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

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Re: The Boston Arch (Aquarium parking garage)

stellarfun said:
Being underwater has nothing to do with cashflow. When you are underwater, the market value of your property is less than the amount you owe on the property, e.g., the remaining principal of your mortgage.

In this instance, I suspect the $85 million is all the financing he could get in the market, and the other $70 million was financed by Prudential. The $85 million is close to the assessed value at the time, and that could be what the Hartford lender assessed the true market value of the garage to be. That's probably a first recourse note, so if he doesn't pay them the $85 million balloon payment in a couple of years, he turns over the keys to the garage to them. As for Prudential's $70 million, they can probably recover that by whittling away whatever equity he still has in IP as a junior partner.

The odds are fairly high that this time round, he has screwed the pooch.
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I'm not sure if you understand investments. Let?s say I bought the garage for $155 Million and the real estate market tanked. The investment I made wasn't based on the value of what other people or city assessors think. I'm basing my investment on future values or possibly how much cash flow I need to cover the loan overtime . Picking the location or (position) of a development is like being on a chess board for developments in the city.

I'm not sure what the revenues the garage actually generates or nets . I'm sure Chiofaro/Pru are thinking Long-term on this project. The location is key which unlike most projects probably generates good amount of income. I?m not saying Chiofaro and Pru might not have to dump more equity into the project incase of declining cashflow which would bring their costs up for the investment.

An investment is dumping your own equity into the project. So Chiofaro/Pru have 70Million in equity in the project. They have note for 85million Say they lost their entire equity based on value as long as they continue to pay the 85 million dollar note it really doesn?t matter until they actually sell or lose their investment.
What is the value of the garage? we?ll until Chiofaro/Pru either
A) go bankrupt
B) sell the project for a loss or profit
C) Develop it
You won?t know the real value of the garage unless A, B or C happen.
Chiofaro and Pru are not taking a loss on this project.
They also have the city in a bind. The garage is a wall to the waterfront.
It is also making the BRA look like a very incompetent agency for development.
It's not so much that Chiofaro paid so much for the garage it?s the fact of the cost to bury the underground parking. That is the problem.
 
Re: The Boston Arch (Aquarium parking garage)

greenwayguy1982 said:
^
I like the way you think...the third Harbor Tower was originally slated for the site of Rowes Wharf...once the first two got built the BRA realized the error of its ways and promptly took back the parcel/terminated the agreement with the original HT developer, then re-packaged the parcel and disposed of it to Leventhal to build Rowes Wharf instead. And thank god they did.
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Your statement is almost laughable. Once the BRA realized the error of its ways. How about the entire Development of Harbor Towers was an error. The developer they choose couldn't even put in a quality heating and coolant system without that being half-assed. The only error I see is the BRA in power.

The towers are junk for the city of Boston
 
Re: The Boston Arch (Aquarium parking garage)

Chiofaro and Pru are not taking a loss on this project.
They also have the city in a bind. The garage is a wall to the waterfront.
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The garage has been a wall to the waterfront since the 1970's. The city has been in a bind for 40 years?
 
Re: The Boston Arch (Aquarium parking garage)

AmericanFolkLegend said:
The garage has been a wall to the waterfront since the 1970's. The city has been in a bind for 40 years?
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You forgot that the Central Artery took attention away from the Garage for the 35 years out of 40.
 
Re: The Boston Arch (Aquarium parking garage)

GOD HELP US if this happens.


A new face for garage
Instead of tearing down the controversial garage, why not build on top of it? (Yoon S. Byun/Globe Staff)
By Paul McMorrow
September 24, 2010
DON CHIOFARO unveiled his latest plan to build a pair of towers along the Rose Kennedy Greenway this week, and that plan kicked off the latest round in what?s becoming a familiar dance: Chiofaro pitched two big buildings, City Hall quickly dismissed the plans, prompting Chiofaro to bemoan Mayor Tom Menino?s recalcitrance. We?ve seen this argument before. And in the end, the hated Harbor Garage is no closer to being demolished than it was before Chiofaro bought it.

The mayor and the developer have begun talking past one another. Menino says no one should take a new building the size of the Federal Reserve Tower and slap it down next to the Greenway. Chiofaro says Menino?s redevelopment agency previously encouraged him to tear down the garage, and he can?t afford to blow the thing up, bury 1,200 new parking spots underground, and build anything less than the 1.3 million square feet he pitched this week.

But what if the garage didn?t need to be demolished? What if you could leave I.M. Pei?s awful monument to urban renewal standing, saving some $200 million in construction costs, and still re-purpose the garage into the type of vibrant mixed-use construction project the Greenway so badly needs?

That would change everything.

Sy Mintz was fighting the Harbor Garage even before the garage was built. The longtime Boston architect was a chief waterfront planner during the tenure of Boston Redevelopment Authority director Ed Logue. In the early 1960s, he presaged Menino?s Greenway study: He decided the waterfront was no place for massive buildings, and it would be better for zoning regulations to provide a step down from the High Spine to the harbor. Mintz settled on 155 feet, the height of the Custom House Tower?s cornice line, and that figure became the benchmark for waterfront zoning.

Then, as now, it seems as though zoning was written to be broken. I.M. Pei and Theodore Berenson, who owned several decrepit wharves along the harbor, got Logue to acquiesce to a 400-foot limit for Berenson?s Harbor Towers development. They supported the buildings with a cheap above-ground garage along the Central Artery. ?It was wrong to separate the parking from the residences,?? Mintz said. ?Obviously, there?s nothing to rant or rave about in terms of its beauty, or the location.??

The Harbor Garage has become more problematic since the Central Artery?s demise, walling off the city from its waterfront. Mintz started running the numbers on redevelopment scenarios before the structure came on the market, and he worked with a development team that was outbid by Chiofaro in the building?s 2007 auction. He says the thing that?s driving Chiofaro?s consistently tall redevelopment proposals isn?t the $153 million the developer paid for the garage, which is the figure Menino is fond of referencing. It?s the cost of burying the parking.

?If you?re going to demolish the garage, how could you not propose what [Chiofaro] did??? Mintz said. ?But if you eliminate the demolition as a driving cost, you can reduce the height.??

Redesigning the garage would open up loads of development potential. Mintz believes a developer could wrap it with active uses and top it off with a pair of modest towers. The plan would be economically feasible, and it would only rise to 290 feet ? a height believed to be acceptable by City Hall.

To change the garage?s look, Mintz would blow off the front face and create new housing along the structure?s Atlantic Avenue side. He would reconfigure the building?s base, lining it with active retail and creating a wide, transparent retail arcade running between the harbor and the Greenway. He would break up the garage?s massing on the street level by notching into its facades. He would cap the garage with a 17-story office tower, and a 19-story hotel and residential tower; both would open onto an active green podium at the garage?s current roof. ?You can change the perception at the ground, and that?s where most of us are,?? he said. ?You can change it, and overnight, you?d say, where?s the garage???

City Hall hasn?t seen Mintz?s plans. He?s careful to say he?s not second-guessing the recent Greenway study, and that the decision on height is ultimately the city?s to make. He?s going public with his plans now because the stalemate over the garage is getting worse, not better. And this redevelopment opportunity is too important to squander.

Paul McMorrow is an associate editor of CommonWealth magazine. His column appears regularly in the Globe.

http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2010/09/24/a_new_face_for_garage/
 
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Re: The Boston Arch (Aquarium parking garage)

In theory, this could be a workable solution. It's amazing to me that it's taken this long for an actually useful starting point for a real compromise to work its way into the public discourse.

In practice, though, my fear is that it would be a landscraper stump version of Marina City (I would resize the pic to be 25% of the height but don't know the modifier to do that in the IMG tags)...

450px-Marina_City_-_Chicago%2C_Illinois.JPG
 
Re: The Boston Arch (Aquarium parking garage)

stellarfun said:
Leaving the garage saves Chiofaro one very big headache: where to park 600 cars for HT during construction?
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This would be a tradegy for this prime location. The entire BRA should be fired for this solution.
 
Re: The Boston Arch (Aquarium parking garage)

Rifleman, modifying the ground floor of the garage and wrapping it in other uses may actually be a clever solution. In fact, nothing about Chiofaro's proposals make me think that his development will be any better than a modified garage solution. The major drawback of this is that there is little doubt that nothing "ionic" would come out of it.

(Of course, that would be a net positive, since we wouldn't want to distract from the ionicness [ionicity?] of the Greenway, would we?)
 
Re: The Boston Arch (Aquarium parking garage)

Shepard said:
Rifleman, modifying the ground floor of the garage and wrapping it in other uses may actually be a clever solution. In fact, nothing about Chiofaro's proposals make me think that his development will be any better than a modified garage solution. The major drawback of this is that there is little doubt that nothing "ionic" would come out of it.

(Of course, that would be a net positive, since we wouldn't want to distract from the ionicness [ionicity?] of the Greenway, would we?)
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This would be the easy way out for everybody. The entire point is to get rid of the above ground parking garage build a quality development towards the Greenway. And hopefully Chiofaro could create a development that is unqiue to open up the waterfront.

Harbor Tower residents would get what they deserve with this type of thinking.

I'm sure when worse case scenario approaches Chiofaro/Pru have already thought about this.
 
Re: The Boston Arch (Aquarium parking garage)

TheRifleman said:
I'm not sure if you understand investments. Let?s say I bought the garage for $155 Million and the real estate market tanked. The investment I made wasn't based on the value of what other people or city assessors think. I'm basing my investment on future values or possibly how much cash flow I need to cover the loan overtime . Picking the location or (position) of a development is like being on a chess board for developments in the city.

I'm not sure what the revenues the garage actually generates or nets . I'm sure Chiofaro/Pru are thinking Long-term on this project. The location is key which unlike most projects probably generates good amount of income. I?m not saying Chiofaro and Pru might not have to dump more equity into the project incase of declining cashflow which would bring their costs up for the investment.

An investment is dumping your own equity into the project. So Chiofaro/Pru have 70Million in equity in the project. They have note for 85million Say they lost their entire equity based on value as long as they continue to pay the 85 million dollar note it really doesn?t matter until they actually sell or lose their investment.
What is the value of the garage? we?ll until Chiofaro/Pru either
A) go bankrupt
B) sell the project for a loss or profit
C) Develop it
You won?t know the real value of the garage unless A, B or C happen.
Chiofaro and Pru are not taking a loss on this project.
They also have the city in a bind. The garage is a wall to the waterfront.
It is also making the BRA look like a very incompetent agency for development.
It's not so much that Chiofaro paid so much for the garage it?s the fact of the cost to bury the underground parking. That is the problem.
Click to expand...

Yes, I understand investments. I don't think you do though.

The way you seem to approach investing is that if a house is on the market for $250,000, you'd pay $500,000 because you expect that to be the value at some future date. And you're willing to pay the financing costs for the additional $250,000 premium for however long it takes until the property gets to the $500,000 value you anticipate.

Let's do some crude calculations on Chiofaro's cash flow for the garage.

Expenses
Taxes: $2.4 million
Interest payments on the $85 million note at 5.0%: $4.2 million
Interest payments on the $70 million of Pru money at 3.0%: $2.1 million
Insurance, maintenance, management fee to garage operator, utilities, etc: $3.0 million

Total expenses: $12.7 million

Revenue
600 spaces for HT residents at $400* a month: $2.9 million
800 public spaces each generate $40 a day in fees for 365 days**: $11.7 million
Retail space rents: $1.0 million

Total revenue: $15.6 million

* I don't know how much the HT condo owners pay to park in the leased spaces. The $400 is the monthly parking rate for garage users who are not HT residents.
** The rates at the Harbor Garage are among the most expensive in Boston. $5 for 20 minutes; $15 for first hour; $35 all day (All day Early Bird price is $19.)

So with some generous assumptions about revenue, Chiofaro/Pru's ROI on their $155 million purchase is about two percent.

How much of a cash cow the garage was for Interpark depends on how much they paid for it in 2000, and their financing. (Under the terms of Chiofaro's purchase, Interpark continues to manage the garage.) The assessed value in 2000 was $45.5 million.
 
Re: The Boston Arch (Aquarium parking garage)

stellarfun said:
Yes, I understand investments. I don't think you do though.

The way you seem to approach investing is that if a house is on the market for $250,000, you'd pay $500,000 because you expect that to be the value at some future date. And you're willing to pay the financing costs for the additional $250,000 premium for however long it takes until the property gets to the $500,000 value you anticipate.

Let's do some crude calculations on Chiofaro's cash flow for the garage.

Expenses
Taxes: $2.4 million
Interest payments on the $85 million note at 5.0%: $4.2 million
Interest payments on the $70 million of Pru money at 3.0%: $2.1 million
Insurance, maintenance, management fee to garage operator, utilities, etc: $3.0 million

Total expenses: $12.7 million

Revenue
600 spaces for HT residents at $400* a month: $2.9 million
800 public spaces each generate $40 a day in fees for 365 days**: $11.7 million
Retail space rents: $1.0 million

Total revenue: $15.6 million

* I don't know how much the HT condo owners pay to park in the leased spaces. The $400 is the monthly parking rate for garage users who are not HT residents.
** The rates at the Harbor Garage are among the most expensive in Boston. $5 for 20 minutes; $15 for first hour; $35 all day (All day Early Bird price is $19.)

So with some generous assumptions about revenue, Chiofaro/Pru's ROI on their $155 million purchase is about two percent.

How much of a cash cow the garage was for Interpark depends on how much they paid for it in 2000, and their financing. (Under the terms of Chiofaro's purchase, Interpark continues to manage the garage.) The assessed value in 2000 was $45.5 million.
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Wow those are STELLAR numbers. I think he should raise the 800 Parking spots to an extra $10 bucks for an average of $50 bucks a day. Would increase revenues to $14,600,000 in Revenues.
Unless I saw the entire numbers in front of my face it's all a ?

I still think he got a good deal.
 
Re: The Boston Arch (Aquarium parking garage)

This green-hat analysis of the books of the Chiofaro reminds me eerily of the reaction to Columbus Center when it was first proposed.

Unless the posters on this board in real life are named Don Jr., I don't think anyone has enough data on which to draw conclusions.

No offense, but ... does it really matter the costs?
 
Re: The Boston Arch (Aquarium parking garage)

Well, the costs of Columbus Center sunk it, so it's a matter of some public concern. The last thing we want to have is another unfinished project.
 
Re: The Boston Arch (Aquarium parking garage)

JohnAKeith said:
This green-hat analysis of the books of the Chiofaro reminds me eerily of the reaction to Columbus Center when it was first proposed.

Unless the posters on this board in real life are named Don Jr., I don't think anyone has enough data on which to draw conclusions.

No offense, but ... does it really matter the costs?
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In most instances, it wouldn't.

In most instances, a developer at this stage would have responded to the BRA's scoping document of 15 months ago which does ask for some financials.

If you want an excellent case study on the recent costs of building a tower in Boston, this MIT document on One Lincoln has it all laid out. This may be in the public domain only because Chiofaro got kicked off the project because he couldn't advance it beyond square one. Chiofaro sued. Chiofaro lost.

http://ocw.mit.edu/courses/urban-st...nd-investment-fall-2006/assignments/case3.pdf

^^^^Note the guaranteed base construction price for One Lincoln (1 million sq ft) was $163 million. (Total development costs were $330 million, including land, linkage, all that sh*t.) So it is hard to understand how Don's 1.2 million sq ft in the current economic climate is costing $1 billion.
 
Re: The Boston Arch (Aquarium parking garage)

stellarfun said:
Leaving the garage saves Chiofaro one very big headache: where to park 600 cars for HT during construction?
Click to expand...

Did people forget that the purpose of this plan is to rid a wall between the Greenway and the sea, not keep it? It's like, let's save cost by not demolishing the Berlin Wall and just put ladders on each side. Sheesh.
 
Re: The Boston Arch (Aquarium parking garage)

KentXie said:
Did people forget that the purpose of this plan is to rid a wall between the Greenway and the sea, not keep it? It's like, let's save cost by not demolishing the Berlin Wall and just put ladders on each side. Sheesh.
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In the first iteration, it was quite likely you couldn't see the sea from Atlantic Ave., but had to traverse the glass lobby/atrium/mall and at the far end you could see the sea. In the second iteration, the 'town square', you could see the sea as you can now, past Fidelity Park; the lobby/atrium/mall abandoned for a glass lean-to on the north facade. In the current, third iteration, you can't see the sea because the two towers are angled zigzag, so you have to walk between then, and once on the harbor side, you can see the sea.

Other than cost, no reason one couldn't install a 10,000 sq ft HD video screen, trompe l'oeil style, on the west wall of the garage, and feature a live video view of the sea, interrupted every five minutes by one minute's worth of sponsor advertising. When night falls, mesmerize instead with a video stream of the lagoon at Bora Bora, or the Bosporus Strait, or Betty's Bay South Africa. Pay for itself and the Arch in no time. Could be the biggest attraction on the Greenway.
 
Re: The Boston Arch (Aquarium parking garage)

A wraparound proposal isn't nearly the cost-saver some think it is: Chiofaro would have to replace the spaces lost by modifying the garage somewhere - either underground or by extending the garage vertically and eating into the already-limited profits of his height-limited buildings.

Ron Newman said:
Well, the costs of Columbus Center sunk it, so it's a matter of some public concern. The last thing we want to have is another unfinished project.
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But this site isn't CC or Filene's. Even if the project stalls, if built as desired the worst case scenario is that the garage is torn down, there's a better view of the harbor from the Greenway, and fewer people are able to drive into the city.
 
Re: The Boston Arch (Aquarium parking garage)

I like the video screen idea. Why do we HAVE to be able to see the "sea" from the greenway? We're talking about the view between the aquarium and the harbor towers. You wouldn't be able to see water. And there's wide open access to the harbor on either side of the site, so I don't see how putting a building where there already is one somehow blocks access.

All the objections over blocking views and access from the greenway are ridiculous. My mind is just blown by some of the requirements put on development in this city.
 
Re: The Boston Arch (Aquarium parking garage)

gooseberry said:
I like the video screen idea. Why do we HAVE to be able to see the "sea" from the greenway? We're talking about the view between the aquarium and the harbor towers. You wouldn't be able to see water. And there's wide open access to the harbor on either side of the site, so I don't see how putting a building where there already is one somehow blocks access.

All the objections over blocking views and access from the greenway are ridiculous. My mind is just blown by some of the requirements put on development in this city.
Click to expand...

Don't forget the Shadows.
 
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