Boston Properties seeks millions in tax relief for 'blighted' TD Garden site
The Boston Redevelopment Authority is poised to provide millions in tax concessions for the developers of the $1 billion mixed-use project slated to be built on a "blighted" parking lot in front of the TD Garden.
Thomas Grillo
Real Estate Editor-
Boston Business Journal
The Boston Redevelopment Authority is considering millions in tax concessions for the developers of the $1 billion mixed-use project slated to be built on a parking lot in front of the TD Garden.
Boston Properties (NYSE: BXP) and Delaware North Cos. have filed an application for a Chapter 121A agreement, a vestige of urban renewal from the 1950s that allows developers to pay reduced taxes in exchange for building on what is dubbed a blighted area. The state law defines blight as a place that is “detrimental to the safety, health, morals, welfare or sound growth of a community because it is unduly costly to develop...”
In the application, the developers argue that the site qualifies since the Causeway Street parcel has been vacant since the Boston Garden was demolished in 1998 and has been used as a parking lot ever since. The application also noted that the site is subject to a high water table which would add to the projects' cost. The developers also said the MBTA’s Green and Orange Lines would have to relocated at considerable expense.
A tax-credit dollar amount is not listed in the application. A City Hall source said the details are negotiated following approval of the 121A by the BRA, but Boston Properties and Delaware North could expect to save millions.
The development team's plans for the 1.7-million-square-foot mixed-use development include three towers on the 2.8-acre parcel. The development would feature a 20-story hotel, a 25-story office tower and a 45-story residential building with 500 units. In addition, up to 376,000 square feet of retail space would be located in the lower levels of the three buildings.
Bryan Koop, regional manager for Boston Properties, and Charles Jacobs, a principal of Delaware North Cos., did not return calls seeking comment.
Mayor Thomas M. Menino defended the tax credit request, saying that the savings are necessary if the development team is to attract a 40,000-square-foot supermarket at a reasonable rent. The mayor said the tax savings would be passed along to the tenant. The neighborhood has been supportive of an affordable market in the area for more than a decade, he said.
“You have to be competitive today, construction costs have risen by 20-to-25 percent in one year in this city,” Menino said. “The cost of development is very high and we have to help them (developers). The city is not losing any money. You have to get the project off the ground. You have to think about what this project means to the city.”
But critics say the area around the TD Garden is not blighted, given that it is surrounded by $1 million condominiums and luxury apartment buildings.
“There isn’t any blight in the downtown,” said Matthew Cahill, executive director of the Boston Finance Commission, an independent city watchdog agency. “We have some real questions abut this application.”
A BRA spokeswoman said a public hearing on the 121A application will be held at a later date before the BRA board, but a time has not been set.
In the past, the agency has said more than 100 buildings have signed 121A agreements, most of them to subsidize affordable housing projects. Other buildings with 121A agreements include the Prudential Center, One Beacon Street, TD Garden, Marriott Long Wharf, and the Greenhouse residential development on Huntington Avenue.
James Zahka, a member of the West End Civic Association, said under no circumstance should the project be granted 121A status.
“The area is not blighted and the notion of granting tax breaks to billionaires in unconscionable,” he said. “Jeremy Jacobs of Delaware North has a net worth of $2.8 billion and Mort Zuckerman of Boston Properties has a net worth of $2.3 billion. There is no reason to grant tax subsidies. The city says it cannot afford to give pay raises to the police. If they didn’t give tax breaks to billionaire developers, perhaps they could afford to pay the police and teachers what they deserve.”
