So, back in May, Steve Bailey of the Globe wrote a column about Hayward Place. The details of the city-owned parcel are well-known to me.
Basically, as I know the facts, the city sent out a request for proposal (RFP) for the parcel, located across from the Paramount Theater, where Downtown Crossing meets the Combat Zone. It is currently a parking lot.
Millennium Partner won the rights, with a proposal to build an office building. This was odd, because we were in the middle of a recession, and no one thought it was practical to build an office tower. All the other respondents proposed building residential housing.
It looked, to some, as if some sort of back-room deal had been hatched by the Mayor and Millennium Partners, who were building the massive Ritz Carlton Towers project, down the street. (Implied was that Millennium got a sweetheart deal on an undeveloped piece of land – buying it at an under-market price – because the Mayor wanted to make sure the developer completed the project, to bring in needed revenue and boost his own profile.)
Between 2001 and 2005, the BRA has received $2.1 million in revenue from the parking-lot operator (unanswered is what the BRA did with this money. I don’t think it’s being used to lower our property taxes, is all I’m saying!) (It’s not clear why the payments ceased …)
In 2003, Millennium paid $13 million of the $23 million purchase price.
Then, Millennium did nothing. They collected revenue from the parking lot, but never broke ground on the building.
Then, they decided to build condos. Construction was supposed to begin, this spring, in fact. No doubt, delayed – or canceled? – due to the slower condo market.
So, now it sits undeveloped. And, the city gets nothing.
Except, apparently, the city is getting something.
The Boston Redevelopment Authority sent out this press release, correcting some of the assertions made in Bailey’s column.
If Steve Bailey’s column on Hayward Place (May 4, 2007) took an honest look at the financial benefits to the City of Boston, it would have reflected the facts of the City’s agreement with Millennium. Readers would see that Boston taxpayers will get the best return on the City’s investment. Mr. Bailey’s piece would have included the following:
… In an effort to close the revenue gap caused by the end of the monthly payments by the operator to the City, the BRA asked the City Assessor to determine what the property would generate in tax revenue if held by a private owner. This amount, a payment in lieu of taxes of $159,000 per year, will be paid to the City until construction commences and tax payments are initiated by the developer.
…. If, however, construction does not begin by July 1, 2013, the City maintains ownership of Hayward Place, as well as the $13 million plus the interest and over $2 million in other payments already received.
Okay, good to hear. However, a couple points:
First, saying that the property would only bring in $159,000 in tax payments is hard, HARD to believe. A condo tower would generate a lot more than $159,000 in tax payments – the assessor appears to have considered the value, as it is today – an undeveloped piece of land.
Second, – huh??? If construction does not begin by 2013 …??? How about demanding 2007, 2008, or 2009???
Bottom line, the city (and BRA) should not be a landlord, except in extreme cases. This is not an extreme case. This is prime real estate! It would be best if the city “strongly-encouraged” Millennium Partners to begin construction on a building of any sort – be it residential or commercial.
That block is underused (and undertaxed!). There’s no time like the present to get something up there.
– from the Boston Redevelopment Authority
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