Pinnacle at Central Wharf (Harbor Garage) | 70 East India Row | Waterfront | Downtown

Status
Not open for further replies.
A bit off-topic, but how did IP go bankrupt? Was it due to the recession after the dot-com bubble? Too much high expensive debt?
Seems like a top-shelf building in the middle of a high rent, low vacancy, etc. area.
 
A bit off-topic, but how did IP go bankrupt? Was it due to the recession after the dot-com bubble? Too much high expensive debt?
Seems like a top-shelf building in the middle of a high rent, low vacancy, etc. area.
The primary financing for phase 1 and phase 2 of IP was the Teachers Insurance and Annuity Association (TIAA) (TIAA currently manages $1.3 trillion in assets.) The first phase got underway in 1983, the second phase in 1990. The construction financing loan for phase 2 was $268 million.

By 2004, TIAA decided to sell its stake in IP. It may have signaled earlier, in 2001, that it wanted out. Chiofaro had sought to re-finance IP starting in 2001.

2004 was also the start of a commercial real estate bubble.
This article shows that the commercial real estate price bubble was accompanied by a change in the source of commercial real estate financing. Starting around 1998, securitization became an increasingly significant part of commercial real estate financing. The commercial mortgage securitization market underwent a major shift in 2004, however, as the traditional buyers of subordinated commercial real estate debt were outbid by collateralized debt obligations (CDOs). Savvy, sophisticated, experienced commercial mortgage securitization investors were replaced by investors who merely wanted “product” to securitize. The result was a decline in underwriting standards in commercial mortgage backed securities (CMBS). The commercial real estate bubble holds important lessons for understanding the residential real estate bubble.
https://realestate.wharton.upenn.edu/working-papers/the-commercial-real-estate-bubble/

Chiofaro, on his own, was apparently unable to find a new lender to replace TIAA. Tishman Speyer stepped up, and bought the TIAA stake in IP at a discount. I'll let the Boston Globe take it from there.

Chiofaro files plan to skirt takeover. Recruits Prudential in bid to pay off loan on International Place
By Thomas C. Palmer Jr., Globe Staff | September 8, 2004

International Place developer Donald J. Chiofaro said yesterday a new partner will put a quarter of a billion dollars into his two downtown towers, a financial rescue that would reduce his ownership share considerably but stave off an impending takeover by his current lender.

According to a reorganization plan filed yesterday in US Bankruptcy Court in Boston, Chiofaro has enlisted Prudential Real Estate Investors of Parsippany, N.J., to put up $252 million and assume 90 percent ownership of International Place.

Chiofaro's current 40 percent equity interest would be reduced to 10 percent. Under the plan, the $650 million loan currently held by Tishman Speyer Properties of New York is to be paid off. Tishman is trying to gain control over the property through the loan.

Although the plan must be approved by the court and is likely to be opposed by Tishman in what could be a long legal battle, Chiofaro characteristically waved a victory flag yesterday.

"I love the idea of having an institutional partnership with the Pru," Chiofaro said in a telephone interview. "If you're going to defend the homeland against the marauders, it's not a bad idea to be standing on the Rock of Gibraltar."

The Rock is a symbol associated with Prudential Financial Inc. the new potential investors' parent company. In a brief statement, Prudential confirmed it signed a letter of intent to acquire International Place.

But R. Robert Popeo, chairman of Mintz Levin Cohn Ferris Glovsky and Popeo PC and lead counsel for Tishman, said the documents filed yesterday show Prudential is under no obligation to go through with the plan. "The letter says it's merely expressing interest in pursuing a possible investment," said Popeo. "It's nonbinding and creates no obligation on the part of Prudential to take any action whatsoever."

Chiofaro's International Place filed bankruptcy in May, seeking protection against Tishman's efforts to assume ownership. Tishman purchased Chiofaro's $650 million loan from Teachers Insurance and Annuity Association of America earlier this year, paying a discounted amount of about $595 million.

Chiofaro, who developed and owns the buildings jointly with Hillman Properties Inc., had been trying to find new investors since 2001, but his effort to recapitalize the towers was unsuccessful, and he was facing imminent default when he sought protection from the court.

He said yesterday the infusion of capital from Prudential will allow him to pay off the Tishman loan and own the 1.8-million-square-foot pair of skyscrapers with Prudential as his majority partner. Chiofaro said he would buy Hillman's current 60 percent ownership interest, though no agreement has been reached.

In court, Tishman's lawyers have argued that, though the face value of Chiofaro's note is $650 million, with penalties and interest and other costs that have accrued over the years, the amount he owes is tens or hundreds of millions more.

"It's either $650 million or $1.3 billion," Chiofaro said yesterday. "That will be the subject of the next fight." But, he added, "Prudential wouldn't make this commitment if there was any credence -- if it was over $650 million."

According to the documents and Chiofaro, Prudential will invest $252 million, the new ownership team will borrow $421 million, and one of Chiofaro's firms will contribute another $28 million. That $701 million is enough to pay off Tishman, Chiofaro said.

Chiofaro said he had talked to 20 potential financial partners, narrowing the field down to a dozen before he chose Prudential.

"We negotiated all weekend. It went right down to the wire," he said. "I didn't even go to a Red Sox game."

One of the major issues in dispute in the bankruptcy case is how much the buildings are worth on the market -- and whether that is more than the amount he owes. Chiofaro would not address the issue, but said the plan would put him in possession of 10 percent of whatever that is. He also said that under a formula agreed to by Prudential his interest could increase to 30 percent in a few years.

http://archive.boston.com/business/articles/2004/09/08/chiofaro_files_plan_to_skirt_takeover/#:~:text=Chiofaro's%20International%20Place%20filed%20bankruptcy,amount%20of%20about%20%24595%20million.
 
Some more candidate comments in the debate last night:


On a related note, performative environmentalism at its best:

View attachment 13333

Yes, we need to create more open space right next to a mile+ stretch of open space that was just developed, also ignoring 101 Economics completely. I agree, people like this need to be called out.
 
What was the status of the "Blue Way"? Is that still conceptual?

----

Some more candidate comments in the debate last night:


Tosh33 still in the comment section and still advocating for imploding 65 Martha Rd :ROFLMAO:... Brought back flashbacks...
 
For those who have the stomach for it, there’s yet another public hearing tonight at 6 to discuss the harbor planning, specifically, the need to not throw out six years of planning. I’ll be joining.

Tuesday, June 8, 2021, 06:00 PM
https://us02web.zoom.us/meeting/register/tZwrf-2trzMsGdOUdUM7aScxTDnHOTypl4b3

After registering, you will receive a confirmation email with the information needed to join the meeting.
 
And would you look at that, Don Chiofaro himself is in attendance!
1623190657513.png
 
Public Input Request from Chiofaro & Co (from an email I received):


"We have two new updates to share with you.

1. We need your help. As you may have heard, a recent Superior Court decision called into question thirty years of coastal planning across Massachusetts on process grounds, and the Department of Environmental Protection is currently pursuing a regulatory fix. The approved Downtown Waterfront Municipal Harbor Plan is an inclusive plan that leverages development to increase public access to Boston’s waterfront and improve climate resiliency -- and it’s under attack. Trashing the plan and starting from scratch will set progress back years, while the ocean laps at our front door.

We have created a form letter on our project website to share support for the MHP process, telling DEP to confirm the Downtown Waterfront MHP along with every other locally-crafted harbor plan adopted statewide. Please follow the link below and complete the quick and easy form to communicate this important message to the city and state. Feel free to tailor your comments as you see fit!

https://www.pinnaclecentralwharf.com


2. We are pleased to announce that we have partnered with the North End Music and Performing Arts Center (NEMPAC) to launch a Summer Pop-Up on the Waterfront at the Harbor Garage. This location will provide affordable, high-quality arts programming and performances for the surrounding neighborhoods through July and August. The pop-up will launch on July 6th. Stay tuned for opening details.

https://nempacboston.org/nempac-unveils-summer-pop-up-on-the-waterfront-new-creative-home-for-safe-socially-distanced-arts-programming-for-families-this-july-and-august/


Thank you for your continued support and valuable feedback. Make sure to follow us on social media for more community updates and ways to support our #AdvanceBostonsWaterfront Campaign @chiofaroco / @pinnaclecw.

The time to Advance Boston’s Waterfront is now.

Thank you,

The Chiofaro Company"
 
Another day, another column from Shirley Leung parroting some party's POV... This time with the aquarium.


Already felt a gag reflex once I saw Shirley's name. What a puppet and a muppet.
 
Another day, another column from Shirley Leung parroting some party's POV... This time with the aquarium.


Interesting how Leung fails to mention that the project the Aquarium hypocritically opposes would erect a raised table against sea level rise and vastly reduce built area on the waterfront, and that the Aquarium has partnered with the selfish elites who occupy the Harbor Towers to fight the project.

What a shill. Both she and Spruill need to be out on their ears.
 

“The false dichotomy is that it’s either a 600-foot tower or a parking garage,” Spruill said. “There are a million other scenarios that could improve that area.”

Then propose one, raise the millions in financing to build it, and execute on it, Vikki.

The only false premise I see around here is that tall buildings are somehow incompatible with the waterfront. I have no idea where that notion came from, but everyone quoted in here seems to have adopted it like gospel. Sounds like pure NIMBYism to me, though.

If you support redoing the Municipal Harbor Plan, you support this garage staying in place for another decade. That's the plain truth. CLF? Supports a garage. Spruill? Supports a garage. Six other environmental groups? Support a garage. Michelle Wu? Supports a garage. Every one of these people and groups needs to be held accountable for this in plain terms. The environmental community of Boston has banded together to maintain a car-first waterfront in direct violation of all of their supposed principles and for no good reason I can perceive except some form of corrupt, blind self interest.
 
The only false premise I see around here is that tall buildings are somehow incompatible with the waterfront. I have no idea where that notion came from, but everyone quoted in here seems to have adopted it like gospel. Sounds like pure NIMBYism to me, though.

It's the best argument they have which is why they're all singing it, and its an easy message to sell to the wider public who won't research it much beyond the surface of "protect our waterfront - tall buildings and greedy developers bad". They know exactly what they are doing at this point.
 
It's the best argument they have which is why they're all singing it, and its an easy message to sell to the wider public who won't research it much beyond the surface of "protect our waterfront - tall buildings and greedy developers bad". They know exactly what they are doing at this point.

You're right, but the argument's crap, and it's a disgusting, cynical strategy.
 
The best solution for the majority of Bostonians and visitors is one that minimizes the ground-level footprint, and, therefore, maximizes waterfront access and sightlines. If you minimize ground-level footprint, you make up for it with height. It's not a false dichotomy, it is an actual dichotomy. And if you polled a majority of Bostonians about which side of this dichotomy works best for them, I'd be willing to bet they'd select "small footprint with height" rather than big fat thing that blocks the water.
 
At this point if it's not already a dichotomy - I would create it if I'm Chiofaro. Either allow this project that was conceived after 5 years of planning or it will remain an extremely profitable parking garage going forward. Does these councilors think he's going to engage in a new round of planning from square one, one that guarantees lower height, less profit, and a whole host of new community concessions? Please. Enjoy the garage councilors, rates are going up too.
 
At this point if it's not already a dichotomy - I would create it if I'm Chiofaro. Either allow this project that was conceived after 5 years of planning or it will remain an extremely profitable parking garage going forward. Does these councilors think he's going to engage in a new round of planning from square one, one that guarantees lower height, less profit, and a whole host of new community concessions? Please. Enjoy the garage councilors, rates are going up too.

Yeah, if I'm Chiofaro at this point, I put up a giant banner on the side of the garage that says "The following people want this garage to be here forever. Go ask them why."
 
I hope Chiofaro reads this forum...
No idea, but reading between the lines of his statement, I'd say he very much has this idea in mind. Basically he said too much time had gone in to the previous process, which was extensive, transparent, and complete. He does not sound inclined to go through that process again.
 
Status
Not open for further replies.

Back
Top