Columbus Center: RIP | Back Bay

[Ned Flaherty]

Re: Columbus Center

Hello, Sidewalks.

. . . I find it mildly annoying when someone is pontificating about a subject which they appear to have little or no understanding.

Don?t be annoyed; I?m not pontificating; the data I post in the forum about the owners? costs, revenues, profits, and subsidies are all owner-provided, under penalties and pains of perjury, and so are worth quoting.

Anyone who feels that there is no legitimate basis for these data also must question the validity of the public subsidy applications seeking to finance this private venture with public dollars. Equally in doubt is the competence of the agencies giving that money away in grants, income tax breaks, property tax breaks, property discounts, government loans, etc.

The data you asked for appear below.

. . . your citing of the value vs. cost calculation is more than a bit questionable . . . You have no idea what the costs and value of this project are.

In case anyone else had the same misunderstanding, thanks for pointing that out. I agree that the data the owners provided the government is questionable, for all the reasons you mention, and several others. I also agree that I, personally, don?t know the costs and values. Again, the numbers I post here are from public records.

. . . What is the estimated sales price per square foot of the condos in this project? . . . hotel rooms per key? . . . retail and office rents? . . . tenant improvement? . . . current construction costs?

Figures submitted under penalties and pains of perjury, on 12 December 2006, by CalPERS-CUIP-MURC-CWCC:
Sale prices: $580-$1,550 per square foot
Hotel value: 162 rooms, value-per-key withheld
Retail rents: withheld
Office rents: This project has no office space.
Tenant improvements: Calculated into construction costs.
Construction costs: $438,300,000
Soft costs: $145,850,000
Developer fee: $5,850,000
Contingency: $46,800,000

. . . The answer is...YOU DON'T KNOW. . . because such an evaluation would require . . . extensive data from office, retail and hotel brokers . . . enormous input from the contractor . . . financing and interest rates . . . phasing and lease up periods . . . I'm guessing that the figure you quoted below was not generated by such a diligent analysis.

There?s no doubt that all those factors, and others, determine the answers. I, too, guess that the figures which I quote from public records are not generated by any diligent analysis, because each public subsidy application contradicts the others.

. . . don't make claims about how exceptionally profitable this project is, because there is no legitimate basis for making such statements.

The claims to profitability aren?t mine; they were made by CalPERS-CUIP-MURC-CWCC in public subsidy applications for government-backed loans, which required sale projections, profitability analyses, and repayment schedules. But thanks for getting me to confirm that the numbers are theirs, not mine.

 

[stellarfun]

Re: Columbus Center

Stellarfun,

I believe there are at least 6 options, not just 4.

1. Let Winn go, and finish it alone.
2. Replace Winn, and finish with the new partner.
3. Write off the loss now, and depart.
4. Sell all to the highest bidder, and depart.
5. Wait.
6. Recover the loss to date by suing Winn (see below).

Winn gave CalPERS-CUIP-MURC a prospectus in 2005. That proposal persuaded CalPERS-CUIP-MURC to take a leap of faith. Yet life today has turned out very differently:

■ 2 years behind schedule
■ lease in default
■ must guarantee MTA $285 million to resume work
■ amendment negotiated over last 2 years now scrapped
■ cash from state unstable and/or fading
■ no cash from city
■ no cash from federal level

It?s certain that Winn?s prospectus did not predict these 7 outcomes. So the West Coast teams now can rightfully ask themselves:

● Since selling to CalPERS, in what ways has Winn failed?
● What did Winn claim that was not true?
● What did Winn not disclose at all?
● What else may come to light?

Ned, your claims and assertions are like quicksilver, at one spot one moment, another spot the next.

Here is what you posted in post #455:

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.

If Winn is but a contract employee of California, as you assert, he has NO ownership stake, he is NOT a partner, he is a mere serf to the vassals and lords in California, Macfarlane Partners and CalPERS.

In post #451, I bolded a quotation from Palmer's original article that stated that CalPERS had guaranteed the financing of the deck. Now you are asserting that CalPERS did no such thing. If CalPERS did not guarantee the deck, what did their $270 million buy?
_____________________

I can understand how Winn has spent $40 million on this project, between studies, fees, and site preparation. For CalPERS to now have already spent $70 million on top of Winn's cost, IMO that can only mean the steel. As I read the construction schedule, the deck over the Pike was going to be built in phases, one parcel at a time, starting with the westernmost parcels. Given that sequence, I'll wager the steel for those parcels has been purchased, and either has been or is being fabricated, probably in China. If so, it might take three to six months to deliver it to Boston, an arrival time that would be consistent with the original schedule, once site preparation began. (And buying bridge steel from China is no big thing these days, sadly. The steel for the new Bay Bridge is coming from China.)

 

[sidewalks]

Re: Columbus Center

Again Ned, you did say that this project is "unusually profitable". And even if you are basing that assertion on numbers that the developer did provide, those projections were made at a very different point in the real estate cycle. (You may have heard that the housing market isn't quite as rosy as it was a few years back). So to maintain that this project is risky but still "unusually profitable" is disingenuous at best.

Quote:
Originally Posted by pelhamhall
To say that the project is "unusually profitable" and then in the same breath say that is is "extremely risky" boggles my mind. The relationship between profit and risk is the very model that all business transactions are based on.

NED's RESPONSE
Hello, Pelhamhall.

Yes, business transactions are based on both profit and risk. And, yes, they affect each other. But no, they are not the same thing. Owners consider both profit and risk, but bankers ? who just want their principal and interest repaid ? focus on the risk of repayment, with far less attention to owners? eventual profit. Over 13 years, no banker in the world has ever disbursed even $1 to this project, because those bankers apparently all share the same concerns.


Quote:
Originally Posted by pelhamhall
. . . while the enormous risk of this project remains, the potential profits have now plummeted.

NED'S RESPONSE
That?s untrue. Again, because risk and profit are different things, they do not always move in tandem. In the case of Columbus Center, the enormous risk does remain, but the profit projections in California?s certified public subsidy applications still are shown as unusually lucrative.

 

[Mike]

Re: Columbus Center

Mayor asks abutters for patience with Columbus Center
By Thomas C. Palmer Jr.
Globe Staff / April 11, 2008


Mayor Thomas M. Menino yesterday asked neighbors of the messy Columbus Center construction site to be patient for a few weeks while the developers try to find financing to restart the troubled project.

Menino said one of the local partners from WinnDevelopment is in California talking to executives of the state pension fund that is backing the project about putting the pieces back together, only days after Massachusetts state officials pulled $10 million of grant money, which could kill the mixed-use project.

"Some of you may not agree, but I think this is a good project for the city," Menino said, walking along Cortes Street above the Massachusetts Turnpike, which divides the Back Bay from the South End. "It plugs the hole."

More than a dozen residents joined Menino and other city officials, expressing frustration over the idle construction site, with equipment and materials scattered about.

"It's a disaster here," said Mark Dimino, a Berkeley Street resident. "We also lost parking spaces, and a sidewalk is [temporarily moved] out in the street."

All the residents who spoke said they support Columbus Center, the $800 million hotel, condo, and retail project that has been 11 years in planning and the subject of fierce opposition from some.

"We were very committed to seeing this project finished," said Lynn Andrews, a Cortes Street resident who thanked Menino for coming. "This has been sort of a neglected street for a long time."

WinnDevelopment spokesman George Regan said, "We've spent a lot of time and money on this project, and we're going to make it happen. . . . We want people to bear with us. We're working very hard to get this done."

Menino said he spoke with Governor Deval Patrick last week and Patrick did not rule out restoring funds to Columbus Center "if they get their financing in place."

Menino said construction workers would be particularly unhappy if the project died. "I think they're trying to get the unions on board as well," he said, making it "much easier for government to come up with additional financing."


Link

 

[pelhamhall]

Re: Columbus Center

It's like the Hillary Clinton of real estate developments... it just won't die and go away.

The neighbors mostly want this project (I mean, there's always going to be a handful of Ned-types to deal with on any project), it has very widespread city support, and it's all permitted and ready to go. How much of a no-brainer is this project, once capital becomes available?

I heard some more good news for Columbus Center - pre-sales at the Clarendon are very, very strong. This is probably the best news that the Columbus Center team can hope for.

 

[TedG]

Re: Columbus Center

From The South End News

Columbus Center hits more snags
by Linda Rodriguez
managing editor
Thursday Apr 10, 2008


With construction on the site stopped - and local residents worried that they?ll be looking at seven acres of rubble and dirt for the next year and a half - the developers of the beleaguered Columbus Center have another problem to deal with: state funding for the project has collapsed.

On April 7, the Patrick administration denied the project?s application for $20 million in Massachusetts Opportunity Relocation and Expansion Jobs grants, better known as MORE grants. The grants are earmarked for projects that benefit publicly owned infrastructure in some way. In June 2007, the Columbus Center project, though the application requested $20 million, was awarded a $10 million grant on a preliminary basis, and invited to submit a more in-depth application for the second round of considerations. That application was "unsuccessful," according to Kofi Jones, spokeswoman for the Executive Office of Housing and Economic Development, which administers the grant.

"We are redirecting the $10 million MORE grant [to other projects]," Jones said. "What prompted the decision was the developer requesting an 18-month extension on the terms. It was clear that they were not ready for immediate work on the project. They can apply for funding in the future, although we have made no commitment to the funding."

The developers of the project, jointly Winn Development and California Urban Investment Partners (CUIP, a joint venture of California Public Employees Retirement System and Johnson/MacFarlane Partners), requested an 18-month moratorium on construction on March 20. Construction on the massive project, which straddles the Massachusetts Turnpike between the South End and the Back Bay, had already begun in November 2007.

At the time, Alan Eisner, a spokesman for Winn Development said that they requested the delay because they were waiting on state funding, specifically the MORE grant and a loan from MassHousing (see "Construction on Columbus Center Halted," March 27). Asked then what would happen should the grants not be awarded, Eisner said that he didn?t want to speculate on "hypotheticals."

The administration?s denial of the MORE grant has also impacted the other potential state funding. MassHousing, which had agreed to $20.6 million in loans to the project, said April 9 that at this point, it will not close on the loans.

"MassHousing has considered the commitment of public money from the state crucial to the success of Columbus Center," the agency said in an e-mailed statement. "When the state withdrew its commitment of MORE money, we felt we could not proceed with closing the MassHousing loan. MassHousing will continue to assess the situation at Columbus Center."

Representative Byron Rushing, who has long been a critic of the project, which borders his district, said that he was pleased that the administration had denied the project?s application for the MORE grant. "I understand what the Governor has said and done is that we?re not going be held hostage [by the developers], so you have to do this without a guarantee you?re going to get anything from the state," he said.

Moreover, said Rushing, "I don?t know how this small amount of money becomes a deal breaker for [the developers]. I don?t think these grants are preventing them from moving forward, it has to be other funding."

Funding has been a major concern for the project, which has ballooned in cost from $300 million in its initial proposal to its current estimated $800 million. In the last two years, Anglo Irish Bank, a major funding source for the project, backed out of a $437 million loan, forcing the developers to find other investors. In November 2007, the MTA gave the developers an ultimatum: Secure $500 million in funding by Jan. 15 or risk having the project suspended. When the developers missed that deadline, the Massachusetts Turnpike Authority (MTA) gave them a 30-day extension. By Feb. 15, the developers still didn?t have the funding. When asked in March how much funding the project had accrued, spokesman Eisner said that the developers had secured around $310 million.

The inability for the project to secure funding and the loss of the state subsidy are two major blows to its future.

"This is like a perfect of storm of financing that?s going against it. As far as we?re concerned it?s a big obstacle, but we?re not going to give up. It?s a very tough time," said George Regan, another spokesman for the project, adding that current concerns about the economy are adding to their problems. "It?s sort of like a 9/11 of financing."

Regan also said that the developers have no intention of selling the project - and its approvals and permits - to another developer. "We?ve had 13 years into this, that?s a substantial amount of time and money. It?s a challenge but we?re not dead," he said. "We?re going regroup, talk to all our lenders, work with city and state officials, and come back again with a new helmet on."

Still, some believe there?s more at work here than just the loss of funding.

"I think there?s something else going on and we don?t what that is," said Rushing. "And we might not know what it is until people start suing each other."

In the meantime, residents and their representatives are concerned about the site itself. Brian Boisvert, president of the Bay Village Neighborhood Association, said that while the neighborhood generally supports the project, "to have it already have begun and to have a big gap in between where nothing much happens is kind of disappointing."

Boisvert said that while representatives of the developers recently came to the neighborhood association meeting to discuss the situation and have been responsive to their concerns, a resolution is still pending.

House Speaker Sal DiMasi, who has long opposed public funding for the project, sent a letter to the developers and the MTA on Wednesday, asking that if the project is to be delayed, that they clean up the current construction site.

"The situation is a mess," said Aaron Michlewitz, aide to the speaker. "While we are happy that the MORE grant will be used for more appropriate projects in the state than luxury condos, the mess that has been created by the beginning of construction and now the stopping of construction leaves many in the community in limbo."

Michlewitz said that his office has received multiple calls from residents concerned about the status of the construction, given that the developers had already begun excavation when they stopped construction. Rep. Rushing said that he?s also heard and has similar concerns.

On Tuesday, Boston Redevelopment Authority director John Palmieri issued a similar letter to both the MTA and the developers, asking "that interim measures be taken to preserve the integrity of the neighborhoods surrounding the project while the development team works through the delay in construction."

Mac Daniel, spokesman for the MTA, said that the Authority will be working with the developers on the terms of the proposed moratorium, which will include restoring the Turnpike and surrounding area back to its original condition.

"We still want to and need to negotiate the terms of the 18-month moratorium. We are in contact with the developers and both sides seem to be willing to sit down and talk, so that?s positive news on both sides," Daniel said, adding that negotiations have not yet begun.


Linda Rodriguez can be reached at lrodriguez@southendnews.com

 

[JimboJones]

Re: Columbus Center

So, if anyone would like to submit comments on why they support Columbus Center, I'd love to hear them. This forum would be a great place to write them.

I believe Mr Flaherty's number one (and numbers two through 99) reasons for being against it is based on its funding.

I know that some other people feel the same way (to an extent, so do I - or should I say, I'd support it more if it didn't have the public funding element).

What other reasons do you support it?

 

[Ron Newman]

Re: Columbus Center

I support it because it will knit together a small but significant gap in the city fabric.

However, I support it only if it can be built without public subsidy, as I think the subsidies would be better used elsewhere. If there are to be public subsidies for job creation, then some of the residential space (which doesn't create any jobs) should be changed to office (which does).

 

[nedev18]

Re: Columbus Center

I support it for the fact that it will cover up a significant portion of that chasm that cuts a gash through the city.

Other reasons would be that it's a nice tower, some green space is involved (I personally like the smaller parks rather than the large block originally discussed), and it will infuse some life into that area.

But mostly for the first reason I posted.

 

[Riverworks]

Re: Columbus Center

Columbus Center is our last hope! What other projects of this scale and magnitude do we have? What will this forum do?

Today was the first day in a long time that I started using Facebook again. Yeah, it's come to that.

 

[Scott]

Re: Columbus Center

What other reasons do you support it?

Building townhouses on the south side of Cortes Street would really add to that area.

 

[nedev18]

Re: Columbus Center

Menino says he?s awaiting answers from Columbus Center developers

by Linda Rodriguez
managing editor
Friday Apr 11, 2008

With the future of the Columbus Center in question, Mayor Thomas Menino and several city officials paid a visit to the dormant site of the massive project Thursday afternoon. District 2 City Councilor Bill Linehan, Transportation Commissioner Tom Tinlin and Boston Redevelopment Authority director John Palmieri joined the mayor in speaking with the residents of Cortes Street, whose homes all overlook the stalled construction site, now shrouded in chainlink fence and green netting.

"I think the best we can do with you folks is make it as easy on you as we can," he told the residents, adding that his office will be in talks with the developers to determine the next course of action.

Construction on the long awaited Columbus Center project began in November 2007, but stopped at the end of March, because, developers said, they were waiting on funding from the state. On April 7, the Patrick administration announced that because the developers had halted construction, that funding would not be available. In specific, the $10 million MORE grant, which developers had claimed was an essential part of their "capital structure," would be disbursed to other projects in the state (See "Columbus Center Hits Another Snag," April 10). On the heels of that announcement, MassHousing announced that it would no longer be closing on $20.6 million in loans it had previously approved for the project.

"Right now, as I understand it, Roger Cassin [member of Columbus Center development team] is in California to try to work with the funder to try and resurrect the funding that has been put on hold," Menino told the residents, later clarifying the funding he referred to came from California Urban Investment Partners (CUIP, a joint venture of California Public Employees Retirement System and Johnson/MacFarlane Partners), partner to Winn Development on the project. "We have to get some kind of answer from them when they get back from California."

Standing at the corner of Cortes and Berkeley Streets and surrounded by concerned residents, Menino emphasized that while he didn?t have any answers now, he would be getting back to the community soon.

"You can?t expect people to live with heavy equipment and sand," he said, adding that he and his staff are continuing to monitor the situation. In a conversation at City Hall before the tour, Menino told South End News that he hoped to at least put the neighborhood back in its original condition. "You can?t just say, ?I?m walking away for two years,?" he said.

Asked by the South End News if he thought the loss of the state funding for the $800 million project would signal its end, Menino said, "I think that was the gap financing that was needed to make the project work." Later, he said that the state funding, which at most would have consisted of a $20 million MORE grant and $20.6 million in loans, was necessary to bolster the project, given the rising construction costs. He also said that he had spoken with Governor Deval Patrick regarding the grants and was told that if the Columbus Center developers were able to get their financing together, the governor would "give his piece."

During the tour, Menino was asked by a resident how the project could have started without the financing in place. "I haven?t got an answer for that," he said, "it?s not for us, it?s for the developer to answer that."

Still, Menino supports the project, saying, "It?s the right deal at the right time."

Asked by the South End News if he felt the project would still move forward, he said, "I think the project is going to be delayed 18 months... I think pulling the plug at this time, it?s half baked."

Later, on Cortes Street, he added, "The project?s out of hand, we?ve got to get it back into hand ... I just wish we had some certainty to the project, right now, there?s so much uncertainty."

Other city officials accompanying Menino expressed a similar cautious hope about the future of the Columbus Center. Linehan, whose district includes the site and parts of the neighborhood surrounding it, said, "I?ve been in city government a long time and things change. I?m very hopeful [about the project]. I?ll do everything I can in my capacity to see that it happens.

"It?s an important project," he said, adding, "it?s got to happen."

Palmieri is more concerned about the general financing of the project, loss of the state funding aside. "I?d like to think it?ll happen, it?s tough to know right now," he said, explaining that his office is in communication with the developer and are asking "what plan he?s identified to fill the [financial] gap."

Asked if he thought the developer might sell the approvals and the permits for the project, he said, "I?d prefer not to project out on that,? adding that any buyer would likely face the same obstacles.

"This has been kind of sudden. We?re all a bit surprised," he said.

Though encouraged by the mayor?s and the city?s attention to the issue, residents of Cortes Street, many of whom support the project, are still frustrated with the rubble in front of their homes.

"We are so thrilled you came out here today," Lynn Andrews, a Cortes Street resident and a supporter of the center, told the mayor. Later, Andrews said that if the center isn?t built, "They can?t jut put it back the way it was," she said, adding, "They should build it back to something nicer than what it was."

Brian Boisvert, president of the Bay Village Neighborhood Association, said that while the neighborhood still supports the project, they?d like to see the parcel at least returned to what it was before construction began. "Ultimately, if this becomes the Columbus Center, then it?s a pain worth going through," he said. "But we?re in a definitely frustrating situation."

Link

 

[statler]

Re: Columbus Center

Banker & Tradesman - April 14, 2008

Cassin Vows Columbus Center Project Remains Alive and Well
By Thomas Grillo
Reporter

Despite financial setbacks and a work stoppage, Columbus Center?s developer says the $800 million project is not dead.

?We have no intention of abandoning it,? Roger Cassin, managing partner of WinnDevelopment, told Banker & Tradesman in a rare interview. ?We have serious impediments to overcome, but we?ve invested more than $100 million in it and we?re not going away.?

At stake is the controversial, 1.3 million-square-foot mixed-use development to be built on a 7-acre deck above the Massachusetts Turnpike straddling Boston?s Back Bay, South End and Bay Village neighborhoods. The project consists of 443 condominiums, a 162-room hotel, three parks and 39,400 square feet of retail space. After a five-year delay, construction began earlier this year, but funding woes have brought construction to a standstill.

Last week, Banker & Tradesman reported on its Web site that MassHousing, the state?s affordable housing bank, would not close on a pair of loans totaling $20.6 million for the project. The money would have been used to leverage 44 affordable condominiums in the mixed-use project near the turnpike entrance by Columbus Avenue and Arlington Street.

The decision by the quasi-state agency followed the Patrick administration?s withdrawal of up to $20 million in Massachusetts Opportunity Relocation and Expansion Jobs Capital (MORE) grants for the development.

In a prepared statement, the agency said, ?MassHousing has considered the commitment of public money from the state crucial to the success of Columbus Center. When the state withdrew its commitment of MORE money, we felt we could not proceed with closing the MassHousing loan. MassHousing will continue to assess the situation at Columbus Center.?

Thomas R. Gleason, MassHousing?s executive director, declined repeated requests for further comment.

?It?s a ripple effect,? said Boston Mayor Thomas M. Menino, who remains a strong supporter of the project. ?When the governor said he would not provide the MORE grant, MassHousing said they won?t do their part. But if the governor changes his mind to provide the funding, MassHousing will follow.

?Still, it?s unclear to many observers why the lack of $40.6 million in grants and loans could derail a project that could have a price tag of nearly $1 billion if it?s completed,? the mayor added.

?A Perfect Storm?

Cassin offered the following explanation.

?It?s a perfect storm of negative events,? he said. ?Everybody wanted to be the last money in, so nothing was closed; it?s all in limbo. We are spending $5 million a month on this and I thought we had hit our stride. But none of the state monies have been nailed down and that?s in the face of the capital markets window shutting, and the private funders are saying they?ve got a fiduciary obligation. So we have the unfortunate result of suspended construction. I?m trying to get everybody together and see if we can?t resurrect this thing.?

Cassin was expected to meet late last week with private and public funders to get the project back on track, he said.

Menino met with a carefully selected group of neighbors at the construction site last week that did not include any opponents. Some neighbors have insisted the project is too dense and that Cassin has reneged on a promise not to seek public financing.

?I still think it?s a great project,? said Menino. ?It fills in a hole in our city, brings jobs and tax revenues. The development makes a lot of sense for this community. It?s the right deal at the right time. Right now, there?s all kinds of uncertainty, but Roger Cassin is a good developer and a good guy. It?s just that the project is out of hand and we need to get it back into focus to figure out where we are going with this.?

Despite the fact that five years have lapsed since the Boston Redevelopment Authority approved the project, the BRA?s director, John Palmieri, said Cassin needs more time to secure the financing. ?It?s a complicated development with multiple sources of funding, grants, state monies and tax credits,? he said. ?Costs have skyrocketed and this has exceeded anything the development community could have anticipated.?

Two of the project?s most vocal opponents, state Rep. Martha M. Walz and House Speaker Salvatore DiMasi, could not be reached for comment by press time.

 

[briv]

Re: Columbus Center

I guess Columbus Center isn't dead yet.

http://www.youtube.com/watch?v=Sh8mNjeuyV4&

 

[nedev18]

Re: Columbus Center

Awesomw clip, briv!

Anybody else have trouble believing this article?

 

[kz1000ps]

Re: Columbus Center

I believe it. I always trust what businessmen say.

 

[lawtown]

Re: Columbus Center

there should be more residential buildings like this in Boston

 

[TheBostonBoy]

Re: Columbus Center

LOL at the monty python clip
and ya that article brought some of my hopes back.. everyone seems to be soo confident about this and as long as Winn is confident and keeps the commitment, i feel optimistic about this.

 

[Ned Flaherty]

Re: Columbus Center

If Winn is but a contract employee of California, as you assert, he has NO ownership stake, he is NOT a partner, he is a mere serf to the vassals and lords in California, Macfarlane Partners and CalPERS.

Winn Development owned the proposal from 1996-2006, but sold it in 2006 to CalPERS-CUIP-MURC, which now funds and controls the venture. The several Winn people who are under contract to the new owners for completing the project are entitled to a very small share of some future profits, because they retained a very small share of ownership. But it is far too small to count on any matter for which a vote is taken.

In post #451, I bolded a quotation from Palmer's original article that stated that CalPERS had guaranteed the financing of the deck. Now you are asserting that CalPERS did no such thing. If CalPERS did not guarantee the deck, what did their $270 million buy?

The confusion arises from Palmer?s partly incorrect, partly incomplete, and now no-longer-true news article.

Firstly, the two CalPERS-CUIP-MURC-CWCC guarantees totaled $285 million, not $270.

Secondly, the guarantees were not merely for financing, they were for design, financing, construction, insurance, and on-time, trouble-free completion of the tunnels.

Thirdly, the guarantees never went into effect, because they were part of the abandoned lease amendment. Here?s what happened: California defaulted on the lease in 2006, then spent two years re-negotiating it, then agreed in early 2008 to a lengthy amendment, which by March was moving through state channels toward signatures. Shortly before the scheduled signing, California asked to add a 1.5-year delay into the amendment that it had already finalized, but never signed.

For details on all the above, just read the amendment, available from the MTA as outlined in prior posts.

In this order, over the last few weeks:
California asked to amend the amendment.
Massachusetts withdrew the amendment.
California threatened to abandon the project if Massachusetts didn?t guarantee its subsidies.
Massachusetts withdrew its subsidies.
California withdrew its crews and equipment.
Massachusetts (MTA, BRA) ordered the site secured and restored per the defaulted lease.
Columbus Center President Roger Cassin flew to California for a chat.

Tom Palmer?s Columbus Center reporting relies heavily on vocabulary and definitions that are dictated by the developers, but not fact-checked by the Globe. That?s how misunderstandings, such as this deck guarantee issue, arise. Yesterday, a wire service journalist was surprised to learn that no bank loan ever existed. In my conversation with him, it turned out that his misunderstanding arose from several of Palmer?s articles which misled readers to assume secured financing that ? in fact ? never existed at all.

 

[pelhamhall]

Re: Columbus Center

I again spoke to people involved with the Clarendon and sales activity is very strong over there. A successful Clarendon will do wonders to attract investors to Columbus Center. All that this project needs is some capital and it'll get moving again.

I drove around that area last night - what a war zone!! Between the Clarendon, the Bryant, the Lofts at the Salvation Army building, and Columbus Center pre-con work, everything is torn up and in a state of upheaval.

I feel bad for the neighbors in that area, yeah, even Neddy! That's a ton of construction. And, once these smaller projects finish up, Columbus Center will just be kicking into high gear - man, I'd hate to live in that area, it's going to be years of heavy, heavy construction and noise. Life's too short to give up 5-7 years to live in a massive, dense, loud, polluting construction zone, heck - I'd just pick up and move to someplace quiet if I lived right there...