Columbus Center: RIP | Back Bay

[Ned Flaherty]

Re: Columbus Center

[size=+2]Menino wants assurances from developers[/size]

[size=+1]Mayor seeks new rule after financial tie-ups[/size]

By Casey Ross ? Globe Staff ? August 21, 2008

Boston Mayor Thomas M. Menino wants to require developers of large projects to obtain financing before they win permission to dig up the city.

His call follows financial problems for two high-profile developments that have already begun construction in Boston: the $650 million redevelopment of the Filene's building in Downtown Crossing and the $800 million Columbus Center complex over the Massachusetts Turnpike.

Menino is having city planners devise a regulation that would delay approvals for developers who cannot show adequate financial backing to proceed with construction. The regulation is an attempt to prevent city streets from being at the mercy of credit markets that can suddenly stall or upend projects.

"We already have two or three holes in our landscape; we don't want any more," said Menino. "We don't want to stifle development, but we don't want developers to take advantage of the city."

The mayor spoke yesterday after the Globe reported that the developers of the 38-story commercial and residential tower on the former Filene's property have been unable to raise financing because credit markets have severely tightened in the wake of the subprime mortgage debacle.

The project is the cornerstone of Menino's effort to remake Downtown Crossing into a destination shopping district in the heart of the city. Almost a year after receiving city permits, the developers have only begun to excavate a portion of the site for its new foundation.

Menino and officials at the Boston Redevelopment Authority said they have been working on the policy for several days and that they were not spurred to action solely by Filene's or any other development. A draft of the regulation indicates that $12 billion in projects are currently under development in the city, and points out that many neighborhoods might have to put up with abandoned or vacant construction sites if tight credit markets continue to delay construction.

An executive with a leading development group said the mayor's regulation is unworkable and would have a chilling effect on future projects.

"It will become a barrier to development. The market just doesn't work that way," said David Begelfer, Massachusetts director of the National Association of Industrial and Office Properties. "To react this way because of the current abnormality in the credit market, I don't think is very prudent."

Other individual developers, including those for the Filene's and Columbus Center projects, declined to comment.

Lenders have been wary of making commercial real estate loans since the subprime mortgage crisis erupted last summer and caused heavy losses at investment banks and other financing firms.

The team trying to build the Columbus Center halted construction on the giant mixed-used complex this year after developers lost some of their private financing as well as some state subsidies.

The draft of Menino's regulation indicates that developers would have to show proof of financing within 18 months of city approval in order to move forward with construction. If they fail to do so, they would have to ask the city for an extension of their permits.

The Filene's project received its city approval in August 2007, while the Columbus Center project was approved in July 2003.

To take effect, the regulation needs the BRA board's approval.

The mayor said the policy would also help the city control the practice of "flipping," in which developers get approval for a project, carry out demolition and other site work, and then sell it for a profit.

"Too many times developers come in, get approvals, sit on it and make all the money off the city," Menino said. "It's an issue we have to get a hold of."

 

[pelhamhall]

Re: Columbus Center

Pick up a copy of South End News from one year ago, count the pages dedicated to real estate ads.

Pick up a copy next month and do the same count.

The unofficial boycott of real estate advertisers has begun - people in the industry are unhappy, and they have the right to be.

You simply cannot be considered a "news paper" when you allow these types of activities to occur on your pages. And if you exhibit a pattern of disdain towards the real estate industry, you should stop asking the real estate industry to subsidize your enterprise.

 

[Wocket]

Re: Columbus Center

Ironically, Winn Co. is still a regular advertiser.

 

[KentXie]

Re: Columbus Center

(2)because people fall for the ?costs went up? excuse and forget that sales went up, too;

I really think you should read a book about economics or take a class in that subject. Sure, the real value of the project has not changed, but the amount of dollars it takes to match that value does change. Higher price of a housing unit will lead to a lower demand because those in the price range of the original sales price will be eliminated from the market This is because they are 1) no longer able to afford it or 2) no longer willing to spend that amount of money for that unit. Inflation is out pacing the increases in wages for people and so they no longer have the same purchasing power that they had before. Please tell me you understand that.

 

[Ned Flaherty]

Re: Columbus Center

. . . Higher price . . . will lead to a lower demand because those in the price range of the original sales price will be eliminated from the market . . . because they are 1) no longer able to afford it or 2) no longer willing to spend that amount of money . . . inflation is out pacing the increases in wages

DarkFenX, all the above statements are generally true for average wage earners, but largely irrelevant for most of Columbus Center?s customers. _ The investor prospectus (given to California) and the banker brochure (given to subsidy agencies and lenders) both characterize the project?s customers as immune to the housing, wage, and inflation issues that affect everyone else.

Those documents confirm Columbus Center as:

? ?Boston?s premier address?
? ?world-class amenities like nothing Boston has ever seen?
? ?the ultimate in sky living?
? ?the city?s answer to Rodeo Drive [Beverly Hills] and Fifth Avenue [New York City]?

The issues you?re thinking of do exist, but not for people from Rodeo Drive.

 

[pelhamhall]

Re: Columbus Center

Advertisers sometime advertise to sell a product, other time to buy influence.

Winn & Company and all of their colleagues should really think about this in light of the constant "Neighbors Fear Shadows" articles that are generically milled through the printing presses, with only the names of the project and neighbor-whose-view-is-blocked changed.

Do people buy or rent condos anymore from a little free rag they get at the pizza shop?

Has any influence been bought with the constant drumbeat of "Shadows Anger Neighbors" articles? Where are the "Neighbors Largely Support Plan" articles? "In a neighborhood of 17,000 people, only 23 took the time to show up and complain about the project -almost all of whom will have their views directly impacted. When stopped on the street, almost everyone we showed the plans to shrugged and said 'looks good to me'" How about an article like that every now and then? How about some "reporting" instead of just calling Kressel or Waltz for a canned anti-progress quote that could be transfered to any development in the city?

Can the paper be considered credible for allowing a nutty professor WHO'S VIEWS WILL BE BLOCKED to write about a project as if he had some credibility? Especially when he is quoted making quite literally crazy comments about the cost of building over the pike not being any different than on flat land right here on this forum???

 

[Ron Newman]

Re: Columbus Center

I strongly disagree with the suggestion that a newspaper should give in to moneyed interests instead of covering all points of view within the community it serves.

 

[pelhamhall]

Re: Columbus Center

They don't cover all points of view - just one point of view "Neighbors Worry About Shadows, Height at XYZ Project"

That's the one, singular point of view they cover on all developments.

How about a follow-up article about the huge success of Atelier to counter the dozens, dozens of "Atelier Project to Destroy South End" articles that they ran during that process?

How about one article that simply states "Prudential Center Plan Gets Thumbs Up From Most" with a throwaway line like "there were a small handful of well-known activists who used their same complaints against 500 Boylston, 222 Berkeley, 299 Huntington, Copley Place, Trinity Place, 111 Huntington, etc, etc."

Instead "Prudential Center Towers To Cast Shadows Across Back Bay"

Please.

One point of view, and one point of view only. Maybe they can get the activists to pay for their business. Real estate firms should use their money more wisely.

 

[Tim Jackson]

Re: Columbus Center

The Turnpike Master Plan adopted in 2000 generously includes alternatives for every parcel. _ Whenever Parcel 16 exceeds 15 stories, a 2-acre public park is required on Parcel 18. _ Whenever Parcel 18 has no park, Parcel 16 is limited to 15 stories. _ There are plenty of options.

I don't consider that to be 'plenty of options.' Saying that the developer must create a 2-acre continuous park if Parcel 16 is above 150 ft. is very restricting and limits the potential of the proposals. Rather, having one or two smaller, more intimate parks is far more beneficial.

Of course, it all depends on the final product, the design, and how the parks are maintained, but a 2 acre park next door to the Public Garden and the Common is a little overkill, no?

 

[Ned Flaherty]

Re: Columbus Center

. . . Do people buy or rent condos anymore from a little free rag they get at the pizza shop?

South End residents and businesses do make decisions based on the content of the South End News, which has successfully carried real estate advertising from satisfied repeat customers for 29 years.

Can the paper be considered credible for allowing a nutty professor WHO'S VIEWS WILL BE BLOCKED to write. . . crazy comments about the cost of building over the pike not being any different than on flat land right here on this forum???

As I confirmed in April, the proposed project has been proven not to block my views, so there?s no problem there.

And regarding total development cost (acquisition + construction + financing + administration), MTA records show the total costs the same or less over air rights than for equivalent buildings over land. _ The mythical ?deck premium? does not exist. _ That is why the owners refuse to allow a public audit of their actual costs, revenues, profits, and subsidies.

Misunderstanding about this is common, especially among the hobbyist and student forum members, who mistakenly interpret ?total development cost? to mean only ?construction? cost. _ It also is common among people who ? because they are (or hope to be) part of the Columbus Center gravy train ? refuse to acknowledge what the public records show about cost, revenue, profit, and subsidy.

 

[Ned Flaherty]

Re: Columbus Center

I don't consider that to be 'plenty of options.' Saying that the developer must create a 2-acre continuous park if Parcel 16 is above 150 ft. is very restricting and limits the potential of the proposals.

Well before the Columbus Center proposal, the many private and public authors of the Master Plan decided that that requirement was not restrictive. _ The developers violated the Master Plan as soon as they realized they?d get far more profit if they replaced that public open space with a 663-car garage of $100,000 parking spaces.

Rather, having one or two smaller, more intimate parks is far more beneficial. . . a 2 acre park next door to the Public Garden and the Common is a little overkill, no?

Multiple smaller parks are sometimes better, sometimes not. _ But the proposed open space remains far below the required 2-acre total. _ And regardless of size, the proposed site is 5 city blocks south of the Public Garden, and 7 south of the Boston Common, not at all ?next door?.

 

[statler]

Re: Columbus Center

the many private and public authors of the Master Plan decided that

You know what other group of public and private citizens authored a Master Plan?

(Now that's how you Godwin a thread! )

 

[Wocket]

Re: Columbus Center

Ned,

As a student, hobbyist and a part of the CC gravy train all at once, you can understand my misunderstanding this completely. Can you more thoroughly explain how building a 30 story building over and operating interstate highway can equal or be less than building it on a vacant spot of land?

Now I imagine the easiest way to make these numbers work for you is to assume there is demolition (including foundations) involved in construction on land and adding on that cost as well as increasing acquisition costs, as developers still have to purchase the building and land, even if they plan to tear it down. Can you break this down for me?

 

[ArcaneAlchemy]

Re: Columbus Center

As a newer member of this board- but a long time reader, and further: as a "carpet-bagger" who has been educated and done work throughout my so-far short career in such places as the Rust Belt, Mid-Atlantic and South, I am consistently puzzled by the development process in Boston. I have tried to make sense of it on other threads, through discussions and the attendance of many, many public meetings for projects in Fenway, the South End, South Boston and more...

A few simple observations from mere personal experience would be best to point out, the first and most important of which is that this sort of fuss over growth does not occur at such a stringent and abrasive level in other major cities. I am reminded of NIMBY antics and anger of my childhood- when farmers in my community were selling there fields to be converted into 100 home developments... People were outraged and fought this tooth and claw- yet field after field went from corn or pumpkins or what-have-you, to homes. Interestingly though- while my neighbors cried for lost farm land in my youth, people in Boston seem content to weep for surface parking lots and highways dividing neighborhoods.

While I think of many projects in this city that are held up because of simple reactionary protest because of shadow-casting and such: I see many American values- especially those on property rights, being washed down the drain. Oh, the patriots of this nation such as Jefferson, Adams, Hancock and Madison must be spinning in their graves...

But- Columbus Center is a different creature, as the air right to the Turnpike truly to belong to the state/public...

Ned, while I respect your right to protest this project and while I acknowledge many of the points you have made over the months and years; I still must conclude that even if this project were 100% financed, built completely with green tech, and offered even more park space- letters would still be sent arguing the validity and merits of the development, using different points of contention.

I too- look at the gaping holes in our city and agree with the mayor that further oversight is needed from now on. I fear for the site of the old Filenes, and that it will sit vacant now. Additionally- one of my main points of contention and anger is the continued and astronomical gentrification of a city that regularly heralds itself as "inclusive", "progressive", and "diverse".

However, Columbus Center is without a doubt a marquee project. The citizens of Boston should be screaming to have the scar that is the Turnpike- removed from our urban landscape at any cost.

I commend your fiscal oversight, however I question whether it is based upon your interest for the tax paying public or the fact that you do not want to live next to such a "monstrosity".

At the end of the day- what I have noticed from my visits to so many meetings in this city, is that Boston is actually not very progressive at all. Fighting the height of every proposed skyscraper, obsessive neighborhood demands that minimize change, maintaining a so-called "quality of life", only supporting the most bland and passive of architectural designs... All of these things continually point to the fact that certain vocal residents of this city are not willing to accept the fact that they reside in a thriving urban center. Just as there is a difference between NIMBYs and "BEEARNs", there is a difference between proper planning oversight and semantics anchored in self-interest.

People should feel blessed to live in a city that has so many project proposals while other cities fight and scrape for just one in the horrible state of this market. Alas, I must say that I support my fellow board members in supporting this project nonetheless- while I don't necessarily trust large developers by any measure, the outcome of a project such as this is far more beneficial to the city than a large hole in the ground- even if it is a tower that casts horrible horrible shadows (oh, the humanity!) and houses the ultra wealthy (to my own dismay)...

The old patrician element of Boston that fights change to the level that we see on this board is a turn off for many developers- many of whom have told me this straight up when they say why they won't even commit to trying to do a project here in Boston... The majority of this city who support growth need to speak up, because reputations can kill.

This city deserve better projects and better architecture than the stumpy buildings that continue to be erected to appease the Neds of the world. Cities change and grow, if you don't like it- leave. There are plenty of beautiful brick rowhomes and such in Newburyport or even Washington, DC- where it is well known that nothing tall gets built. You would have enjoyed Philadelphia in the 60s-70's when nothing could be built above William Penn's hat on City Hall...

I whole-heartedly admit, I am not an expert on Columbus Center like Ned, who appears to have made a life of fighting development. But I have been around- and these type of shenanigans don't fly in New York or Philadelphia or Chicago. And I also know that it is outspoken patrician residents like Ned that will keep me from ever choosing to live in the "prize" neighborhoods of the South End and Back Bay. Need I remind you all- these places were swamps, filled-in in a landmark and earth-shattering way to accomodate and attract more people to an improved Boston. Ironically- it is people in these neighborhoods today who fight landmark, skyline changing or progressive developments who would bring in more people or improve the city.

Very ironic indeed..........

 

[pelhamhall]

Re: Columbus Center

It makes no sense to argue with that guy.

Building over a highway means a couple of things that people with no clue about real estate may not know:

1) The staging area - where is it? You can't stage on the highway. This becomes tricky and you have to lease/buy areas around the site to house your equipment. This is costly. Real estate in the vicinity of CC is not cheap.

2) Parking. Most skyscrapers dig the foundation and put the parking underground. You can't "dig" below the ramp. Therefore, you have two options. The first option is to build a secondary (and extremely costly) building to house the parking, which means building a second "deck" over a second parcel. The second parcel obviously needs to be purchased/leased. And this is not free. Your second option is to build the parking within the first 3-4 stories of the property. This kills the street life, and when the neighbors only allow you to build 30 stories, this means 10% of your building is now parking, not revenue-generating. You could ask to then build 33 stories, but the crazy people would bite your head off. It makes too much sense.

I could go on and on, but anybody with any clue whatsoever about real estate development already know all this. And I really don't think any of us are going to be able to convince that guy of much of anything.

You can always look at a spreadsheet and say "SF for SF, building on a highway and transit line is the same as building on that parking lot..." and you might be technically correct, but you would also be completely wrong.

His arguments are silly. He believes the management at Winn are laughing in some ivory tower, trying to steal our money. He believes this. It's so funny. They are just businessmen, trying to make a deal profitable. They are to be commended, not condemned for this. If they can't make it work, then they walk away. That's how business works. They're giving it their best shot, even in the face of shear lunacy. Good for them.

 

[Ron Newman]

Re: Columbus Center

Your third option is to radically reduce the number of parking spaces, maybe all the way down to 0.5 per unit, because the development is next to lots of public transportation of all kinds.

 

[pelhamhall]

Re: Columbus Center

That may be an idealistic view of the city in 20 years, but in 2008, you can't sell luxury condos without parking. Maybe cheap condos. Of course, with cheap condos, you can't afford to build the damn thing because the development won't cash flow.

Again, we're back to square one - it's incredibly challenging and expensive to build on a highway.

Duh.

 

[Ned Flaherty]

Re: Columbus Center

. . . explain how building a 30 story building over and operating interstate highway can equal or be less than building it on a vacant spot of land?

Hello, Wocket. I first mentioned total development cost savings on this Forum last August, and a few times since.

Three separate, professional organizations estimated the tunnel-basement-deck costs...

? $31 million per Hanscomb cost estimators (4 April 2002)
? $12 million per Columbus Center?s new owners (22 February 2006)
? $37 million per Lincoln Property fair-market-value appraisers (6 March 2006).

For a total development cost comparison between land and air, the cost of both buildings themselves can be skipped, since equivalent buildings (first floors and upward) have equivalent costs. _ That leaves, as the big differential, a tunnel-basement-deck construction cost of only $1.7 ? $5.3 million per acre at the 7-acre air rights site.

For a total development cost comparison, each site has to consider savings as well as costs. _ Demolition, excavation, contamination, and groundwater remediation all cost more on a land-based site than an air rights site, where such costs are negligible.

And acquisition costs more on land than in air. _ At urban Boston?s current rate for un-developed, un-contaminated, zoning-free land of $30 million per acre, these 7 acres anywhere else in town would cost $210 million. _ But MTA charged this developer only $12 million, generating a $198 million savings on property alone.

In total development costs, the savings to air rights developers ? in acquisition, demolition, excavation, contamination, and groundwater remediation ? leave an equivalent land-based project costing equal or more, thus destroying the myth of the developers? never-proven ?deck premium?.

That makes total development costs of air rights more lucrative than punitive, when comparing equivalent projects in the same neighborhood.

 

[kmp1284]

Re: Columbus Center

As I confirmed in April, the proposed project has been proven not to block my views, so there?s no problem there.

Prove it. I'd love to take your word for it but I can't. Take a picture, describe it in words, do a finger painting, tell us what direction on the compass your living room faces, whatever, just prove it.

 

[Ned Flaherty]

Re: Columbus Center

. . . people in Boston seem content to weep for surface parking lots and highways dividing neighborhoods. . .The citizens of Boston should be screaming to have the scar that is the Turnpike- removed from our urban landscape at any cost.

No one is on record praising the parking lots or highways. _ Boston?s citizens have been working toward tunneling the transportation corridor below and developing the space above for years. _ I am one of them.

. . . Ned, . . . I commend your fiscal oversight, however I question whether it is based upon your interest for the tax paying public or the fact that you do not want to live next to such a "monstrosity".

I never said I don?t want to live near air rights development, or called it a ?monstrosity?. _ Since moving next to the transportation corridor 18 years ago, I have always advocated for tunneling it over and developing it. _ That hasn?t changed.

But the current proposal is a monstrous betrayal of the public trust: _ no competitive bids, no financial disclosure, violations of the Master Plan, public parks converted to private gardens, and promises that the proposal would be built subsidy-free betrayed by the new owners threatening to walk if taxpayers don?t pay much or most of their costs and profits.

Cities change and grow, if you don't like it - leave.

Cites do change and grow, but not all change or all growth is beneficial. _ I chose to stay and work for the much better outcome that was always promised, and still is possible.

I whole-heartedly admit, I am not an expert on Columbus Center like Ned, who appears to have made a life of fighting development.

I don?t fight all development, or all air rights development, or all development at this particular site, but I remain critical of how the 13-year process has failed, when it needn?t have.

Your either-or proposition echoes the take-this-or-get-nothing mentality that was so often threatened by the developers. _ The public doesn?t have to choose between this proposal or nothing. _ What the overwhelming majority of citizens have said over many years is that all air rights should be developed: _ with competitive bids, from qualified developers, that comply with the Master Plan, with financial disclosure, and that a subsidy-free proposal needs to proceed without public money.

None of those 5 criteria were ever met. But the next developer at this site now has a good road map of what not to do.