A city watchdog agency is questioning a plan to turn the Winthrop Square Garage in Boston’s Financial District into the city’s tallest skyscraper.
Not so fast. Those are the three words that a city watchdog agency has for Boston Mayor Thomas M. Menino and his plan to turn a parking garage into the Hub’s tallest skyscraper.
In a report expected to be released next month by the Boston Finance Commission, an independent agency that monitors the city’s finances, the terms of the Boston Redevelopment Authority’s Request for Proposals for a 1,000-foot skyscraper in the Financial District raise questions about the deal.
“The biggest problem with the RFP is that it does not comply with the law,” said commission Executive Director Jeffrey W. Conley in reference to Chapter 30B, the Uniformed Procurement Procedures Law, which requires an open and fair competition when municipal property is disposed. “The project could be a good deal for the city, but not the way the RFP is written.”
In November, Steven B. Belkin, chairman of Boston-based Trans National Properties, was the sole developer to respond to an RFP for an 80-story building to be constructed at 115 Winthrop Square, the site of a city-owned parking garage. If approved, it would tower over the John Hancock Tower by 18 stories.
At issue is potentially millions of dollars in future revenues from the city-owned parking garage. Under the provisions of the RFP issued last spring, the city plans to transfer ownership of the Winthrop Square Garage – located at the intersection of Franklin, Federal Summer and Devonshire streets– to the BRA, the city’s planning and development agency.
‘A Red Herring’
But Conley argues that if the BRA owns the garage until the parcel is sold to a developer, the planning agency – not the city – will be the beneficiary of millions of dollars in parking fees until construction begins on the tower. The BRA is a quasi-government entity that has its own budget and generates much of its own revenues through ground leases and facilities.
“We think the money should go to the city and not the BRA,” said Conley. “There should be two separate transactions: one bid for who will operate the garage, separate from who builds the tower. It could be the same person, but a bid is still required.”
The amount at stake is huge, Conley noted. The lease agreement negotiated in the 1950s provides the city with $75,000 annually from the 4-story garage operated by the First Federal Parking Corp. Since then, parking revenues at the facility have soared. Today the garage brings in $2.5 million annually.
“The lease expires on June 30 and should be rebid,” Conley said. “Given that it can take years before the tower is built, we’re talking about $20 million that could be in the city’s coffers.”
In an interview with Banker & Tradesman, Menino dismissed the criticism. “Jeff Conley doesn’t understand the project and it’s unfortunate that he’s throwing a red herring out there,” said Menino. “He can do that, but we will continue to move the city forward legally and everything we do will be aboveboard.”
Still, Conley said he fears a repeat of Hayward Place, a city-owned surface parking lot on Washington Street that the BRA took by eminent domain in 2001. The BRA sold the lot to Millennium Partners-Boston for $23 million, which plans to construct a 155-foot-high building with 225 loft-style condominiums and ground-floor retail, Conley noted.
Millennium made a down payment to the BRA of $13 million that was intended to be used for construction of a new school in Chinatown. The other $10 million has not been paid and the school has not been built, Conley said.
For the first two years of the lease, Millennium made annual payments of $532,000 to the city. Now, Conley said, the company operates the parking lot but the city receives none of the proceeds.
“When you look at Hayward Place, it’s been six years and it’s still a parking lot and the developer is still operating it, taking all the money,” Conley said. “Millennium has still not paid the full purchase price and no taxes are being paid on it because it is owned by the BRA. It’s ridiculous. We estimate the city has lost as much as $7 million. The same thing can happen again if the BRA is in control of the Winthrop Square parcel.”
Last month, the BRA’s board of directors recommended the tentative designation of Trans National to develop the 115 Winthrop Square site. The board’s recommendation is the first milestone for the downtown project, which is expected to carry the distinction of being Boston’s tallest building and would boast a total of 1.5 million square feet of office and retail space, as well as an acre of public space. The locally based development team includes world-renowned architect Renzo Piano.
Trans National has 90 days to submit a financing plan to the BRA that should include an acquisition fee established by an appraisal of the site. The project plan then will be reviewed to determine whether it is financially viable. A recommendation could then be made to the BRA to grant the final designation, setting into motion the Article 80 public review process.
“There are lots of questions that remain,” said Conley. “Who will do what and when will they do it?”
