Re: Columbus Center
Here?s a quick round-up of the top verified news, plus clarifications on points of continuing confusion. The professional, thoughtful members will appreciate this update. For those who come here mainly to cheer-lead, name-call, or holler profanity, please just skip to the next message.
1. Columbus center was sold two years ago. ? On 15 March 2006, Arthur Winn sold Columbus Center to the California pension plan. MTA is the landlord; California is the tenant/developer. Winn and a few employees became contract workers to California, but the cash, decisions, and profit are all in California. Winn goes to the office, but controls nothing.
2. California defaulted. ? Just after signing the 99-year lease on 2 May 2006, California defaulted. MTA spent the next two years re-negotiating for $284,461,484 in guarantees, but just before signing the amendment and funding those guarantees, California backed out.
3. The project couldn't qualify for a bank loan. ? Some forum members think the Anglo Irish Bank ?pulled out?. That?s incorrect. On 10 May 2006, the bank offered California a loan, but only if it met a 19-page list of requirements. They weren?t met, the offer expired on 6 September 2006, and it was never renewed, revised, or replaced. The bank didn?t pull out at all; the project couldn?t meet minimum industry criteria (even after 11 years of preparation).
4. Deadlocked and checkmated. ? As a government agency chartered to protect retirees, the California pension plan has strict limits on project size and on dollars risked. Columbus Center already exceeded both limits, so no more of California?s $240 billion cash is available. California wouldn?t even guarantee their own tunnels.
_____No subsidies have been disbursed.
_____The MTA is broke and $2 billion in debt.
_____Not once in 13 years did any bank disburse any construction cash. From September 2007 through March 2008, what California euphemistically called ?site preparation? and ?pre-construction activity? was mostly a theatrically staged effort to seduce bankers by making the site appear ?active.? That ploy failed, no bank materialized, the laborers and all their equipment departed, and last week California threatened to quit altogether if Massachusetts doesn?t pay both its costs and its profits.
5. California wants 9 subsidies for $116 million. ? In 18 financial chapters totaling 510 pages of the approved proposal dated 15 May 2003, the owners promised that the project was 100% privately funded, and needed no public cash. The Boston Globe confirmed that promise the next day.
_____California made its infamous ?no subsidy? promise just to get approved, and later admitted that they always planned to subsidize both their costs and their profits. That dishonesty was intentional and orchestrated. On 28 March 2008, California threatened to quit if Massachusetts doesn?t ?guarantee? the subsidies.
_____California now blames the need for subsidies on ?rising costs? but subsidy applications show that projected revenues and profits rose even farther and faster than costs, and that California reaps very high profit even if there are no subsidies at all: revenue of $1,146,096,618, less cost of $800,000,000 = profit of $346,096,618.
_____So, with the state budget already $1.3 billion in the red, California has pushed 9 separate demands totaling $116 million onto the Governor?s desk, to subsidize a venture that already earns a $346 million profit. Print and broadcast journalists know all about this, so stay tuned.
_____California filed fraudulent subsidy applications, claiming under penalties and pains of perjury that Columbus Center was 100% financed. State agencies now know there was never any bank loan, and that they got duped, so re-applying for those subsidies ? if a new bank can be found ? will be far more difficult.
6. Nobody wants to own tunnels. ? Some forum members incorrectly believe that government was going to pay for the tunnels. That was never the case.
_____The entire project ? tunnels, decks, gardens, buildings ? is 100% privately owned, and thus is required to be 100% privately built.
_____Last October, the state disqualified California?s request for a $20 million M.O.R.E. grant to build tunnels because the tunnels are 100% privately owned and M.O.R.E. grants are only for publicly owned structures. California replied, ?OK, we?ll just re-write the lease, give the tunnels back to MTA so they?re publicly owned, and then pick up our $20 million.?
_____Six months later, the lease wasn?t re-written, the state refused to own any tunnels, the $20 million wasn?t disbursed, and California remains in default.
7. Construction cost over air and land are equivalent. ? There?s no significant difference in air rights versus land-based construction cost. Before the Columbus Center public hearings got underway, a Sverdup/Parsons Brinckerhoff engineering team studied this, and concluded that the ?premium cost? is nominal, if it even exists at all. Consult their analysis, ?Air Rights Cost Study Parcels 16 and 17? (May, 2001).
_____California?s Columbus Center invented and promoted the ?premium cost? notion as a scheme to pay less rent.
_____All forum members who mentioned deck costs had incorrect numbers. As of 29 February 2008, the completion guarantee negotiated between MTA and California for the tunnel walls, ceilings, air shafts, and roof is $279,461,484.
8. Every delay was owner-caused. ? Columbus Center was first proposed on 18 December 1996. It?s now in its 13th year of being re-proposed.
_____To get their approvals, the owners promised to use no subsidies. Later, when they thought no one would notice, they requested 10-20 subsidies and hundreds of millions, spinning a different story at each agency.
_____They claimed to have a bank loan that never existed at all, no government agency has disbursed even one subsidy dollar, the owners refused to guarantee tunnel completion, and last week California threatened to quit.
_____Every deadline the owners set for themselves was missed, always by their own negligence.
_____The mayor allowed the schedule to be totally controlled by the owners, and they decided how long and short every step was, so citizens share none of the blame for the 13-year duration, or the missed deadlines. The death rattle is one the owners brought upon themselves.
9. California won?t substantiate its 7,487 jobs. ? California?s subsidy applications claim that Columbus Center would create 7,487 new, permanent, full-time jobs. That?s untrue. The ludicrous 7,487 total (e.g., 279 architects!) was created by an elaborate scheme of 13 data factors that were manipulated to reach 7,487. But California won?t disclose how they altered the data and the software to get that exaggerated number. The fact that the Implan job planning software is well known is irrelevant. The issue is that California won?t substantiate what it did to the data and the software to derive the 7,487.
10. Parks were privatized. ? The Lease and a separate, un-publicized City agreement both authorize California to convert the promised public parks to privately owned gardens. The public has no recourse.
11. Residential taxes were increased so California?s taxes could decrease. ? California?s public subsidy applications brag about ?$9 million annually in taxes,? as do uninformed politicians, the Boston Globe?s Tom Palmer, and cheerleaders on this forum. They're wrong. On 10 May 2006, City Council not only eliminated 19 years of property taxes for Columbus Center, but then added those very same taxes back onto the tax burden already paid by existing residential homeowners.
12. The legal documents aren?t the public?s fault. ? One forum member decried the 2,500-page lease, joking, ?we Bostonians were reading leases while Boston burned.? Actually, terms + exhibits + amendments = 3,344 pages. Having read every page, I can attest that it?s incorrect to blame Boston citizens for the length. The project partners (MTA and California) made it 3,344 pages long, no one else. Once again, the developers are at fault, not the public.
