The St Regis Residences (former Whiskey Priest site) | 150 Seaport Blvd | Seaport

[TheRifleman]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

What is the maximum they actually can get for the LOT?
I can deal with something like this to make a 260Million dollar project work.

Now where the taxpayers got assfucked:
Was the Fan Pier and Liberty Mutual Projects we are talking almost 50 Million in tax breaks & Incentives to insurance companies.
That's basically a heist.

 

[West]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

Rather than sell Cronin the sidewalk for $55,000, give him a 99 year ground lease at $1,720 a month. The city in three years would get more income from the ground lease than it would from the sale.

The state isn't selling him the tidal lands, its giving him an easement, so Cronin is willing to build without having title to all the land-land and tidal-land on which he proposes to build.

Something along this line is what I'd aim for. The City land makes his development - as proposed by him - possible. Pricing should not aim to wipe out his profits or otherwise prevent his plan from reaching fruition. But he's the one proposing to convert that City owned land and the air rights over the land from something that generates a modest bit of rent for the City and to him (from his bar seating out front) into something that will generate vastly more financial benefits to him (from that portion of the building in the air rights over the land). He and the City are partners now in monetizing that sliver of land (and its air rights, currently not being used) in a modest way. He has proposes monetizing it in a new and WAY MORE profitable way. The City can fairly say, "fine, we'd like to continue partnering with you, but we get a proportionate share of the step-up."

And yes, I realize he's bringing other benefits to the site, and will be paying way more in real estate taxes; that's why I wouldn't seek to gouge him to the point he just redesigns it back from the air rights.

If stellarfun's proposal were put in front of the developers, I'm sure they'd jump on it with both feet and laugh all the way to the bank. I assume their $55,000 offer was an opening bid, and if they manage to close on the land at that price, they will laugh so hard they'll be pissing their pants.

If the City's stupid enough to sell at $55,000, I will tip my hat to Mr. Cronin and his team for pulling that off.

 

[Sprngh2o]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

What is the maximum they actually can get for the LOT?
I can deal with something like this to make a 260Million dollar project work.

Now where the taxpayers got assfucked:
Was the Fan Pier and Liberty Mutual Projects we are talking almost 50 Million in tax breaks & Incentives to insurance companies.
That's basically a heist.

Assfucked?

 

[Justin7]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

Assfucked?

Diagram

 

[Equilibria]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

Diagram

Please no...

Something along this line is what I'd aim for. The City land makes his development - as proposed by him - possible. Pricing should not aim to wipe out his profits or otherwise prevent his plan from reaching fruition. But he's the one proposing to convert that City owned land and the air rights over the land from something that generates a modest bit of rent for the City and to him (from his bar seating out front) into something that will generate vastly more financial benefits to him (from that portion of the building in the air rights over the land). He and the City are partners now in monetizing that sliver of land (and its air rights, currently not being used) in a modest way. He has proposes monetizing it in a new and WAY MORE profitable way. The City can fairly say, "fine, we'd like to continue partnering with you, but we get a proportionate share of the step-up."

And yes, I realize he's bringing other benefits to the site, and will be paying way more in real estate taxes; that's why I wouldn't seek to gouge him to the point he just redesigns it back from the air rights.

If stellarfun's proposal were put in front of the developers, I'm sure they'd jump on it with both feet and laugh all the way to the bank. I assume their $55,000 offer was an opening bid, and if they manage to close on the land at that price, they will laugh so hard they'll be pissing their pants.

If the City's stupid enough to sell at $55,000, I will tip my hat to Mr. Cronin and his team for pulling that off.

How do you know that, though? Cronin's been engaged with the BRA for a year on this. How do we know that this isn't the best bargain he would accept? How do we know he hasn't been gouged already?

You say these things as if we know them, but we don't.

 

[dshoost88]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

Assfucked?

Diagram

LMAO

(*no pun intended)

 

[FenwayResident]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

All I see here (and on other sites) is hand wringing about the price, based on a gut feeling that it's too low. Is anyone here actually a professional in the commercial real estate space? Have we seen any objective valuations other than "it seems too low!"? The fact of the matter is that this is an awkward, small plot with very little that could be done with it on its own.

Now I'm not saying it's not underpriced at $55k. It's totally possible that they're getting a sweetheart deal. But I haven't seen anything resembling an objective analysis to convince me of that fact.

 

[JumboBuc]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

The issue w/ the complainers is not value parity of the transaction; the issue is that residents are jealous of developers making money. As y'all know, 100% for keeping the dev's in check (seriously, they can be scumbags and exploiters), but, c'mon the jealousy thing is so 3rd grade.

I'm extremely high up on the pro-development scale, and I think the city selling this lot for $55k is absolutely ridiculous. It's representative of way too many public entities just flat out do not understanding the value of their assets and are taken advantage of by much more shrewd parties who do understand their value. And the Globe is absolutely right to raise its eyebrows at this; one of the primary responsibilities of a free press is to act as a watchdog.

I don't know all the facts here, but since the City couldn't have sold or used that land under any other circumstances, doesn't this $55K go in with whatever benefits he's giving the city as a condition of approval? The park he's building in front of the Childrens' Museum, the Harborwalk... whatever else there is?

Developers provide packages of public benefits. I suppose the City could have driven a hard bargain, but if they'd doubled their take, would Cronin have refused to spend the balance on something else?

This is different from Winthrop Square, where the city had multiple bidders and chose to make an extra $75 million. Cronin is the only one who wants this parcel.

It's also worth noting that the Globe isn't reporting on the news here, it's inventing the news. No one objected to this before Tim Logan went around soliciting outrage for the story.

If the City wants a public park and a Harborwalk, they should build a public park and a Harborwalk. And to fund this, they can charge developers the actual market price of the land they are selling/giving to them. This murky "I scratch your back you scratch mine" behavior is NOT in the public's interest. Land deals should be as above-the-board and transparent as possible, and complaining that the Globe is even brining attention to this issue works strongly against that sentiment. As far as nobody else wanting this parcel, hell, I would gladly walk down to City Hall on my lunch break today and cut them a check for significantly more than $55k for that land. That's about one third the price that this significantly smaller non-buildable lot in Cambridge that I've had my eye on is asking.

All I see here (and on other sites) is hand wringing about the price, based on a gut feeling that it's too low. Is anyone here actually a professional in the commercial real estate space? Have we seen any objective valuations other than "it seems too low!"? The fact of the matter is that this is an awkward, small plot with very little that could be done with it on its own.

Now I'm not saying it's not underpriced at $55k. It's totally possible that they're getting a sweetheart deal. But I haven't seen anything resembling an objective analysis to convince me of that fact.

Appraising that land by comparing it to the price of other "non-buildable" lots in Dorchester and Roxbury is so 100% not the way to do it. And the land isn't even truly "non-buildable", as Cronin is about to build on it. If the City is getting $1,720 a month net rent on this currently (a price that was also arrived at non-competitively and is likely below true "market" price, but that's okay), that works out to $20,640 a year. At a $55k price, that's a cap rate of >37.5%! Apply a more typical for Downtown Boston cap rate of about 5% and you get a value of around $413k. There, Cushman & Wakefield, I did your job for you. Where's my fee? (And also, was your appraisal fee, by any chance, greater than $55k? I wouldn't at all be surprised if it was...)

 

[bigpicture7]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

I'm extremely high up on the pro-development scale, and I think the city selling this lot for $55k is absolutely ridiculous. It's representative of way too many public entities just flat out do not understanding the value of their assets and are taken advantage of by much more shrewd parties who do understand their value. And the Globe is absolutely right to raise its eyebrows at this; one of the primary responsibilities of a free press is to act as a watchdog.

Jumbo, we share many of the same sentiments on responsibility and transparency. But I think sometimes these parties engage in fights for an illusion of parity and public appeasement when the net value is what's more important. Both sides - the city and Cronin - are doing a crappy job with community social discourse. There should never have to have been a Globe "expose" on this awkward sliver of land. It should have been anticipated that this transaction would appear ridiculous to the public, and that the media would latch onto whatever numbers were tossed out. $55k looks absolutely stupid - free would have looked better! - $55k begs the question of "how does a multi-mill$ development not have another couple hundred K to spare". I watched that public meeting, and Cronin's team rattled off this long list of things they're doing for the community - each of which had monetary values attached (e.g., building a $25mil senior housing development); I understand that's all part of the package and much of it is required, but honestly if you're building a $25mil public housing project, why not call it a $25.3mil project and include a long-term lease for public land on Seaport as part of the transaction? These transactions are so complex that this stupid chunk of land is meaningless in the grand scheme. Is the city getting considerable overall value or not? That's what I care about as a taxpayer. (e.g., is GE going to build a tremendous public realm on that side of ft. point which is now a post-industrial wasteland or not?...and in my home area of brighton, there are 3+ stalled developments where vacant lots literally sit collecting garbage and automobile parts because of piddly community disagreements - one could argue that the city wasn't getting enough in return from the developer, but what about all of us having to live next to a garbage lot for years and years?)

My only point is that the $55k literally doesn't mean anything on a project of this scale when taken out of context of everything else.

 

[FenwayResident]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

Appraising that land by comparing it to the price of other "non-buildable" lots in Dorchester and Roxbury is so 100% not the way to do it. And the land isn't even truly "non-buildable", as Cronin is about to build on it. If the City is getting $1,720 a month net rent on this currently (a price that was also arrived at non-competitively and is likely below true "market" price, but that's okay), that works out to $20,640 a year. At a $55k price, that's a cap rate of >37.5%! Apply a more typical for Downtown Boston cap rate of about 5% and you get a value of around $413k. There, Cushman & Wakefield, I did your job for you. Where's my fee? (And also, was your appraisal fee, by any chance, greater than $55k? I wouldn't at all be surprised if it was...)

I appreciate the facts you posted, they help enlighten the conversation beyond assfucking.

If they were getting $1,720 in rent then the plot is worth $300k-500k depending on what kind of return on equity assumptions you use. However, implicit in that valuation is the assumption that the return will continue into the future. Once this land gets rolled into another development that assumption is no longer true and it becomes much less clear what the land is worth. What is the marginal value added by this plot? I don't know the answer to that and I doubt anyone really does since there are so few situations like this.

 

[bigpicture7]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

What is the marginal value added by this plot? I don't know the answer to that and I doubt anyone really does since there are so few situations like this.

Thanks Fenway, this is a much more elegant embodiment of what I was trying to say...since we have no idea of the actual marginal value added of the plot, we need to take a broader view and ask about the overall value added to the city from the project as a whole, including ancillary benefits. I know this makes some uncomfortable (e.g., Jumbo's reference to distaste for I-scratch-your-back-you-scratch-mine / under the table transactions), but without the ability to valuate, you just end up in this war for non-achievable parity instead of focusing on real value.

 

[stellarfun]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

West, I don't own property in the city of Boston, and I am not familiar with Boston zoning.

But where I do own property, there are requirements, for example, with respect to what is called "lot occupancy". Other cities and towns don't use that precise term, but they follow this principle: a residential building may not occupy the entirety of the lot on which its built. Thus, there are provisions either for sideyards, or backyards, or other open space. Its an eminently reasonable provision, for if everyone built to 100 percent of the lot, there is no need for windows, or a door, other than where the lot and building fronts on public land.

From what I read, Cronin proposes to build a residential building on 100 percent of the lot that he owns. He proposes to satisfy whatever open space requirements are set out in the Boston Zoning Code by a.) purchasing land from the city of Boston, and b.) leasing tidal land from the state. This will increase the size of his lot.

I would think the questions for the city of Boston are: a.) how many other sidewalks in the city of Boston are for sale to abutting owners / developers who want to lower their lot occupancy and expand the building footprint pr increase the FAR, or cantilever a building over the sidewalk? and b.) what's a reasonable and fair sales price for a sidewalk? I think we can be quite certain that if other developers perceive that Cronin got a sweetheart deal from the city, they'll try something similar elsewhere.

The city sold seasonal use, air rights for Lansdowne St. for $7.3 million. And there were many people who objected to that. AFAIK, Mr. Henry did not put up any new building as a result of the purchase.
________________
Tim Logan did not write the most recent Globe article.

 

[Equilibria]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

IIf the City wants a public park and a Harborwalk, they should build a public park and a Harborwalk. And to fund this, they can charge developers the actual market price of the land they are selling/giving to them. This murky "I scratch your back you scratch mine" behavior is NOT in the public's interest. Land deals should be as above-the-board and transparent as possible, and complaining that the Globe is even brining attention to this issue works strongly against that sentiment. As far as nobody else wanting this parcel, hell, I would gladly walk down to City Hall on my lunch break today and cut them a check for significantly more than $55k for that land. That's about one third the price that this significantly smaller non-buildable lot in Cambridge that I've had my eye on is asking.

It's not "murky" behavior, it's a development agreement negotiated with neighborhood groups on which the public has the opportunity to comment. Last week, they did, and the comments were wildly, overwhelmingly positive about Cronin and his proposed contributions to the City.

You'd be willing to pay way more than $55K for the parcel, I suspect, because you'd believe you could flip it to Cronin for far more than that. The problem with that reasoning is that there's nothing else Cronin can give you except money for the parcel. There ARE other things he can give the City. He has promised to do so. The community has rallied around those promises, knowing exactly what they are.

There should never have to have been a Globe "expose" on this awkward sliver of land. It should have been anticipated that this transaction would appear ridiculous to the public, and that the media would latch onto whatever numbers were tossed out.

I don't disagree, but the fact that Cronin and the BRA didn't adequately prepare for yellow journalism in this case doesn't mean Tim Logan is right engage in it. He's wrong, and they weren't prepared. Those can both be true. The fact that you don't lock your car doesn't give me the right to steal your stereo.

Tim Logan did not write the most recent Globe article.

Really? I still see his byline on it.

http://www.bostonglobe.com/business...eal-seaport/UzD7dseJ37DBda9C7YIl0H/story.html

 

[bigpicture7]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

AFAIK, Mr. Henry did not put up any new building as a result of the purchase.

Yes he did; the "green monster seats" are an entirely new structure anchored to the sidewalk at Lansdowne st., cantilevering over both the Landsdowne sidewalk and the left field wall of Fenway. Here it is much easier to see the marginal added value of the property, because the project added a specific number of seats to the park that were not possible previously, which are sold for a specific amount for each game/event. There is a clear cut with/without value to Fenway Park of adding those new seats.

 

[stellarfun]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

equilibria, when I read the article at about 6 AM, I could swear the by-line was for someone else, Marc Archimbeault (sp?)
edit: Masrc Arseneault
________________

thanks bigpicture, for clarifying.

_______________

I believe the only thing that Cronin is giving the city is a contribution for new affordable housing (a contribution which is not unique to this development). I believe all the other spending proposals are offsets, as his project will not meet the 50 percent open space requirement of Chapter 91, a state requirement. While the city may be the beneficiary of the offsets, these are not offered in satisfaction of a city requirement.

 

[JumboBuc]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

You'd be willing to pay way more than $55K for the parcel, I suspect, because you'd believe you could flip it to Cronin for far more than that. The problem with that reasoning is that there's nothing else Cronin can give you except money for the parcel. There ARE other things he can give the City. He has promised to do so. The community has rallied around those promises, knowing exactly what they are.

No, I wouldn't necessarily sell it to Cronin. I could rent it to him under his current lease agreement and get an absolutely-unheard-of cap rate of 37.5%. Or I could rent out parking spots on it at $30 a day and likely make back my investment in a year. Or I could rent it out to a foodtruck or two, improve the street level environment of the Seaport, and still likely make a market-beating return. My point here is that, even in its current form, assuming that the development never happens, that land is worth much more than $55k to both the City and Cronin. And knowing that the development will likely happen increases that value above its current value significantly.

I understand that this is part of a larger deal that will add value to the city above-and-beyond the value of this one parcel, but that doesn't mean that the value of the parcel should be ignored. If we're just going to say "ah, whatever, we'll make it up in the end" then what's the point of exchanging numbers at all?

And what gets me about this "the City has to look out for the greater good" argument is that it's only a one-way street. You can be guaranteed that if this deal was going the other way--Cronin had an awkward sliver of land that the city needed for some public works project--then the price arrived at would be much greater than $55k. This would be true even if that public works project ended up increasing the value of the rest of his land significantly. Look at all the land takings (and non-land takings) around the Green Line project. Those landowners didn't take the public good into account when determining their prices, and they were completely right in not doing so. The only fair way to exchange property is to do it at competitive, market prices, and that works both ways. This still holds if the exchange is part of a larger package; in that case, the accounting on all aspects of the package should be square. Why should the city help Cronin subsidize the offsets that he and only he will get credit for?

 

[West]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

I negotiate real estate transactions for a living, on the sell side, albeit in very different types of properties. I have on a few occasions had complications raised by oddball little slivers of land, or weird easements, or encroachments that needed to get cleared up, or what have you.

Appraisals in these situations are worthless, and appraisers know it better than anyone else, and they will plaster so many caveats onto their appraisals it's not funny.

You find out the value of a piece of land like this via negotiation.

Let's assume the following scenario. A) I own that parcel, and it's not in a city with some crazy-ass entity like the BRA, and it's not on the waterfront either (none of these over the water issues on the other side of the site). B) I've been leasing it to Cronin amicably for years for his bar seating. C) The lease income I get is not vital to my financial existence, nor is the lease expense vital to his financial existence. D) There are access issues concerning access to roads across my land to his, as is the case here (whether this is an easement or what exactly: never mind the details, just assume he needs access across my land to the street).

Cronin comes to me and says he's planning to develop his parcel into something way bigger than a bar. This means we have to renegotiate his access lease, at the least. He then tells me he'd like to have his building extend into my air rights, and would quite naturally like to control the site itself and so wants to buy it outright. He asks me for a price.

I'm not hiring some damn appraiser. I'll first wait until I've gotten his renderings / plans, either via negotiation or seeing it in the papers (if he's smart, he provides them, no point trying to hide that). If his plan were in my wheelhouse of property type, I could do a first level pro forma of overall value myself, but it isn't in my wheelhouse. So I'll hire a consultant to help me value a) the total value to him as completed WITH the extension over my air rights, and WITHOUT it (i.e., if negotiations break down, and he scales it back). I'm also going to re-evaluate what access rights across my land will cost if I hold the land and lease the access (again, with or without the overhang above).

Then I really ponder, with the help of a lawyer, who can block whom here. Clearly I have leverage over him, but my sliver is not able to do such a big value boost on its own, so he's got leverage over me. In a worst case scenario, if his development fails and he decides to shutter his bar while landbanking his parcel for a while, I lose all lease income for that while and can do nothing about it. Which won't kill me but I won't like it. The leverage goes both ways and is complex and unique.

So then I go in with multiple pricing: Here's what I'll sell you the land for, here's what I'd renegotiate the lease price to be for a new type of access across my land in case you scale back. He would know me well enough to know my first offer will be high and I won't expect to get that. His first counter will be low (I assume) and he'll expect to pay more.

Would it be complicated and difficult? You bet. Would I get better than $55,000? YES, I am extremely confident of this. Do I know how much more? Of course not. Would I accept an appraisal of any sort? Fuck no. Should he accept any appraisals from me? Fuck no. We get to a price via negotiation. If he's a better negotiator than me, the price comes down, if I'm better than him, the price goes up. Wherever we end up, that is the market price at that snapshot in time. If he flips the parcel the next day for triple what I paid, then I'm a dummy and have no one but myself to blame.

This is publicly owned land, so I do understand it would never play out the same as in a private transaction. But, being publicly owned land, there is a right for the public to know how the price was reached, and the Globe's job is to probe into that. If there were previous rounds of negotiation, the BRA should disclose how that happened. If the guy just came in with a 55K appraisal and the BRA said OK, that's absurd, and the IRS ought to hit him for the unearned income.

 

[TheRifleman]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

If the city & state like to give up such sweetheart land and tax deals to certain groups but not other groups why not start easing some restrictions for building in the city in the first place.
Then they wouldn't have to give land away we could get fair value.
Too much regulations/restrictions for building in the city.
Every project has to go through the BRA in the end to get approval.

The approval process is seriously broken and this is why some groups get tax breaks or land deals and others don't.

Most Govt hacks really don't give a shit about the taxpayers. They actually don't understand the system. Most Govt workers glad to have a paycheck.

 

[Equilibria]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

I negotiate real estate transactions for a living, on the sell side, albeit in very different types of properties. I have on a few occasions had complications raised by oddball little slivers of land, or weird easements, or encroachments that needed to get cleared up, or what have you.

I respect your experience, but the fact that it's a public transaction really does throw a wrench into this logic. Cronin's BRA proposal notes that the City can expect $3,600,000 per year in new property taxes (implied net of the current restaurants) from this project. That in addition to the Harborwalk, Seaport Boulevard streetscape/grading/bicycle facilities, the park, and the affordable housing he's funding with the Pier 4 folks.

I get that you can't estimate how much you'd negotiate for, but is the difference between that and $55,000 really meaningful against even the taxes, which are 6,500% of the purchase price EACH YEAR?

As you say, these are negotiations - do you (not you personally, West) want the BRA to have the reputation of pushing each and every deal to squeeze developers of every potential dollar? That doesn't sound like a healthy development climate to me.

 

[odurandina]

Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

It's also worth noting that the Globe isn't reporting on the news here, it's inventing the news. No one objected to this before Tim Logan went around soliciting outrage for the story.

i've seen Logan write a shitty story before but this was pure scumbag-Globe/hack journalism.... and i called him out on it. hope he reads the comments.

i haven't seen the exact numbers but i figure the BRA is probably going to permit abouit 15-16,000,000 sq ft this year - after several years permitting about 10-12M sq ft/year. For Boston it sounds like a lot, yet we're only building a fraction of the units they're building in SF, Seattle, Dallas, Houston, Atlanta and elsewhere. And we're STILL not building tall enough on hardly any of our precious few available parcels.

We'll be down significanly on sq ft next year, and in the coming years.