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Developer threatens to cancel Fenway project unless state makes project more profitable
By adamg on Fri, 12/07/2012 - 6:35am
The Globe reports on the sudden change of events at Fenway Center, the proposed complex by the turnpike and commuter-rail line.
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Comments
Seriously? Fuck them. The
Seriously? Fuck them. The state should use every mechanism they have to either force the project or sue the ever-living fuck out of these investors.
You can't say something costs five bucks, then a while later say its five bucks, plus all these other things I've decided I want.
Cripes
Is anyone surprised?
Seriously - these air rights guys do this 100% of the time. Get everyone all hot and bothered about a big new development and then pull a Filene's and say we can't do it without more government money.
Simple solution. Give it to them for free - but take a percentage of the profits - just have a competent outside auditor keep an eye on how and how much money they suck out of the project on subcontractors etc. because you know they'll be trying to backdoor the money.
Would be nice to know who the
Would be nice to know who the supposed investor is. Can't help thinking Johnny Grab Your Guns never did or will have the financing for this project. Other than the Godzilla sized parking garage that the Sox have a raging hard on for, who else would really be interested in this project? There are so many other potential developments on solid ground in the Fenway which are less risky for investors to bankroll.
Real Estate development
is a very sleazy business, full of very sleazy people. Probably why politicians and developers are like two peas in a pod.
Still not good but more complex
I read the article a bit differently.
The developer will rent/lease the space over the Massachusetts Turnpike and pay the state for 99 years.
The state agreed to give a "credit" against those rent payments to cover the developer's cost of building over the Pike. So, rental payments would be reduced.
The rent payments were originally supposed to be based on the value of the development - so, as it became more valuable (higher rents on apartments, higher rents on leased office space), the state would get bigger payments over the coming years.
The value of the development is currently based on the "entire" project - buildings and land.
The developer's financial partner now wants it to be based on the buildings alone, reducing the rent payments.
So, the state isn't really "subsidizing" the project in the sense it's not handing out cash, which was the complaint with the Columbus Center project (mine, too).
Shifty to try to change the rules this late in the game but it comes down to will the state make money off this and what is the alternative - is the project useful to the neighborhood and a net improvement.
The Headline is Misleading
The developer and investor is not looking for a subsidy. They are looking to lower the rent they pay for the air rights over the Pike. The situation is like any developer wanting to get a better deal from the property owner. There are no tax credits or low interest loans being handed out. Given that the "property" in question is unique, you cannot determine what a "fair" rent is and whether the state is subsidizing the project by leasing the air rights below market.
All the other things that poster hinted at (the developer lost never had an investor, it is reneging on a previous deal) may be true, but it is not clear that there would be any subsidy, especially when you consider if the developer doesn't go through with the project, the state is getting $0.00 for its air rights.
Headline changed
You and John are right. This is not a Columbus Center, where the developer went to jail in his zest to get actual state money thrown at him. Still, the developer agreed to build the project under certain conditions and now wants that amended. Would have been interesting to have seen what might happen if that lawsuit hadn't delayed things.
The plan is an enormous
The plan is an enormous parking garage, disguised as something else.
To hell with it.
Are there other developers in
Are there other developers in line throwing money at the state? If not, then this is your best deal. Last time I checked, one dollar was better than no dollars. If there are developers offering the state a better deal, then make a change.
As a matter of fact....
Parcels 12-15 have attracted multiple developers interested in building.
I know those parcels are individually different, but I don't think there would be trouble finding a new developer. The project wouldn't be complete in the next 2 decades albeit.
BTW....instead of lowering the rent payment, why not allow them to build taller?