SAV-MOR Site Lab Building | 15 McGrath Highway | Somerville

Ruairi said:
With a Jumbotron for witty banter.
seriously tho are there any consequences for mothballing a project like this?
Click to expand...
Legal consequences? No.
Financial consequences? Yes, but only to the developer. If they had a tenant -- which they don't -- then the financial consequences might be greater.

The developer will be required to secure the site, and probably drain any standing water.
 
stellarfun said:
Legal consequences? No.
Financial consequences? Yes, but only to the developer. If they had a tenant -- which they don't -- then the financial consequences might be greater.

The developer will be required to secure the site, and probably drain any standing water.
Click to expand...
So theres no incentive for them to do anything other than maintain their hole in the ground?
They move out businesses and put in a hole and then just figure the markets not right, hole it is!
This kinda crap really annoys me and seems to happen around the less desirable parts of Somerville way too often.
 
Ruairi said:
So theres no incentive for them to do anything other than maintain their hole in the ground?
They move out businesses and put in a hole and then just figure the markets not right, hole it is!
This kinda crap really annoys me and seems to happen around the less desirable parts of Somerville way too often.
Click to expand...
Given that the city itself owns one of the biggest abandoned lots at Gilman Square, I don’t have much hope of them addressing vacant properties.
 
Ruairi said:
So theres no incentive for them to do anything other than maintain their hole in the ground?
They move out businesses and put in a hole and then just figure the markets not right, hole it is!
This kinda crap really annoys me and seems to happen around the less desirable parts of Somerville way too often.
Click to expand...
Harvard left a much, much bigger hole in the ground when it started construction of its new science and engineering building on Western Ave., then stopped it. The excavation was covered IIRC. The building complex was then re-designed, and built when Harvard could again afford it.

That they did not construct a slab to cover the hole leads me to think that the site will be re-purposed to some other use.
 
Badusername said:
Given that the city itself owns one of the biggest abandoned lots at Gilman Square, I don’t have much hope of them addressing vacant properties.
Click to expand...
True.
Gilman square just seems like a wasted opportunity but I think the holmes (sp?) that was demolished was vacant anyway (and structurally questionable)
I know there was no architectural merit to the low rise block savmor was on but at least there was some life there.
Same with cobble hill
or the old taco Loco on broadway
Then theres the buildings bought by developers and let rot, like East End Grille and the old bakery.
I'm sure each site has it's excuses lined up and ready to go
but it seems like developers have no qualms about buying up sites, killing any activity on them and sitting on them.
 
Ruairi said:
but it seems like developers have no qualms about buying up sites, killing any activity on them and sitting on them.
Click to expand...
If it makes you feel any better that is literally the last thing developers want to do. Like most people, they too have an aversion to throwing good money after bad. They participate in a market, they do not control the market. They DO however espouse ideas of 'time being of the essence' before review boards and local authorities recognizing full well it falls on deaf/disinterested ears. I like to imagine that they do this in spite of its futility because there is no post-approval public meeting for an 'I told you so'; but then again, there are none sympathetic to their cause.
 
Badusername said:
Given that the city itself owns one of the biggest abandoned lots at Gilman Square, I don’t have much hope of them addressing vacant properties.
Click to expand...
Preach. What the city is (isn't) doing with Gilman is criminal. In fact, literally. If the state ever decided to actually enforce the MBTA Communities Act, Somerville would have to do something with that lot (something the surrounding community was promised would happen, post-GLX).

Ballantyne is flat-out terrible.
 
Ruairi said:
True.
Gilman square just seems like a wasted opportunity but I think the holmes (sp?) that was demolished was vacant anyway (and structurally questionable)
I know there was no architectural merit to the low rise block savmor was on but at least there was some life there.
Same with cobble hill
or the old taco Loco on broadway
Then theres the buildings bought by developers and let rot, like East End Grille and the old bakery.
I'm sure each site has it's excuses lined up and ready to go
but it seems like developers have no qualms about buying up sites, killing any activity on them and sitting on them.
Click to expand...
The Homans Building.
 
Rosarino said:
If it makes you feel any better that is literally the last thing developers want to do. Like most people, they too have an aversion to throwing good money after bad. They participate in a market, they do not control the market. They DO however espouse ideas of 'time being of the essence' before review boards and local authorities recognizing full well it falls on deaf/disinterested ears. I like to imagine that they do this in spite of its futility because there is no post-approval public meeting for an 'I told you so'; but then again, there are none sympathetic to their cause.
Click to expand...
nonsense. They could shift to residential in the morning but they're sitting tight to see what the market does and see what makes the most money.
Meanwhile the neighborhood is left with a hole in the ground.
Any wonder there are none sympathetic to their cause.

Also, didnt take a rocket scientist last year to see that the lab space market was saturated but this lot plowed ahead.
 
stellarfun said:
Harvard left a much, much bigger hole in the ground when it started construction of its new science and engineering building on Western Ave., then stopped it. The excavation was covered IIRC. The building complex was then re-designed, and built when Harvard could again afford it.

That they did not construct a slab to cover the hole leads me to think that the site will be re-purposed to some other use.
Click to expand...
"Harvard left a much, much bigger hole in the ground when it started construction of its new science and engineering building on Western Ave., then stopped it. The excavation was covered IIRC. The building complex was then re-designed, and built when Harvard could again afford it........"


1721412618689.png


www.cbsnews.com

How rich is Harvard? It's bigger than the economies of 120 nations.

Ivy League colleges built massive endowments partly through alumni donations. Some gifts have come under threat amid turmoil over antisemitism.
www.cbsnews.com www.cbsnews.com
MONEYWATCH

​

 
shmessy said:
"Harvard left a much, much bigger hole in the ground when it started construction of its new science and engineering building on Western Ave., then stopped it. The excavation was covered IIRC. The building complex was then re-designed, and built when Harvard could again afford it........"


View attachment 52908

www.cbsnews.com

How rich is Harvard? It's bigger than the economies of 120 nations.

Ivy League colleges built massive endowments partly through alumni donations. Some gifts have come under threat amid turmoil over antisemitism.
www.cbsnews.com www.cbsnews.com
MONEYWATCH

​

Click to expand...
This all happened not so long ago, probably when you were living elsewhere, if I recall your past geographic references. Some have pointed the finger at Larry Summers.

From Harvard magazine, Jan-Feb 2010
UNDERSTANDABLY, the Harvard University Financial Report for fiscal year 2009, published in mid October, is dominated by the plunge in value of the endowment (see “$11 Billion Less,” November-December 2009, page 50). But it also documents previously undisclosed blows to the University’s fisc, notably including:

  • $1.8 billion of losses incurred in the “general operating account”—the principal cash funding mechanism for University operations—where assets, invested like the endowment’s, absorbed proportional declines in value; and
  • additional losses, which may ultimately exceed $1 billion, on Harvard’s interest-rate swaps associated with its borrowings.
The deflation in Harvard’s investments extended beyond the endowment (valued at $26 billion this past June, down from $36.9 billion at the end of fiscal 2008). The report draws attention to losses in the “University’s portfolio of pooled cash balances” or General Operating Account (GOA)—the funds used to pay the bills. This asset pool receives, manages, and disburses cash balances held by Harvard’s schools, academic centers, and the administration, but many of its assets have been invested alongside the endowment in what is called the General Investment Account—a step meant to generate returns far exceeding those of money-market instruments. In recent years of strong investment returns, that strategy benefited contributors and users of the funds. But during the past fiscal year, falling and illiquid markets produced losses of $1.8 billion.

Changes in accounting and financial reporting make it difficult to ascertain the disposition of GOA funds over time—and more detailed explanations have not been forthcoming. But it appears that GOA net assets doubled during the decade, to about $6.6 billion in fiscal 2008. During that time, the University sums reported as cash and short-term equivalents held roughly constant at between $1 billion and $2 billion in most years, while “funds functioning as endowment,” from all sources, more than doubled—peaking at about $9 billion in fiscal 2008; GOA assets accounted for within “pooled general investment net assets” (as first reported for fiscal 2005) rose from $3.4 billion then to peak at about $5.5 billion in fiscal 2008.

Although a decision was made during fiscal 2008 to “reduce the risk profile of the University’s pooled cash investments,” and implementation had begun, according to the financial report, the chaos that erupted in the fall of 2008 disrupted that transition and made it impossible to shield the GOA.

The decline in the value of investments, payments on swap losses and the infusion of the remaining proceeds from new debt offerings (see below), and other fund flows combined to reduce the GOA’s net asset balance to $3.7 billion at the end of fiscal 2009 from the $6.6 billion of a year earlier. The $11-billion decline in the value of the endowment is thus only part of the story: the value of Harvard’s net assets overall declined from $44.2 billion to $30.1 billion. And the decline in the GOA, like the loss of endowment value, represents a further reduction in wealth and future income.

In an October 17 Boston Globe story headlined “Harvard admits to $1.8b gaffe in cash holdings,” reporter Beth Healy quoted a statement from University treasurer James F. Rothenberg to the effect that responsibility for the investment decisions and resulting losses in the GOA did not “sit with a single individual: the Corporation plays a role, the University’s financial team, including the CFO, play a role, and I play a role as treasurer.” (Neither her article nor Steven Sayre’s October 20 Globe column, “More red than crimson,” on sound cash management, appeared in the daily electronic news links circulated within the University.)
Click to expand...
https://www.harvardmagazine.com/2010/01/harvard-2009-financial-losses-grow

Emphasis mine.
In short, Harvard was so ill-liquid that it had to issue bonds to pay for the day-to-day operating expenses of the university. Having no money to pay for new construction, such as the Science and Engineering building on Western Ave in Allston, Harvard slowed and then stopped construction of that project.. IIRC, the general contractor finished the foundation walls, and constructed a slab over the excavated hole. And that was the status of the project for over half-a-decade. In the interim, the architect did a fundamental rework of the design, and the finished complex of today little resembles the project on which construction was stopped.

I did a bit of Googling, and the general timeline is this:
Construction started in 2007.
Construction stopped in 2009.
Construction resumed in 2017, after a basic re-design.
Construction completed in 2021.
 
Ruairi said:
nonsense. They could shift to residential in the morning but they're sitting tight to see what the market does and see what makes the most money.
Meanwhile the neighborhood is left with a hole in the ground.
Any wonder there are none sympathetic to their cause.

Also, didnt take a rocket scientist last year to see that the lab space market was saturated but this lot plowed ahead.
Click to expand...
How unserious a comment.
Please excuse us as we proceed to ignore land use controls, time value of money, economics, etc to subsidize a non-financially viable alternative out of benevolence.
 
Ruairi said:
nonsense. They could shift to residential in the morning but they're sitting tight to see what the market does and see what makes the most money.
Meanwhile the neighborhood is left with a hole in the ground.
Any wonder there are none sympathetic to their cause.

Also, didnt take a rocket scientist last year to see that the lab space market was saturated but this lot plowed ahead.
Click to expand...
You clearly are not a student of human nature.

It is a basic fact that every capital market on the planet overshoots the top of the market in economic cycles due to FOMO reactions. It is a fundamental characteristic of capital markets (because investors are human).
 
shmessy said:
View attachment 52908

www.cbsnews.com

How rich is Harvard? It's bigger than the economies of 120 nations.

Ivy League colleges built massive endowments partly through alumni donations. Some gifts have come under threat amid turmoil over antisemitism.
www.cbsnews.com www.cbsnews.com
MONEYWATCH

​

Click to expand...

Most folks don't realize it but an endowment isn't just a pile of money sitting in a bank vault. Most of it's tied up in investments, like a pension fund, that are intended to generate cashflow or just keep the dollars safe.

If you have the luxury to take a long-term view, you're not going to liquidate some of those investments at what would be fire-sale prices just because the economy is temporarily in a rough patch -- that's just lighting money on fire if those investments aren't tied up in something whose value is likely to rebound over the next couple of years.

So, yes, Harvard does have a boatload of dollars at hand, but their incentives are strongly weighed towards keeping that money in illiquid or semi-liquid, revenue-generating places regardless of the greater societal benefits that might be had if they spent a bunch of that building homes for their students and janitors. Municipalities can change that calculus if they're smart and make friends elsewhere in government so that Harvard or some other school is forced to face the threat of reputational damage or even a hard time getting permits to do what it wants, the Dover Amendment notwithstanding.
 
Aprehensive_Words said:
Most folks don't realize it but an endowment isn't just a pile of money sitting in a bank vault. Most of it's tied up in investments, like a pension fund, that are intended to generate cashflow or just keep the dollars safe.

If you have the luxury to take a long-term view, you're not going to liquidate some of those investments at what would be fire-sale prices just because the economy is temporarily in a rough patch -- that's just lighting money on fire if those investments aren't tied up in something whose value is likely to rebound over the next couple of years.

So, yes, Harvard does have a boatload of dollars at hand, but their incentives are strongly weighed towards keeping that money in illiquid or semi-liquid, revenue-generating places regardless of the greater societal benefits that might be had if they spent a bunch of that building homes for their students and janitors. Municipalities can change that calculus if they're smart and make friends elsewhere in government so that Harvard or some other school is forced to face the threat of reputational damage or even a hard time getting permits to do what it wants, the Dover Amendment notwithstanding.
Click to expand...
Thanks, but I've been a CFP for 32+ years now. 4.5% annual distro rate for an endowment is standard conservative in ANY market (see boglehead link below)- - by that calculation at it's LOW of $26 billion in 2010 (not even the 28 quarter average as outlined below!), that would be $1.17 billion available just for that one year.

Of course, Harvard wouldn't be spending anywhere near all of the $1.17 billion conservative distro amount (for just one year) - but it is fundamental to note, it is well north of the ENTIRE Northeastern University endowment in 2017 when NU completed the far superior ISEC complex. The most recent (2023) estimate for Northeastern's total endowment is $1.642 billion.

Harvard had no excuse - and still builds crap as compared to MIT and Northeastern. Let's face it, it just wasn't a priority to Harvard. Perhaps they were still busy back then buying up Allston land. But we should dispense with the "they couldn't afford it" canard.

The TRUE measurement would be what did Harvard lose in delaying 8 years their SEC? In terms of construction cost, energy costs of older faciltiies vs. the SEC's https://seas.harvard.edu/office-facilities/allston-sec-sustainability-information and opportunity cost of 8 years not having a modern pre-eminent facility for its researchers, students, etc.

Withdrawal Rate Using Endowment Rules?​

Post by C.D. Gwyne » Fri Jul 31, 2020 1:10 pm

Hello All,
Imagine for a moment that your retirement fund is a tiny endowment fund. Could you borrow some simple rules used by endowment funds
to decide on a safe percentage to withdraw?

Assume that your retirement fund is 60% bonds and 40% stocks. Also assume that withdrawing 4% of its value per year will allow the fund to grow.
This leads to greatly fluctuating income. How could the fluctuations be lessened?

The managers of the University of Michigan endowment fund follow two rules;
1) They average the value of the endowment over the previous 28 quarters, and take 4.5% of that.(This helped them during the crash of 2008.)
2) In a year when the market is down a lot, they take no more than 5.3% of the value of the endowment in that year. (This protects the principal.)

You might apply these rules to your "tiny endowment fund" in this way:
1) Average the year end value of your portfolio for the past seven years. Take 4% of that.
2) In a year when the market is down, take up to 4.5 % of the value of the your portfolio in that year.

What do you see as the pros, cons and alternatives?

C.D. Gwyne
Philadelphia
 
Last edited:
Maybe the University of Michigan uses a seven year rolling average, but most universities use a much shorter period; i.e., three year rolling average with a one year lag.

All endowments are comprised of restricted funds and unrestricted funds. Harvard's endowment is comprised of 14,000 separate funds, which constitute the restricted endowment. Monies from a restricted endowment fund providing scholarship funds for trombone players in the Harvard band can't be used to pay for a law school's professor's salary.

As it is, Princeton's endowment is so 'rich', that they can't always spend the annual distribution of a restricted endowment. Illustrative example, the restricted endowment for trombone players in the Princeton band has enough money to pay for ten trombone players, but the band only has seven. The unspent money for three trombone players is returned to the restricted endowment.

In its most recent financial report, Harvard stated that 70 percent of its endowment value was in restricted funds.

For anyone who follows Duke men's basketball, there is a restricted endowment to support men's basketball. The current value of that endowment is about $150 million. At a 4.5 percent annual distribution, that's $6.8 million for men's basketball, which covers the scholarships of the basketball players and team managers, plus the compensation for assistant coaches, the head coach. What they can't spend, the NCAA limits roster size, and number of coaches, is returned to the restricted endowment fund. Not a penny can be spent on women's basketball.

Northeastern places a high premium on capital assets (buildings and equipment) on its balance sheet; nearly $1.5 billion. The amount of restricted endowment funds available for student scholarships and financial aid is $309 million. << That doesn't buy much aid at a 4.5 percent annual distribution, and 20,000+ undergraduates. BUT, Northeastern has a co-op program that provides beaucoup monies for participating students. Harvard and nearly every other university does not a program where private employers are, in effect, subsidizing the cost of attendance.
 
If you want specifics, Harvard puts out a annual financial report (PDF) every year, but here are some extracts. Notice how little of the endowment is dedicated to Capital/ Construction; of its distribution, seemingly almost all of the distribution is transferred into the operational budget rather than capital.

1000035199.jpg

1000035201.jpg

1000035207.jpg
 
Last edited:
You must log in or register to reply here.

Back
Top