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

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

From the BRA:

https://twitter.com/BostonRedevelop/status/765908245374496768

The assessed values for land quoted above are for permitted parcels with millions of square feet approved. The sliver parcel can never be built on (unless you spend $20M to move the 115KV line).

Thanks for the link.

From the floorplans, 150 Seaport leaves the 115KV line in place, and the area above the underground line as open space. The line cuts across the far southwest corner of the Triangle parcel, at most perhaps 3 feet inboard of the sidewalk where the Triangle parcel and Tishman Speyer's sidewalk abut. Cronin will not be incurring any cost for moving the line.

SNAG-0144.jpg


^^^ The 115 KV line is just above the blue line with the several blue dots.
I could certainly build on the Triangle parcel without touching or disturbing the 115 KV line.

Several nearby assessments for what are unbuildable, unusable, small lots.

Both on C St. no number, north of the BCEC, east of the vent building, the parcels are either over a ramp, or include part of a roadway.
2790 sq ft, $446,000 assessed value; $160 a sq ft
1875 sq ft, $319,000 assessed value; $170 a sq ft.
 
Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

I think a major point that is missed in this debate is that the City-owned triangle of land is WORTHLESS without this project. No one else is going to buy it. There is no market for the parcel.

So whatever the sale value, it is all upside for the City.

If that property were put to auction, you'd have multiple bidders and the starting price would be in the six-figures for sure. As has been discussed, the City is making $20k+ per year in net rent on it currently. That's far from worthless. Even as an unbuildable lot with an underground power line, the surface alone is worth hundreds of thousands.

^ just a caution about parking lots and assessments. Parking lots (and garages) are assessed based on the business revenue potential from parking, not based on the buildable value of the land. So they often have really screwy assessments in Boston (because parking revenue is so lucrative), and would never assess at the same value with a building placed on them.

That's not "screwy", that's "accurate". In commercial real estate, value is a function of NOI and Cap Rate. Take the net income a property is receiving (NOI) and divide it by the market cap rate (the prevailing income return expected given market conditions) and you have a good estimate of value. So if land is being rented out for, say, $20k a year in net income, and the prevailing market cap rate is about 5%, that land is worth about $400k.
 
Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

The rent is $1720 per month for 6 months each year, so just over $10K per annum. I doubt a surface lot would achieve a 5 cap but maybe. Big picture should rule here though, tens of millions of dollars in future RE taxes or an extra few bucks up front.
 
Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

The rent is $1720 per month for 6 months each year, so just over $10K per annum. I doubt a surface lot would achieve a 5 cap but maybe. Big picture should rule here though, tens of millions of dollars in future RE taxes or an extra few bucks up front.

Are they only paying rent in the good weather? That's not typical. Doesn't the bar have their stuff set up on the land even when they aren't using the seating?
 
Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

Boston Globe and 77% of it's readers: imbecile manics/useful idiots.
 
Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

If that property were put to auction, you'd have multiple bidders and the starting price would be in the six-figures for sure. As has been discussed, the City is making $20k+ per year in net rent on it currently. That's far from worthless. Even as an unbuildable lot with an underground power line, the surface alone is worth hundreds of thousands.



That's not "screwy", that's "accurate". In commercial real estate, value is a function of NOI and Cap Rate. Take the net income a property is receiving (NOI) and divide it by the market cap rate (the prevailing income return expected given market conditions) and you have a good estimate of value. So if land is being rented out for, say, $20k a year in net income, and the prevailing market cap rate is about 5%, that land is worth about $400k.

I've explained this before upthread and you chose to ignore it. You cannot apply a cap rate or any other ROE assumptions to a source of income if that income stream will not last in the future. There is an implicit assumption that the income stream will persist in the future when you apply a cap rate or use ROE to value an asset. This land is worth less than you think because the restaurants are going away and will no longer pay rent to sustain your valuation.

TL;DR: Your valuation is wrong. It'd be like saying "this land is currently producing $1720/month in oil revenue so the plot is worth $400k" when the oil well is about to dry up.
 
Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

I've explained this before upthread and you chose to ignore it. You cannot apply a cap rate or any other ROE assumptions to a source of income if that income stream will not last in the future. There is an implicit assumption that the income stream will persist in the future when you apply a cap rate or use ROE to value an asset. This land is worth less than you think because the restaurants are going away and will no longer pay rent to sustain your valuation.

TL;DR: Your valuation is wrong. It'd be like saying "this land is currently producing $1720/month in oil revenue so the plot is worth $400k" when the oil well is about to dry up.

No, I didn't ignore your point. I discounted it because it doesn't make any sense. The restaurants going away and being replaced with a condo tower would make that land more valuable, not less valuable. If we are assuming a condo tower, the value of that land is millions. That is the marginal increase in value of the condo tower with the sliver of land, compared to the value of the condo tower without the land. By assuming that the current income stream will stay, we are being generous to Cronin. If we assume he needs that land to build a $260 million tower then yes, we can throw out the current NOI from the calculation, but then the price of the land would go up.

Even without the restaurant seating lease and without the condo tower that land could be valuable as food truck / street vendor space, or parking space, or to house a small pop-up building, or plenty of other uses.

Taking a step back, there are really two perspectives here one could take to justify this valuation:

1) This land is not worth more than $55k. Given its size, location, underground power line, and position next to the Cronin land, $55k is a fair price. Nobody else in the market would be willing to pay more when taking these constraints into consideration.

2) The land is worth more than $55k, but that is a trade the City should be willing to take none-the-less. Given the overall public good by developing the land, and the future tax revenue that can be earned from it, the City is being prudent in selling the land at below market value to achieve these goals.

As I see it, perspective #1 is demonstrably false and indefensible. That land is clearly worth more than $55k. If one considers a capitalized income stream it is worth more than $55k. If one looks at the marginal value to Cronin it is worth more than $55k. If one considers the potential income from other uses, it would be worth more than $55k. If the land were to be put on the market, it would certainly get more than $55k. I don't see how any cogent argument can claim that it is not worth more than $55k.

Perspective #2 is something that I disagree with--for reasons I have previously outlined--but at least it is a rational argument. I am sympathetic to those claims, and they make sense, even if I believe that they are not, ultimately, justified.
 
Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

No, I didn't ignore your point. I discounted it because it doesn't make any sense. The restaurants going away and being replaced with a condo tower would make that land more valuable, not less valuable. If we are assuming a condo tower, the value of that land is millions. That is the marginal increase in value of the condo tower with the sliver of land, compared to the value of the condo tower without the land. By assuming that the current income stream will stay, we are being generous to Cronin. If we assume he needs that land to build a $260 million tower then yes, we can throw out the current NOI from the calculation, but then the price of the land would go up.

Right, but isn't that what taxes are for? That's the equivalent of rent on this land long-term. Paying the present value of 50 years' worth of monthly rent to the City and then paying 50 years' worth of taxes to the City is effectively double-dipping.
 
Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

Right, but isn't that what taxes are for? That's the equivalent of rent on this land long-term. Paying the present value of 50 years' worth of monthly rent to the City and then paying 50 years' worth of taxes to the City is effectively double-dipping.

Right, but isn't that what taxes are for? That's the equivalent of rent on this land long-term. Paying the present value of 50 years' worth of monthly rent to the City and then paying 50 years' worth of taxes to the City is effectively double-dipping.

No, I don’t think that logic works at all. Taxes are not the equivalent of rent on this land long-term.

Think of a simpler scenario. For example, the city owns a surplus parcel that is more normal looking, one that’s zoned multi-family residential and is big enough for 100 units and has no weird access or waterfront issues. Currently the city is not leasing it to anyone, there’s no income and it’s just sitting there. The city then determines to sell it to someone else for the development of 100 units. If you say the city is double-dipping to get a present value purchase price AND thereafter collect taxes on the 100 units built there, then your logic imputes to saying the parcel must be given away. This is illogical. Of course the city can BOTH sell a parcel of land AND collect taxes on whatever is then built on it. Happens all the time, and not just in Boston.

And by the way, the idea of valuing the parcel by using the present value of future parking revenue is one I find interesting, but not convincing. If I were the seller, I’d use that to calculate my opportunity cost of knowing what I let go from departing the status quo. But the dramatic improvements being proposed on the parcel abutting mine and partially in the air above mine suggest I’d value it differently than using present value of future parking revenues. But this is a digression.

This oddball little triangle of land and how it connects to Cronin’s larger plan has all sorts of quirks that cloud the valuation issue. As I posted yesterday and as others have posted, it’d be challenging. But the baseline reality is that a city most assuredly can raise cash by selling a surplus land parcel and also raise tax revenues from the same parcel later on. Happens all the time. If you dislike that and consider it double-dipping, that's your free right to thusly opine. It's going to happen over at the Winthrop Square garage - they're not giving that land away, and they'll be collecting taxes on it. I seriously doubt they set the price on some calculation of what the parking income once was.
 
Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

No, I don’t think that logic works at all. Taxes are not the equivalent of rent on this land long-term.

Think of a simpler scenario. For example, the city owns a surplus parcel that is more normal looking, one that’s zoned multi-family residential and is big enough for 100 units and has no weird access or waterfront issues. Currently the city is not leasing it to anyone, there’s no income and it’s just sitting there. The city then determines to sell it to someone else for the development of 100 units. If you say the city is double-dipping to get a present value purchase price AND thereafter collect taxes on the 100 units built there, then your logic imputes to saying the parcel must be given away. This is illogical. Of course the city can BOTH sell a parcel of land AND collect taxes on whatever is then built on it. Happens all the time, and not just in Boston.

It also happens all the time that cities give land away because developing it will increase their revenue far more than the purchase price. That DOES happen in Boston. GE's essentially doing exactly that with the two brick buildings.

It's about the City's overall earnings on the property. Taxes form part of that, purchase price another. And yes, asking for the present value of future revenue from the developer and then collecting that revenue anyway is, in concept, unfair. Doesn't mean you can't do it.

Look at all this another way. What if the City had accepted zero dollars for this sliver of land, and it had been called an incentive? What if they had given Cronin a $500K tax break - equivalent to about 15% of his annual bill - to build? Rifleman would be ranting, we'd all be rolling our eyes, and there wouldn't be any problem. What makes this scenario so odious?
 
Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

It also happens all the time that cities give land away because developing it will increase their revenue far more than the purchase price. That DOES happen in Boston. GE's essentially doing exactly that with the two brick buildings.

Huh? GE bought those from a private seller, didn't they? I do understand the city threw all sorts of tax breaks at them, and other promises, but they didn't give them any land, unless I missed something..


Look at all this another way. What if the City had accepted zero dollars for this sliver of land, and it had been called an incentive? What if they had given Cronin a $500K tax break - equivalent to about 15% of his annual bill - to build?

Now you're veering into a conversation where I might agree with you if we could ever get terms straight. The BRA (and lots of other cities) do indeed engage in a lot of weirdly complex deals in which they give away tax breaks etc to prompt development. I am rarely in favor of them. I'm seriously dubious on the GE deal, for example, except that it seems many of the alleged giveaways were probably baked into the budget anyhow. then in other cases, they put parcels out for sale - Winthrop Sq garage. The spectacular lack of consistency causes immense problems and many instances of unfairness. the processes are so messy and so inconsistent that I find it extremely difficult to even have a coherent conversation about them.

Rifleman would be ranting, we'd all be rolling our eyes, and there wouldn't be any problem.

For the love of god.... shhhhhhhhh. If this goes swerving off to that other garage I might have to burn the server to the ground.
 
Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport


Understood. I'm willing to walk away... :)

BTW... GE has two deals going here. One with P&W for the new building's parking lot site, and one with the City for the warehouses. That deal essentially amounts to a gift, IIRC. Somehow, they're buying them from the current owner, then selling them to the City, which is leasing them back for an amount chosen to cancel out the purchase price. And of course since the buildings are publicly, owned, no taxes.
 
Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

Also, The City (writ large, as in all of us collectively that make up the city) is getting what it wants on the parcel, an attractive addition to the harbor front, and nice expansion of Harborwalk in the area. We are not getting a surface parking lot or a dead space for food trucks, which might maximize sale revenue.
 
Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

Understood. I'm willing to walk away... :)

BTW... GE has two deals going here. One with P&W for the new building's parking lot site, and one with the City for the warehouses. That deal essentially amounts to a gift, IIRC. Somehow, they're buying them from the current owner, then selling them to the City, which is leasing them back for an amount chosen to cancel out the purchase price. And of course since the buildings are publicly, owned, no taxes.

Equilibria -- mostly correct

The entities involve are actually:

P&G -- Purchase of the parking lot and the Necco Properties [owned by P&G via acquisition of the assets of Gillette]

and the Commonwealth of Massachusetts for the complex transaction on the Necco properties after rehabilitation by GE -- the City of Boston is not a party except possibly for an easement on the side of the Necco Building bordered by Necco St
 
Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

Right, but isn't that what taxes are for? That's the equivalent of rent on this land long-term. Paying the present value of 50 years' worth of monthly rent to the City and then paying 50 years' worth of taxes to the City is effectively double-dipping.

But this is how all property transactions work. If you buy a house (or any real estate asset), you pay the previous owner for the value of the property and then subsequently pay the city/town each year for the property tax. It just so happens in this situation that the previous owner is also the city/town. This doesn't mean that you should get to have the property for free/cheap.

Look at all this another way. What if the City had accepted zero dollars for this sliver of land, and it had been called an incentive? What if they had given Cronin a $500K tax break - equivalent to about 15% of his annual bill - to build? Rifleman would be ranting, we'd all be rolling our eyes, and there wouldn't be any problem. What makes this scenario so odious?

Right, this has been my point all along. The City giving that land up for $55k would be, in effect, a subsidy to Cronin of many hundred thousand dollars. The difference here is that, if the City gave Cronin such a subsidy, it would be documented as such in the public record, and the virtues of the subsidy could be debated. That would be the transparent, good-governance way of going about it. By not doing it this way and simply "selling" him the land for cheap, the subsidy is hidden.

And giving incentives to companies that are bringing jobs to an area is generally more accepted than giving incentives to condo developers building luxury units. If this deal were presented to the public as "City to give Cronin $400k to help build a bunch of $2 million condos" people would not be happy, but that is essentially exactly what could be happening here. This sets bad precedent and is unfair to all the other luxury condo developers out there, like the ones immediately next door to his building, who don't get such a subsidy.
 
Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

"This sets bad precedent and is unfair to all the other luxury condo developers out there, like the ones immediately next door to his building, who don't get such a subsidy."

You mean the original developers of Pier 4 that took their triangular sliver of land from the City (which is much bigger than this one) for exactly $00.00?
 
Re: Whiskey Priest/Atlantic Beer Garden Redevelopment | 150 Seaport Blvd | Seaport

"This sets bad precedent and is unfair to all the other luxury condo developers out there, like the ones immediately next door to his building, who don't get such a subsidy."

You mean the original developers of Pier 4 that took their triangular sliver of land from the City (which is much bigger than this one) for exactly $00.00?

There's building on that?

And if there is, that is wrong too. It would be a sterling example of "bad precedent".

EDIT: Looks from the PNF like the 100 Northern Ave land was transferred as part of a 1998 land swap that rearranged roads throughout the Seaport. The new Northern Ave alignment took over some Pier 4 land and Pier 4 took over some old Northern Ave land. I can't quite glean the details of this swap from my perusal of the PNF (it's all in legalese).
 
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