Columbus Center: RIP | Back Bay

[Ned Flaherty]

Re: Columbus Center

. . . Columbus Center = 7 acres (Ned's estimate that I didn't check) . . . 343 Residential Units (including 15% affordable) . . . 191 Hotel Rooms . . . 1,063,930 sq. ft. . . .

Your 4 most important numbers are wrong.

Acreage ? You incorrectly wrote that Columbus Center?s 7 acres is ?Ned?s estimate?. _ But the 7-acre figure is neither mine, nor is it an estimate. _ The city?s Planned Development Area Development Plan itemizes the project as ?303,742 square feet, approximately 6.97 acres? (BRA, 19 November 2003). And California wrote in its latest subsidy application, signed under pains and penalties of perjury, that the project size is ?almost 7 acres?.

Housing units ? You incorrectly wrote that the housing units total ?343? and ?15%? (37 units) are affordable. _ But the latest lease is for 447 units, and only 10% are affordable.

Hotel rooms ? You incorrectly wrote that the hotel is ?191 rooms?. _ But the latest public subsidy application is for 162 hotel rooms.

Square footage ? You incorrectly wrote that the project square footage is ?1,063,930 s.f.?. _ But the latest lease is for 1,541,350 s.f.

Having under-counted 23% of the housing (104 units), over-counted 18% of the hotel rooms (29 rooms), and under-counted 31% of the project size (477,420 square feet), you may want to just start this over from scratch.

. . . the claim that is un-zoned . . . is misleading, because it is still only entitled to allow for what was approved.

No. _ By state law, turnpike air rights are un-zoned, so there?s nothing misleading about saying so. _ And a site where everything that gets proposed is already subject to zoning is far less valuable than a site where anything can be proposed because there is no zoning.

. . . Haywood Place is entitled to be 285% as dense as Columber Center! . . .

After correcting and re-calculating the 4 data points above, do you still say Haywood [sic] Place is ?entitled to be 285%? as dense as Columber [sic] Center? And if so, how do you arrive at that?

 

[Ned Flaherty]

Re: Columbus Center

Hayward Place is also in the Combat Zone . . .

No. _ Hayward Place is in an area of hotels, university offices, a Registry branch, first-run cinemas, and the Opera House. _ Your porn neighborhood no longer exists, because in 1974, the city began dismantling the Combat Zone via the BRA containment policy. _ All that remains today are 2 obscure bars, and they?re not at Hayward Place, which now is chock-a-block with tourist family hotels, shopping, and entertainment.

. . .This is an already approved project . . .

No. _ It was never fully approved, as shown in the 3,400-page lease, which lists 9 approvals obtained, versus 27 not obtained. _ The MTA never even approved the start of tunnel construction; last winter?s ?pre-construction site preparation activity? was a theatrical event staged to keep investor money flowing (that ploy failed) and to attract bankers (that failed, too).

 

[pelhamhall]

Re: Columbus Center

I imagine it'll be 12-18 months at least before Beal ratchets up construction there again. In the mean time, maybe you can spend some time creating some pretty charts about UFP levels or something?

There's really not much else to debate, it must drive you crazy to have lost this giant quixotic fight that has come to define much of your free time. Quite literally, after thousands of posts, thousands of hours of public meetings, and thousands of editorial words the net outcome is that you convinced absolutely nobody in any position of power to do anything.

The project is approved, ready to build, and enjoys widespread public support, most significantly from 73%-Approval-Rating-Menino. He's our mayor for life, you know.

 

[atlrvr]

Re: Columbus Center

With your numbers I get that Haywood Place is 196% as dense as Columbus Center, which still calculates to $19.3M per acre based on what is entitled for development.

My point about it being "unzoned" is that you are assigning a $5M per acre value. For my calculations above, I included your assumption, but I maintain that regardless of zoning, land value is based on what can be entitled for a specific parcel. Certainly you understand this distinction.

 

[Ned Flaherty]

Re: Columbus Center

. . . There's really not much else to debate . . .

Yes, there is much left to debate, including new issues that arose since the engagement of cost-cutting consultants. _ The unresolved issues you?re overlooking fall into 3 general groups:
● known issues already mentioned on this forum;
● known issues not yet publicized;
● known issues unlikely to ever be publicized but nonetheless affecting the proposal.

. . . you convinced absolutely nobody in any position of power to do anything . . .

That?s untrue. _ None of the owners, agencies, private firms, or elected officials who are affecting this proposal have any need to phone you when they do something, so of course you wouldn?t know what is done, by whom, or when, or how, or why. _ But people in power have already been persuaded to do plenty:

2006
● U.S. government denied a $60 million income tax credit subsidy ? the 1st time.
● All potential banks (Anglo Irish, et. al.) declined to lend even one dollar.

2007
● U.S. government denied a $60 million income tax credit subsidy ? the 2nd time.
● The Boston Globe opposed subsidizing the proposal.
● Massachusetts declined public funding because CC is 100% privately owned.
● The new owners (CalPERS-CUIP-MURC) turned off the cash spigot.

2008
● After spending $110 million but building nothing, site preparation halted.
● The former owner (Winn) ran out of cash.
● The Boston Business Journal opposed subsidizing the proposal.
● The Boston Herald opposed subsidizing the proposal.
● The South End News opposed subsidizing the proposal.
● The Banker & Tradesman opposed proceeding any further.
● The new owners declined the former owner?s appeals for more cash.
● Several national lenders declined to provide any replacement funding.
● Tentative Massachusetts subsidies were withdrawn.
● Potential new state subsidies were rebuffed.
● Tentative Boston subsidies were withdrawn or suspended by the state?s decisions.
● Potential new city subsidies were declined.

. . . The project is approved . . .

No, it was never fully approved. _ The latest 3,400-page lease lists 9 approvals obtained, but 27 not obtained.

. . . The project is . . . ready to build . . .

No, it?s not ready. _ The above-ground building plans were never done. _ And the below-ground tunnel/deck plans dated 3 February 2006 just got scrapped by the cost-cutting consultants, in favor of new, cheaper designs and construction techniques they now call ?platforms?. _ With no building plans, no new platform plans, and site preparation never finished, the project is nowhere near ?ready to build?.

. . . the project . . . enjoys widespread public support . . .

It doesn?t matter whether by ?public? you mean citizens or government, because either way, the support you imagine is gone now. _ The occasional citizen support seen years ago has all faded, with the only remaining voices coming mostly from those who are ? or hope to be ? part of the real estate industry gravy train. _ They?re entitled to their opinions, of course, but that group is too tiny to be called ?widespread public?. _ Likewise, public subsidy support from city, state, and federal government also has evaporated.

. . . the project enjoys . . . support, most significantly from . . . Menino

No. _ After 13 years, even the Mayor is tired of waiting. _ When asked if the City of Boston would consider another $40 million via a public subsidy called District Improvement Financing, Menino spokeswoman Susan Elsbree told the Boston Globe on 2 July, ?We will not.?

 

[Ned Flaherty]

Re: Columbus Center

With your numbers . . . I get that Haywood Place is 196% as dense as Columbus Center, which still calculates to $19.3M per acre based on what is entitled for development.

Well, then, we?re done with this portion of the air-versus-land cost comparison, because regardless of whether we use

your density-based fair market property value: 7 acres X $19.3 million = $135 million,
or my density-free fair market property value: 7 acres X $30 million = 210 million,

both values prove that the mere $12 million that this developer actually pays MTA results in total development cost that is less in air than on land.

. . . regardless of zoning, land value is based on what can be entitled for a specific parcel. Certainly you understand this distinction.

Yes, I do, and it?s precisely because of that ?what-can-be-entitled? distinction that un-zoned land qualifies for a price premium, and zoned land does not. _ Un-zoned property has unlimited commercial potential, whereas zoned property is far more restricted. _ Both values are further refined by whatever is finally approved, but right from the outset, un-zoned land has a larger and more valuable playing field of possibilities.

 

[pelhamhall]

Re: Columbus Center

You are exactly wrong.

With your face buried in outdated documents and fine print minutia, you are forgetting the bird's eye view level of how development gets done in Boston.

Go ahead and pick apart countless documents to support some fantasy alternative world, but since you are not involved with real estate development, let me put it to you bluntly - in this city, Boss Menino rules and Boss Menino wants this built. He's not tepid or cautious in his backroom support.

Therefore, with the financing in place - and this is the sole remaining and legitimate controversy - the green-lighted Columbus Center gets built.

Beal, with the hat of an outsider, will try to wrangle this financing debate before taking over the project. It should be a fun ride.

But with people like you and a handful of tin-foil hat anti-progressives on one side of the debate and Boss Menino and his Machine on the other side of the debate, you might want to consider getting a new hobby!

 

[BarbaricManchurian]

Re: Columbus Center

The rents of 1962 are interesting only to a historian, and are invalid for comparing today’s projects.

● Firstly, the construction methods are no longer the same, because the technologies of 1962 are not the technologies of 2008.

● Secondly, the rents are no longer the same, because markets, interest rates, nominal tax rates, effective tax rates, and a slew of other factors are very different now.

● Thirdly, if you’re trying to finish the research on the air-versus-land cost comparison, you can’t just compare air to air, because that’s no comparison at all; you have to compare an air site to a land site, with the same building on each one.

● Finally, you can’t just assume that air rights rent is whatever you hear in rumors on the street, because:

(1) MTA charges up to 12 different categories of air rights rent to a given tenant.
(2) Many of those 12 rents are substantial amounts but obscurely documented.
(3) MTA is notoriously secretive about air rights deals.
(4) Newspaper reporters usually just print whatever a developer claims; they rarely read the lease itself.

Be sure you read all the actual leases, and all the subsequent amendments, and find all the rent categories that apply at each property.

Which construction methods are different? And we tried comparing land-to-air before, but you rejected it (The Clarendon, which is as close of an comparison as you can get). And of course the rents for 1962 are different, it's called INDEXING FOR INFLATION. If you want to be even more accurate, you can adjust for all of the factors that you listed. It is a valid comparison, regardless of your ducking the question.

 

[KentXie]

Re: Columbus Center

Which construction methods are different? And we tried comparing land-to-air before, but you rejected it (The Clarendon, which is as close of an comparison as you can get). And of course the rents for 1962 are different, it's called INDEXING FOR INFLATION. If you want to be even more accurate, you can adjust for all of the factors that you listed. It is a valid comparison, regardless of your ducking the question.

According to Ned's argument, nothing can be compared to CC. Property value is different for each area and the size of the plot of land and obstacles that a developer may face is almost always different on each land regardless of the times. In other word, Ned can keep arguing his point since he knows that nobody can prove him wrong. Of course, nobody can prove him right either.

 

[Ned Flaherty]

Re: Columbus Center

Which construction methods are different?

The piles, belled caissons, and slurry wall proposed for use at Columbus Center in 2010-2012 are not the technologies proposed for Hynes Auditorium and Prudential Center in 1962. For details, re-read Columbus Center?s 246 pages of tunnel designs dated 3 February 2006.

. . . And we tried comparing land-to-air before, but you rejected it (The Clarendon, which is as close of an comparison as you can get). . .

No. _ I didn?t reject a land-to-air comparison; in fact, the only valid comparison is land-to-air. _ But a valid comparison has to compare the Columbus Center buildings on air versus the same buildings on land. _ It?s not valid to compare one set of buildings on air versus another set on land, as you wish to do. _ For the air-versus-land comparison to be valid, all factors have to be held constant, except the one being tested (air versus land).

 

[Ned Flaherty]

Re: Columbus Center

According to Ned's argument, nothing can be compared to CC. . .

No, that?s never been my argument. _ The only valid comparison for total development cost on air versus land has to compare the same buildings in air versus the same buildings on land. _ Both buildings can be expensive, moderate, or cheap, but it doesn?t matter which. _ If the same building is included in both the air model and the land model, then the total development cost at each site is easily seen, and the difference easily attributed to the only factor that changes: _ air versus land.

. . . Money and a better economic condition is all this project needs. . .

Columbus Center?s inability to proceed can?t be blamed on the availability of funds, because a very similar proposal just received loans totaling $650 million.

 

[Ned Flaherty]

Re: Columbus Center

[size=+2]More bad news for Columbus Center?[/size]

www.bankerandtradesman.com/issues/5_358/teller/201105-1.html

 

[JimboJones]

Re: Columbus Center

The B&T column is not accurate, or at the very least, misleading; Marty Walz (D-Moonbat) is on record as saying she supports Columbus Center but that she doesn't want it to be built with any public funding.

 

[KentXie]

Re: Columbus Center

No, that?s never been my argument. _ The only valid comparison for total development cost on air versus land has to compare the same buildings in air versus the same buildings on land. _ Both buildings can be expensive, moderate, or cheap, but it doesn?t matter which. _ If the same building is included in both the air model and the land model, then the total development cost at each site is easily seen, and the difference easily attributed to the only factor that changes: _ air versus land.

That's exactly what I said. When is there a place where the same buildings will be built both on land and on the air. Unless it is a twin building that has one being built on land and another built on air rights. That is what your argument basically means.

Columbus Center?s inability to proceed can?t be blamed on the availability of funds, because a very similar proposal just received loans totaling $650 million.

Besides the cost and the size of the building, nothing in these two projects are similar. One Franklin did not have to deal with NIMBYs complaining about the height, the block views, shadow, requirement to build a park, ventilation system, ground water drainage and etc. One Franklin is based in the middle of downtown where resistance is less and thus the project does not have to be dragged out nor hold as much public meetings as CC. In other words, it has a lower risk of losing money in this investment.

 

[pelhamhall]

Re: Columbus Center

Wow. That chart comparing an office building downtown to a complicated three-building complex over multiple turnpike parcels is absolutely stunning in its inaccuracy. A silly chart like that might work on the South End activist set, but you have to understand that this board is populated with people who actually work in various facets of commercial real estate development. Your silly little arguments carry no water here - this is the kind of stuff you should stick to South End News to publish.

The approved Columbus Center project is ready to go - ready to be built. It just needs financing. Financing is hard to get right now. All other arguments warrant nothing more than a yawn, a roll of the eyes and a deep sigh.

 

[TedG]

Re: Columbus Center

Besides the cost and the size of the building, nothing in these two projects are similar. One Franklin did not have to deal with NIMBYs complaining about the height, the block views, shadow, requirement to build a park, ventilation system, ground water drainage and etc. One Franklin is based in the middle of downtown where resistance is less and thus the project does not have to be dragged out nor hold as much public meetings as CC. In other words, it has a lower risk of losing money in this investment.

I agree that these two projects have nothing in common.

One Franklin is a financially feasible project with competent deveolopers that can actually get it built, which is why they were able to get financing.

Columbus Center, on the other hand, is a financially un-feasible project with incompetent developers who haven't been able to do anything in 13 years but push some piles of dirt around.

NIMBYism is not a criteria that banks look at when deciding whether or not to lend money to a project. There is no NIMBY question on any loan application I've ever seen.

Numerous forum members have been testifying that the project is "approved" anyway, so NIMBYism is not a valid issue or excuse at this point.

 

[Ned Flaherty]

Re: Columbus Center

. . . Marty Walz . . . is on record as saying she supports Columbus Center. . .

No, she is not. _ In an exclusive interview dated 14 January 2008, Representative Walz confirmed to Banker & Tradesman, ?I did not support approval.? _ That newspaper?s Columbus Center coverage, today and in the past, is accurate.

 

[Ned Flaherty]

Re: Columbus Center

. . . When is there a place where the same buildings will be built both on land and on the air. Unless it is a twin building that has one being built on land and another built on air rights. . .

You?ve completely forgotten that the purpose of this discussion is to compare total development cost in air versus on land. _ The same building does not have to actually be built twice, or even once, to do such a comparison. _ The discussion is about comparing total development cost under two scenarios to see the cost difference. _ The fact that the same building wouldn?t be built twice is irrelevant.

. . . One Franklin is based in the middle of downtown where resistance is less and thus the project does not have to be dragged out nor hold as much public meetings . . . In other words, it has a lower risk of losing money in this investment.

No. _ Unpopularity during the public review process never equates to chance for profit or risk of loss during the bank lending stage. _Bankers who are scoring an approved project ignore its popularity prior to the approval. _ They assess risk in order to determine how likely it is that the developer will repay all principal and interest on time, and the project?s value in case they have to repossess it, not how popular the proposal was prior to approval, or how long approval took.

 

[tobyjug]

Re: Columbus Center

I like this thread. It reminds me of the time that Stewie and Bertram had a big war.

 

[Ned Flaherty]

Re: Columbus Center

. . . The approved Columbus Center project is ready to go - ready to be built. It just needs financing. Financing is hard to get right now.

No. _ This proposal was never fully approved. _ The latest 3,400-page lease lists 9 approvals obtained, but 27 not obtained. _ The interior plans for the buildings don?t even exist. _ And MTA never approved the initial 2-year construction period for tunnels, because the owners couldn?t provide the $295 million in completion guarantees.

It?s true, the proposal needs financing, estimated at $800 million one year ago, and at least $840 million today because of inflation and the cost of the $110 million already spent.

The fundamental point remains: another luxury skyscraper proposal just borrowed $650 million a few blocks away, so California?s Columbus Center proposal has bigger, deeper problems than mere ?availability of funds? ? especially since the CalPERS-CUIP-MURC organization has up to $245 billion in assets, but decided last September to spend its money more wisely elsewhere. _ California?s Boston-based managers flew to California in April begging for cash, but came back empty-handed.

So no, the proposal is not ready to be built. _ On the contrary, all it?s ready for is a fire sale.

That?s because the former owners (Winn) ran out of money, the current owners (California) recalled their money, and potential future owners (Beal/Related) are trying to grab it for just pennies on the dollar. _ But Beal/Related can only grab it if someone else pays (loses) all the rest of each dollar.

Who would lose ? and how much ? and when ? and why ? has been the subject of sensitive debate that began when the owners defaulted on the lease 2-1/2 years ago. The owners wrote then that the proposal would die without a looser lease, lower rent, and larger subsidies, and they were correct.

Despite Beal?s previous commitments to reveal the prognosis in October, that announcement date has already slipped to January.