million in linkage fees.

The Chiofaro Co. wants to replace the Harbor Garage with a 1.5-million-square-foot development that would include a 40-story office tower and a 59-story condominium and hotel skyscraper along the Greenway near the New England Aquarium. Chiofaro said yesterday his company is willing to negotiate and make concessions as long as the final project is economically feasible, but the mayor has refused to deal with him.

?This is a $1 billion project that creates 5,000 jobs and produces over $300 million in tax benefits and doesn?t ask for one penny of public subsidy or tax incentives,? Chiofaro told the Herald. ?We?re offering the mayor this additional money to use at his discretion, and in exchange we need guidelines to make this project economically viable.?

Even though private development in the city has virtually ground to a halt and unemployment remains high, Menino was not swayed by the argument. ?The idea behind the Rose Kennedy Greenway is to connect the downtown with the waterfront,? he said. ?To have a barrier there for private gain doesn?t work for me.?

Menino?s comments come as the Boston Redevelopment Authority is set to issue zoning guidelines that would limit building height at the Harbor Garage site to 200 feet or 16 stories. Kairos Shen, the BRA?s planning director, said the modest height is essential to maintain sunlight on the Greenway. ?We don?t think that building a development of the size and scale by Chiofaro is in the long-term good,? he said.

Shen said that Rowes Wharf, which features the 16-story Boston Harbor Hotel, is an example of the kind of project that would work at the Harbor Garage.

But Theodore Oatis, a Chiofaro partner, said the comparison to Rowes Wharf, is absurd. He said the city owned the decaying five-acre parcel in the 1980s and sold it to a developer at the right price to make the numbers work.

?It?s an utter and complete curveball to suggest that the two are comparable,? he said. ?Our garage nets $8.5 million annually. It makes no sense to burn a cash stream that?s growing unless when you?re finished you have something that?s worth all the development costs plus more than what?s there today.?

http://www.bostonherald.com/busines...m_offer_for_taller_tower/srvc=home&position=5

As to the asserted $8.5 million net on the garage, that amount is exclusive of payments on the financing.

 

[TheRifleman]

Re: The Boston Arch (Aquarium parking garage)

Prudential & Chiofaro have more at stake than the city does. They own IP across the street. They want the Greenway to work and the only way it will is PRIVATE funds. The state can't even fund the projects on the greenway anymore because they are broke. I think this development was well thought out.

Menino & BRA are joke.

 

[Shepard]

Re: The Boston Arch (Aquarium parking garage)

Does the public really see "empty greenway > $50 million towards schools, libraries, etc" ?

This more than anything reveals the emperor has no clothes. Or at least, the emperor has no priorities.

Of course it's not about the money. Free money gets thrown at Liberty Mutual, and when free money is thrown at the city, Menino scoffs. It therefore can't be about the money.

What's it about?

 

[GW2500]

Re: The Boston Arch (Aquarium parking garage)

Hey Boss do they people have a right to an education? Chirafo's plan will improve that parcels access to the water. And you know what the truely sad thing is, that Menino turning down $50 million dollars is in the end only going to hurt places like Roxbury. Schools that already are underfunded. The front page of todays paper should read, "Despite education diminishing budget cuts looming, Menino turns down $50 million."

 

[palindrome]

Re: The Boston Arch (Aquarium parking garage)

Are you fvcking kidding me? We are closing half the libraries over $3.6M, and Chifaro is offering a $50m payment upfront, not to mention all the construction jobs and property tax. The mayor won't accept it because his fucking ego. I am calling his office today.

This makes me want to puke.

This city deserves to lose its libraries and have 3rd world schools.


Between this and the Columbus Center i would just stay far far away from Boston if i was a developer.

 

[GW2500]

Re: The Boston Arch (Aquarium parking garage)

moved to RKG thread

 

[erikyow]

Re: The Boston Arch (Aquarium parking garage)

I really want to scream if I hear the following two arguments one more time:

- Restricting views of the water. At the ground level, you already don't HAVE a view of the water. Wanna know why? Because there's a freakin' HUGE garage sitting there! As for the people who work in the hi-rises behind, they're so far back they'll lose maybe 10% of their view, one which they never owned in the first place.

- Comparisons with Rowes Wharf. This plot of land is like a third the size of Rowes Wharf. It is impossible to recreate Rowes Wharf on this plot of land. Even if you were able to do it square foot for square foot, say the garage is 1/3 the size and Rowes Wharf. Given the design of the building, let's say that the average floor count on Rowes Wharf is 12 storeys (some is about 15, other parts 10). If you're going to triple that to get the same square footage, you'll still need a tower that's roughly 35-40 storeys. Furthermore, Rowes Wharf has the advantage of taking advantage of a unique geographic layout with the existing piers they were able to build on. This garage is hemmed in on three sides by streets and on the fourth by a pedestrian plaza and the water. There is no way to build a truly comparable project on this area of land unless you tear down or somehow incorporate the building next to it whose name, despite having walked past it countless times, I forget.

I, too, am writing Menino's office. I do believe that once upon a time Menino was good for the city. Today, he's nothing but a megalomaniacal tyrant running his little fiefdom as he sees fit, the good of the city be damned!

 

[itchy]

Re: The Boston Arch (Aquarium parking garage)

This more than anything reveals the emperor has no clothes. Or at least, the emperor has no priorities.

......

What's it about?

This is crude, but my intuition says it's about whether Menino can show that he has a male member as voluminous as his male breasts.

He's a half-witted party boss more like "Honey Fitz" and the small-time city pols from that era. All he wants to do is assert his, uh, girth, metaphorically speaking. You're right that he has no priorities. Like Kennan's description of the Soviet hierarchy, his sole goal is to maintain power over his little fiefdom -- even if it means starving that fiefdom of funds and turning it into a second-rate city. It's all a pissing contest, and Chiofaro is offering to flood the urinal. (Terrible analogies, all of them, and mixed at that.)

 

[itchy]

Re: The Boston Arch (Aquarium parking garage)

... he's nothing but a megalomaniacal tyrant running his little fiefdom as he sees fit, the good of the city be damned!

Jinx!

 

[KentXie]

Re: The Boston Arch (Aquarium parking garage)

Remember his proposal for a 1000ft tower that would have casted shadows over the Common. What happen to that? Did he just do a complete 180 degree turn and now say that no shadows are allowed on parks? What a hypocrite.

 

[stellarfun]

Re: The Boston Arch (Aquarium parking garage)

Chiofaro doesn't have $50 million.

He was in default on the 'mortgage' on International Place. If you read the bankruptcy filing report above, Chiofaro claims neither Chiofaro Co. or Hillman were ever late on a payment. True, perhaps. But neirther Chiofaro Co nor Hillman were the owners of International Place, Fort Hill Square Partnerships, a separate entity was, and it was Fort Hill Square Partnerships that filed for bankruptcy.

From the Boston Globe, March 14, 2007:

As it turns out, February was a bleak month for International Place developer Don Chiofaro. Not only is he losing his biggest tenant, the Boston law firm Ropes & Gray, which will be moving to the Prudential Center in 2010, he also lost an expensive tax abatement case to the City of Boston. The Massachusetts Appellate Tax Board ruled down the line for the city and against Chiofaro, who began the case -- reported here in June -- looking for a $5 million tax refund. "It came out the way it came out. Period. End of conversation," said Chiofaro, who is reserving his right to appeal until he sees the final decision. City assessor Ronald Rakow said the case will establish a precedent for other office towers with pending appeals challenging the valuations of their buildings.

Fort Hill Square II (High St.; Assesors maps arent working)
Assessed value for 2007: $61,844,000
Gross Tax for 2010 $2,069,000

Fort Hill Square 2 (Purchase St.)
Assessed value for 2007: $210,838,000
Gross Tax for 2010 $7,054,000

Fort Hill Square I (55 Purchase St.)
Assessed value for 2007: $385,170,000
Gross Tax for 2010 $12,907,000

So roughly, Chiofaro was claiming in 2007 that International Square's assessed values should have been about 25 percent lower.

Ropes and Gray occupies 350,000 sq ft at International Place.

(Boston, July 17, 2007) ? Ropes & Gray LLP is pleased to announce that it has reached an agreement with Boston Properties under which the firm will relocate its Boston office to the Prudential Tower in 2010. Under the lease,Ropes & Gray will occupy more than 400,000 square feet of office space in the top floors of the Prudential Tower, which is owned and managed by Boston Properties. The lease terms will not be disclosed.

http://www.ropesgray.com/prudentialmove/