What in the world is there to worry about right now if you are a Boston developer? After all, Hub condo prices are going through the roof, office rents are soaring and one new tower after another is taking shape on the skyline.
Well, missing the market cycle, for one.It might seem a little morbid to be fretting about the next recession just as we’re finally come out of the last one, which was bad enough and then some. But don’t tell that to Don Chiofaro.
The International Place developer can tick off the grand projects in Boston that wound up fizzling out, having failed to get into construction and open before the market turned. And Chiofaro is all too aware that the clock is ticking right now for his latest proposal, a massive and controversial plan to level the ugly Harbor Garage and raise two of the tallest towers ever seen in Boston on the garage’s valuable waterfront perch.
And, in a recent interview, this former Harvard football player and bulldog of a developer – Boston’s answer to Donald Trump – acknowledged that he, too, is worried about missing the market.
“I am,” Chiofaro said. “The cemeteries are littered with the graves of developers who got their approvals at the top of the market. They missed the cycle.”
Of course, it’s certainly in Chiofaro’s interests to urge city and state officials to speed up their review of his proposed twin tower complex on Boston’s waterfront, a gargantuan plan that would cram 1.3 million square feet of new condos, five-star hotel rooms, deluxe corporate suites and retail shops onto a 1.3 acre site. Yet anyone who has followed Boston development over the years also knows that Chiofaro’s ruminations, while self-serving, also have more than a grain of truth to them.
Fan Pier missed two market cycles, languishing for nearly 20 years before Hub waterfront developer Joe Fallon came to the rescue and got the multibillion-dollar project into construction. In 2000, city officials gave a green light to a tower over South Station – which we’re still waiting for.
Sure, market cycles are fickle. And when everyone starts to say prices can never go down – as is increasingly the case with the superheated Boston condo market – then it’s time to look out for the next bubble.
Turning The Battleship
But the real problem is that it simply takes too darn long to get a project through Boston’s cumbersome development review process, which is particularly prone to freezing up when dealing with a very big and very hotly contested proposal like Chiofaro’s.
Chiofaro got a major break when former Boston Mayor Thomas M. Menino, a bitter foe who all but declared the developer’s plans dead on arrival, decided to retire. Marty Walsh, Boston’s new mayor, has made it clear he wants to speed up the city’s project review process; back in June, he signaled he would take a fresh look at Chiofaro’s plans.
But turning around the Boston Redevelopment Authority is no quick-fix, overnight job. For now, anyway, it looks much like the same old slow-moving city process, until proven otherwise. In fact, Chiofaro, who first proposed his mega towers back in 2009, hasn’t even managed to formally start the development review process over at City Hall, known as Article 80. Instead, he is first faced with slogging through a harbor planning review panel, which has to approve an exemption to strict state waterfront building regulations that ordinarily would cap any new project at a piddling 200 feet.
Chiofaro says he hopes to finally get through the harbor planning process by late this year or early next year, after which he hopes to kick off the review process before the BRA. Wisely, he declined to predict exactly how long it would take to get a green light from City Hall that would allow him to move forward.
But for the sake of argument, let’s say things go just as Chiofaro hopes – the BRA moves with record speed, and Chiofaro finds himself with all his approvals and ready to start construction next fall. He is then faced with a 24- to 30-month construction period for his two towers, putting the earliest possible opening off until 2017 for the first sky-rise, followed by the second in early 2018.
Given That the so-called economic recovery officially began in mid-2009, Chiofaro’s towers would open nearly a decade into the expansion. That’s a long time when it comes to market cycles – the celebrated ’90s expansion began slowly in 1991 before going out with a bang in mid-2001.
And of course, estimates on how long it will take to get through the City Hall gauntlet should be read more as wish lists than realistic estimates. Tack another year or two onto this timeline and suddenly things don’t look so rosy after all, with Chiofaro’s towers opening in 2019 and 2020.
The market right now is golden, with strong and still-rising demand for offices, condos and hotels, but as with all wonderful things, Chiofaro knows there is an expiration date.
“We are in an excellent period of time right now,” he said. “Do I think it will last forever? No, I don’t.”
But wait, because there’s more. We haven’t gotten to what may be Chiofaro’s biggest obstacle beyond the sluggish City Hall bureaucracy – angry neighbors.
You see, Chiofaro’s towers would block more than a few views over at the neighboring Harbor Towers complex, which, as chance would have it, also depends on the hideous garage for parking and to house its mechanical systems. The neighbors aren’t happy – and they’ve hired their own public relations firms and development consultant to do battle with Chiofaro. Combine irate neighbors with the slow-moving City Hall review process, and you have every Boston developer’s worst nightmare.
So worrying about when the next downturn might hit may not be so extreme after all. Especially if you are Don Chiofaro, trying to build one of the most ambitious, contentious and time-consuming projects Boston has seen since the epic battle over Fan Pier.
Email: sbvanvoorhis@hotmail.com
