Columbus Center: RIP | Back Bay

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Developer disappointed with Mass. Turnpike offer
December 21, 2006


THE REGION
Columbus Center developer Arthur Winn, seeking more favorable terms on his lease with the Massachusetts Turnpike Authority so he can get started on the $650 million mixed-use project over the turnpike between the South End and Back Bay, said he was disappointed in a package that the Turnpike Authority gave him. "We did not get what our equity partners asked for or what they needed to guarantee that this project will go forward," said Alan Eisner of WinnDevelopment . Winn, facing a funding gap of up to $25 million, recently secured an additional loan from Mass. Housing and had sought to defer lease payments to the Turnpike Authority, in exchange for an increase in those payments later. Turnpike officials would not comment. (Thomas C. Palmer Jr.)




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Any more stalling, and the Turnpike should de-designate this developer and take new bids from someone who actually wants to build.
 
Maybe they shouldn't have bid on the air rights if they didn't think they had enough money to build? In some ways, this reminds me of the Mass Hort fiasco.
 
Dude...let's drop the "you're so dumb" crap.

The public benefits do add to the cost, but I would argue that it is reasonable for the City to put them in the development guidelines as a way to guarantee a development that provides high quality of life. The trick is to make sure the project gets built, since the high quality of life guaranteed by the public benefits is moot if there's no development.
 
This is a discussion forum where people exchange ideas. If you aren't mature enough to handle it don't post here.
 
Hate to keep this going, but the "occasional" insult is become a "frequent direct attack." Very annoying and immature.
 
Lets get back on topic gentlemen.

Anyways, is this something that would make the developer reconsider building this, or is the columbus center getting built no matter what?
 
Press release on the BRA website. Thought it was worth posting here.

City of Boston Wins Approval to Expand Empowerment Zone

Turnpike Air Rights Development Parcels Are Now in the ?Zone?

The City of Boston today announced that the U.S. Department of Housing and Urban Development (HUD) recently granted approval to expand Boston?s Empowerment Zone (EZ.) The city?s EZ will now include all parcels identified as Turnpike Air Rights developable parcels ? specifically, the air rights above the Massachusetts Turnpike described as Parcels 4 through 22 in the City?s ?A Civic Vision for Turnpike Air Rights? document. The city?s EZ, administered by Boston Connects, Inc. (BCI), links residents and neighborhoods to greater economic opportunity through job creation and skills training. The approval is a huge win for the city as it will go far in providing numerous job opportunities for EZ residents and allow for new businesses located within the new zone to take advantage of the EZ tax credits and bonds. Projects built using these air rights will now be directly linked to job opportunities for neighborhood residents.

Boston?s EZ includes 6.8 square miles of some of the City's most vibrant and diverse neighborhoods. Its nearly 60,000 residents, roughly 10% of the City's population, live in Chinatown, Dorchester, Jamaica Plain, Mission Hill, Roxbury, the Seaport District, South Boston, and the South End.

The approval also allows for the City to add portions of already-developed air rights directly above the Turnpike. This area includes sections of Parcels 15 and 16, which includes pieces of the Hynes Convention Center, Prudential Center, Copley Mall and the John Hancock Center parking garage.

One of the cross-cutting goals of empowerment zones is to increase the number of job opportunities for EZ residents. To implement this goal, the federal government has made both wage and other business tax credits available to businesses located within the EZ. These businesses can take advantage of one of the EZ tax credits and claim up to $3,000 annually for each EZ resident they hire. Additionally, the City can issue bonds to make low interest loans to businesses located in the EZ for financing properties within the zone. For a full listing of the credits and bond opportunities visit www.bostonez.org and click on ?tax credits.?

BCI is a 501(c)(3) non-profit organization in charge of implementing the long-term vision of the EZ ? providing for economic self-sufficiency for individuals, families and communities. Under the leadership of a 24-member governing board, BCI has been successful in linking some of the City's most needy residents and neighborhoods with new economic
opportunity-through job creation, daycare, skills training, alternative education or ESL. Since its inception, BCI has invested more than $14 million in programs and services, more than $64 million in EZ Bond financing and another $42 in EDI/HUD 108 dollars for a total $106 million investment in Boston?s EZ.

Press Contact: Jessica Shumaker, BRA, 617.918.4446.



Release Date: February 12, 2007
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This is awesome!

This is great news ... if you're an employer with offices or retail space at the Prudential Center or in the John Hancock Tower.

The approval also allows for the City to add portions of already-developed air rights directly above the Turnpike. This area includes sections of Parcels 15 and 16, which includes pieces of the Hynes Convention Center, Prudential Center, Copley Mall and the John Hancock Center parking garage.
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That's awesome! Because no one needs tax credits like insurance companies, law firms, shoe stores, dress shops, and banks!

From HUD:

Businesses located in the Empowerment Zone can claim up to $3,000 annually for each Zone resident who has been employed for at least 90 days. Businesses can claim this credit for both new or current employees.

To claim the maximum credit, businesses must spend at least $15,000 on qualified wages and certain training and educational expenses paid or incurred on behalf of a Qualified Zone Employee. For those employees earning less than $15,000, businesses can claim a 20% credit on the annual employment expense. Click here to view IRS Form 8844 & Instructions and click here to determine if a particular address is in the Empowerment Zone.
 
Actually, no. This is great news if you're trying to build a hotel. The passage worth quoting is this one:

the City can issue bonds to make low interest loans to businesses located in the EZ for financing properties within the zone.
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And the relevant web page is not HUD but the one linked to in the press release. These two bits of info come from there:

Crosstown Center, Crosstown
This multi-use complex will open mid 2004 at the corner of Massachusetts Avenue and Melnea Cass Boulevard. Phase I will include a 190-room hotel, over 15,000 feet of ground-level retail space, and a parking structure. Phase II will include offices and additional parking.

Upon completion, Crosstown Center will employ approximately 1500 workers.

The Boston Connects, Inc. Board has voted to support the use of $5 million in HUD 108/EDI loans and grants and $48 million in bonds to the Crosstown Center. In addition the Board will in vest $7 million as equity toward the construction of the hotel and garage.
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Best Western Roundhouse Hotel, Newmarket
In early 2001 the Best Western Roundhouse Suites Hotel opened at 891 Massachusetts Avenue, the first hotel in an Empowerment Zone in the Northeast. Built in 1875 by the Roxbury Gaslight Company to store coal gas for city streetlamps and residential lighting, the building has been a warehouse since about 1906, although it has been largely vacant since the 1980s.

The abandoned former warehouse, known both as the Gasometer and the Roundhouse, retains the building's distinctive domed metal roof and each of the 92 two-room suites enjoys a view from the rounded exterior wall. An estimated 90 jobs were generated during construction and the hotel itself has created around 31 full-time and 10 part-time jobs.

The new hotel is expected to generate an estimated $150,000 in real estate taxes. The primary developer was WNW hospitality, who has earned a reputation for preserving local buildings and revitalizing underutilized properties, particularly those that are in severe stages of decay.

Total Development Cost: $10,000,000
EZ Bonds: $8,000,000
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That's not enough ...

These things would be built, no matter what.
 
The Boston Courant said:
Columbus Center Stick in Neutral

by Adam Martignetti - Courant News Writer
April 7 - April 13, 2007

A revised lease agreement with the Massachusetts Turnpike Authority (MTA) has not jump started the $650 million Columbus Center air rights project, which remains stalled by financial trouble.

A spokesperson for WinnDevelopment said there is no timetable to begin construction on the project, which received approval more than a year ago. Columbus Center, a mixed-use development consisting of a hotel, office space, retail space and housing, will be built on air rights Parcel 16, 17 and 18 over the Turnpike east of Back Bay Station.

"The project remains on hold while the financing is worked out," said Alan Eisner of Regan Communications. "The status quo hasn't changed in recent weeks."

This winter, WinnDevelopment received a new lease from the MTA which allows the developer to defer upfront payments in the exchange for larger ones in the future. Eisner described the arrangement as "revenue neutral" for the Turnpike Authority.

Columbus Center may also receive federal tax credits through the Department of Housing and Urban Development's Empowerment Zone program, which encourages businesses to employ local residents. The City of Boston petitioned the government to make the entire stretch of air rights over the Turnpike eligible for Empowerment credits.

"It doesn't guarantee us tax credits, it just gets us in the mix," Eisner said.

Despite those potential financial benefits, Columbus Center is not any closer to breaking ground, due largely to construction costs that are increasing by as much as 20 percent per year. For example, the cost to build the concrete and steel deck to cover the Turnpike has escalated from $30 million to $140 million since the project was first conceived, eisner said.

The costs of the public benefits for the project, which include three public parks, affordable housing both on and off site and workforce development payments, may also increase beyond the original estimate of $40 million, eisner said. The final project cost could increase to as much as $700 million, depending on financing.

WinnDevelopment's lone equity partner in the project, the California Public Employees' retirement System, issued a statement in August saying that Columbus Center was in danger of not being built.

"Anything and everything is being explored at this point," Eisner said. "We're still optimistic, but a lot of things need to fall into place."
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Huh?

Did you type this story in? Courant's not online, is it?

Are you the reporter?
 
Ahh that made me laugh so hard, Statler.

So uh, hey Briv: when do I start getting paid?? :wink:
 
kz1000ps said:
Columbus Center is not any closer to breaking ground, due largely to construction costs that are increasing by as much as 20 percent per year. For example, the cost to build the concrete and steel deck to cover the Turnpike has escalated from $30 million to $140 million since the project was first conceived, eisner said.

The costs of the public benefits for the project, which include three public parks, affordable housing both on and off site and workforce development payments, may also increase beyond the original estimate of $40 million, eisner said. The final project cost could increase to as much as $700 million, depending on financing.

WinnDevelopment's lone equity partner in the project, the California Public Employees' retirement System, issued a statement in August saying that Columbus Center was in danger of not being built.

"Anything and everything is being explored at this point," Eisner said. "We're still optimistic, but a lot of things need to fall into place."
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Columbus Center: the sick man of Boston. They have to run as hard as they can just to stay in the same place.

Thank you, NIMBYs, for having wasted the best project in recent memory.
 
Was it really NIMBY's though? It looks to me like it had more to do with changing economic conditions along with the expensive engineering challenges. That's not to say there weren't people against it but I'm sure most people would have favored development over a highway.
 
Yup it is. Had the NIMBY not fought so hard for unreasonable reasons to stop this project, it would have been underway by now when construction cost was cheaper. I still remember the FAA concern. It was as ridiculous as it can be. The construction of the CC may cause cargo planes to carry less cargo due t othe fact it needs to climb higher and having a lower total weight is require to achieve that height. This would be reasonable had CC be located in South Boston and not right next to the 790 FEET JOHN HANCOCK TOWER RIGHT ACROSS THE STREET.
 
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