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

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Re: The Boston Arch (Aquarium parking garage)

TheRifleman said:
The garage site is probably cash flow positive which puts Chiofaro and PRU in a win/win situation. Chiofaro is right when he says this is the best location in the city for a development. The foot traffic alone in this area generates substantial amount of people during the day. Chiofaro would not have a problem with finding Tenants in this location.

Chiofaro paid 155 Million for the garage. He could probably sell the 1400parking spots in 99leases per spot for a minimum of 115K. Do the math that is a 160 Million alone not including the retail level. Parking spots are scarce and priceless in the city of Boston. One parking spot just sold in the backbay for $315,000.

I think the key to the location is the Water, The Greenway, The Aquarium, The T, and 5 Min walk to Downtown. 155Million was CHEAP.

This garage was worth every penny. I wish I had the money.
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He can't sell all the spaces because the residents of Harbor Towers have covenant rights to 600 of them for years to come.

Why would anyone pay $115,000 for a space when they can park daily in the same space for a lot less? Spaces sell in Boston for a lot of money when there are NO parking alternatives nearby, and you buy the space as a deeded transaction, not 'rent' it for a period of years. If monthly parking at Don's garage or a nearby garage costs $500 a month, or $6,000 a year, that means after parking at your 'purchased' space for 20+ years, you start to come out ahead financially. And of course, there are the monthly parking 'condo' fees to maintain and operate the garage. But let's not worry about those.

Anyway, Don better get cracking on selling those spaces. He has a really big balloon payment due on his garage purchase in a couple of years.
 
Re: The Boston Arch (Aquarium parking garage)

^^
Rifleman, there are condo spaces currently available at Folio, right across the street from the garage, for $75,000 and there have been no takers for a long time if you look at the days-on-market...and that's just 2 or 3 spaces. Good luck trying to sell 1,400 spaces at a 50% higher price. Nice try though. And if the garage is "worth every penny" just as a garage, why would Pru be so hell-bent on tearing down a perfectly good cash-flowing asset?
 
Re: The Boston Arch (Aquarium parking garage)

KentXie said:
You haven't even given Chiofaro a chance. Read what I wrote before. All of it will be on speculation until Menino and Chiofaro starts to work something out. Again, why would ANY tenants line themselves up on a development, which dimension is still being hammered out. Tenants will not make a promise with the developer UNLESS they know that the building is large enough to accomodate them, or if the developer even have a chance to be developed, which at this moment seems very unlikely with the mayor refusing to discuss.
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Stop with the giving him a chance.

Below is a link to the BRA scoping document -- 60 pdf pages -- that the BRA sent Chiofaro 15 months ago. The document specifies the additional information that he is to provide on his proposed building (the document acknowledges that zoning relief would need to be granted) as well as requiring him to develop alternatives that presumably would demonstrate that constructing a building conforming to existing zoning is not viable economically. (Chiofaro knew what the zoning was for the site when he bought it, and it is even more limiting than the shadow guidelines. Caveat emptor.)

So 15 months later, he has now produced a nebulous massing model. That's it. He has made no attempt to respond, even in part, to any of the provisions in the scoping document. He has done a lot of p.r., he has raced around the media circuit with great pronouncements claiming this and that, but he has yet to produce one iota of hard information that could be read and assessed in the cold light of day.

What is there to talk about? Chiofaro refuses to study alternatives, or even price them in a rudimentary way to show that he needs 1.5 million sq ft, or 1.2 million sq ft, or x number of sq ft to make this project financially viable. Why is that? Why shouldn't Menino simply take Chiofaro's declaration that he needs 1.5 million sq ft as gospel, and let him proceed?

http://www.northendwaterfront.com/storage/post-documents/20090721HarborGarageBRAScoping.pdf
 
Re: The Boston Arch (Aquarium parking garage)

greenwayguy1982 said:
^^KentXie, it's time for a lesson in real estate economics, 2010-style. The way that Don could build at 200 feet is if his partner Prudential agrees to do what the majority of other institutional investors in the good ol' US of A have done in the past 24 months and take an impairment on their asset - if they are so hell-bent on developing this site, they could mark its value to market and lower their basis by 50% in one fell swoop. Also, if they get fed up and just sell the garage, its market value as a development site would absolutely be impacted by the 2+ years of BS that have now transpired around this development - you think any other developer in his/her right mind would pay *more* for the site as a development site after seeing what Prudential went through? Not a chance. Would they pay less for the site and propose something consistent with zoning and Chapter 91, you bet - that's the best hope for this site, another Rowes Wharf, with a land cost to match. Time alone will tell.
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Greenwayguy, here's a lesson on Economic Game Theory. Right now Don is given three choices, to develop something feasible and accrue enough revenue to cover the cost, to do nothing and accrue revenue from the garage to cover his payment, or sell the garage at a cheaper value and accrue negative profit. Since Don cannot move before Menino makes his decision, everything depends on what the mayor does. But let me tell you what Don would not do. He would not sell the garage at a cheaper value regardless of what move Menino takes. In other words, Don will choose to build if Menino approves and does not if Menino disapproves. This means, Don would only resort to the third choice, to sell, if he can make up for what he paid for because his other two choices are obviously better for him than the third. Thus, unless the garage's value will increase (which it most likely will due to the improvement of the RKG), he won't sell it to other developers. And like you said, no developer will buy it for a higher value than the value Don paid (unless they can break the cap limit to make a project feasible) which leads to this:

Menino approves > Don builds and rids the eyesore, but the cap limit will be broken.
Menino disapproves > Don does nothing and gathers revenue from parking to make up for the cost. Parking garage stays
Menino disapproves > Don sells garage at a higher value to another developers who will only develop if feasible > Mayor disapproves > Garage does not get developed
Menino disapproves > Don sells garage at a higher value to another developers who will only develop if feasible > Mayor approves > Garage does gets developed. Cap limit broken.

I'll summarize the results. Basically, unless the Mayor approves a project that breaks the height limit, or Don sells the garage at a lower value to another developer, this prime piece of land will remain what it is, an eyesore. Luckily, Menino only has a few more years. If anything, the Mayor's position is more likely to budge than Don.
 
Re: The Boston Arch (Aquarium parking garage)

Kent, your logic is based on the assumption that the cash flow from the garage is enough to service Chiofaro's (the Pru's) debt and cost of equity. If that is the case, you're right, Chiofaro will keep the garage as is. In fact, he'll have very little incentive to compromise on height since he can sit on a low-risk annuity.

However, given the urgency with which he's approached this (the same urgency a bull would show trying to find the exit in a china shop), I have to believe he's not meeting the Pru's cost of capital. Seems like he's under a deadline to get this permitted.
 
Re: The Boston Arch (Aquarium parking garage)

Columbus Center v2.0 (both thread and project)
 
Re: The Boston Arch (Aquarium parking garage)

AmericanFolkLegend said:
Kent, your logic is based on the assumption that the cash flow from the garage is enough to service Chiofaro's (the Pru's) debt and cost of equity. If that is the case, you're right, Chiofaro will keep the garage as is. In fact, he'll have very little incentive to compromise on height since he can sit on a low-risk annuity.

However, given the urgency with which he's approached this (the same urgency a bull would show trying to find the exit in a china shop), I have to believe he's not meeting the Pru's cost of capital. Seems like he's under a deadline to get this permitted.
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Chiofaro could also be using the Hard Economic Times as a chance to make the BRA & the Mayor look like FOOLS. Chiofaro bought the property knowing that the height was at 155ft. (Either you help me with the height regulations or I will make you look like fools to the fellow taxpayers and the entire corruption process going on in the city.
We can all agree that the BRA development process is also Tainted. How fast did it take to get Liberty Mutual project approved?

Kentxie right. If Chiofaro can't persuade Menino to go along with his plan it makes know sense moving forward with a development plan of 200ft. Chiofaro already stated that height makes no economic sense for him.
 
Re: The Boston Arch (Aquarium parking garage)

stellarfun said:
Stop with the giving him a chance.

Below is a link to the BRA scoping document -- 60 pdf pages -- that the BRA sent Chiofaro 15 months ago. The document specifies the additional information that he is to provide on his proposed building (the document acknowledges that zoning relief would need to be granted) as well as requiring him to develop alternatives that presumably would demonstrate that constructing a building conforming to existing zoning is not viable economically. (Chiofaro knew what the zoning was for the site when he bought it, and it is even more limiting than the shadow guidelines. Caveat emptor.)

So 15 months later, he has now produced a nebulous massing model. That's it. He has made no attempt to respond, even in part, to any of the provisions in the scoping document. He has done a lot of p.r., he has raced around the media circuit with great pronouncements claiming this and that, but he has yet to produce one iota of hard information that could be read and assessed in the cold light of day.

What is there to talk about? Chiofaro refuses to study alternatives, or even price them in a rudimentary way to show that he needs 1.5 million sq ft, or 1.2 million sq ft, or x number of sq ft to make this project financially viable. Why is that? Why shouldn't Menino simply take Chiofaro's declaration that he needs 1.5 million sq ft as gospel, and let him proceed?

http://www.northendwaterfront.com/storage/post-documents/20090721HarborGarageBRAScoping.pdf
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Why would Chiofaro follow the process of the BRA? So we can have Micheal Kinevy can delete the all the emails of the development process. Then say I'm sorry.

Chiofaro is right using the MEDIA. He is trying to gain public support and everybody I talked to is saying "Why isn't the Mayor sitting down and trying to create jobs and a better Boston"?

The Mayor calls all the shots in this city not the BRA.
 
Re: The Boston Arch (Aquarium parking garage)

^^Rifleman, you say: "Why would Chiofaro follow the process of the BRA?"

Answer: Because the BRA is - like it or not - the development review agency of the city of Boston, and the process for getting projects approved is very clearly written in law (Article 80 of the Boston Zoning Code). If Don/Pru want to follow the law, they can advance their permitting process. The BRA has already reviewed his project and issued their scoping determination. If Don/Pru don't want to follow the law like every other developer in the city, they won't advance their permitting process - simple as that. It's not about the Mayor, it's about the BRA and the development review statute that already exists and that every other developer in the city follows. I don't understand why Don keeps going after the Mayor - it's not Don vs. the Mayor, it's Don vs. Article 80.
 
Re: The Boston Arch (Aquarium parking garage)

^^Because the Mayor controls the BRA. How about the Mayor step up and agree to discuss with Don on how to move this project along the development process? If nothing is agree upon then fine, that's the end. Nothing can be accomplish by not speaking.
 
Re: The Boston Arch (Aquarium parking garage)

found5dollar said:
for those of us that are lazy and do not click links (like me usualy) here:

0920_harbor-garage-630x497.jpg


Old Design-------------------------------------------------------------------New Design
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looks like the old Southbay project
 
Re: The Boston Arch (Aquarium parking garage)

KentXie said:
^^Because the Mayor controls the BRA. How about the Mayor step up and agree to discuss with Don on how to move this project along the development process? If nothing is agree upon then fine, that's the end. Nothing can be accomplish by not speaking.
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You may think Menino is omnipotent, but he simply can't wave a wand and grant a zoning variance for a parcel just because somebody wants to build on it. In this instance, any wand-waving would be setting up a prolonged litigious battle with the residents of Harbor Towers, for example, and quite likely an unsuccessful legal fight for Don and the City of Boston.

Don bought that parcel knowing there was a 155 foot height limit set out in the zoning code. The residents of Harbor Towers and other nearby properties bought their property with some expectation that their views and their properties would not be detrimentally affected by a building on that parcel that was taller than the 155 feet in the zoning code.

That does not mean that a variance cannot be given, But to be successful in securing a variance, one needs to demonstrate that a building limited to 155 feet is not financially viable, and that a taller building, on its merits, is good/great for the neighborhood, and the city.

If you don't like the restrictions of zoning codes, move to Houston.

http://www.businessweek.com/the_thr...10/how_houston_gets_along_without_zoning.html

Don, to date, has yet to demonstrate why a 155 foot building won't work financially. Once that first step is done, one can move on to a larger discussion of what will work financially, and the magnitude of any variance that he would need for a larger building. If Don really needs only 350 feet for viability, then you wouldn't give him a variance for 500 feet.

Don 25 years ago produced a lot of data for IP. You can read it here:

http://www.archive.org/details/internationalpla01hmma

http://www.archive.org/details/internationalpla02hmma

http://www.archive.org/details/forthillsquarega00bost

http://www.archive.org/details/windtunnelstudyo00pete

http://www.archive.org/details/windtunnelstudyo02pete

^^^^ Course this was way before Tommy's time, but maybe Tommy is the ghost of some previous mayor who meddled in Don's development plans.
 
Re: The Boston Arch (Aquarium parking garage)

^^
Stellar, well said. It's also worth pointing out that the Don permitted IP over 20 years ago (the last thing the Chiofaro Company ever permitted in Boston), Article 80 didn't exist, and it wasn't a waterfront site so the state's Chapter 91 laws didn't apply, and the BRA was in hyper-over-drive mode to get projects built, which led to one of the worst real estate depressions the City of Boston has ever seen when the bubble went pop in the late 1980s. It's also worth noting that the primary beneficiary of the IP transaction was the city, since the key parcel on that site was the old city parking garage, which Don paid handsomely for. Long-winded way of saying that it ain't 1984 and it ain't Fort Hill Square - the rules are dramatically different this time and at this place - if Don/Pru want to play by the rules, they should carry on and actually do so. If they want to ignore the rules and claim that the Mayor could just wave a wand and have the project approved, well, that's their miscalculation and the city is worse for it because nothing will continue to happen on the garage site.
 
Re: The Boston Arch (Aquarium parking garage)

^stellarfun

Although I agree with the general thrust of your argument, particularly the fact that Harbor Towers has legal standing with respect to the garage, I don't agree with your assessment that Boston zoning code places any burden whatsoever on the developer to prove anything if the Mayor wants something done on a site.

In fact, the BRA has been spot zoning projects all over town, changing existing zoning on a parcel by parcel basis with the filing of a Planned Development Area (PDA) even for relatively minor variations from existing zoning. As you can tell by the name "Planned Development Area," the use of a PDA to change the zoning for a single building is a misuse of this tool.

With respect to existing zoning, the zoning code is not used as an envelope to represent a particular desired outcome for a neighborhood. Instead, the zoning is often at an artificially low baseline to ensure that the property owners come to the BRA to negotiate for variances. Over the past two decades, neighborhoods that have gone through a thorough planning process such as the Seaport were never rezoned to reflect the goals of the final Master Plan -- instead the BRA is waiting for each project to come to the table, using zoning as a tool to begin negotiation of ancillary benefits. This process runs counter to consultants hired by the BRA for Master Planning, who actually recommended that the BRA file a zoning amendment to reflect desired plans.
 
Re: The Boston Arch (Aquarium parking garage)

^^
Sicilian,
There is some validity to your perspective, but keep in mind that the waterfront area was actually re-zoned in the 1990s pursuant to a planning study - the Harborpark Plan - and developments in the downtown/North End waterfront have been very faithful to that plan (Battery Wharf is a good example - they got annhiliated when they tried to even consider significantly exceeding the 55' height limit, as did the development at 585 Commercial Street). In that regard, here is one area of the city where the BRA has held true to the zoning that it put in place after a lengthy community planning process, and Don is a smart enough guy to have been able to figure that out - every other developer in the city knows that the Harborpark zoning in the Downtown/North End Waterfront area is not to be trifled with.
 
Re: The Boston Arch (Aquarium parking garage)

Exactly Sicilian. A good example is the proposal over at 120 Kingston St which is planned to be around 350 ft+ which I believe far exceeds the cap limit (which is 100ft if I remembered correctly). Yet that proposal is being under review.

"every other developer in the city knows that the Harborpark zoning in the Downtown/North End Waterfront area is not to be trifled with."

I don't see this as a good thing at all. This is exactly the bad message that scares many developers away from developing the city.
 
Re: The Boston Arch (Aquarium parking garage)

^^Which is exactly what neighborhood groups want.
 
Re: The Boston Arch (Aquarium parking garage)

^^
KentXie,

There are now 38 million square feet of development projects permitted in the city of Boston. I don't think we have any problem with developers being "scared" of doing projects here.
 
Re: The Boston Arch (Aquarium parking garage)

greenwayguy1982 said:
^^
KentXie,

There are now 38 million square feet of development projects permitted in the city of Boston. I don't think we have any problem with developers being "scared" of doing projects here.
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Yeah and none of them properly financed or planned. AKA, Filenes, Columbus.

That is why their is 38Million square feet of development projects permitted.
 
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