As the FBI continues to conduct its fumbling search for a Boston-area development site for its new regional headquarters, one can’t help but wonder, in this stimulus-driven age, how the project could be helping things right now had the situation been handled better.
Even if the FBI’s rumored deal with the Pappas family sticks, we are still talking about another 18 months to two years of planning before a shovel hits the ground. That’s better late than never, but the estimated 500-plus construction jobs the project will generate are desperately needed today.
“It’s like the government does not look at any of these things in the big picture of everything that is going on,” noted Joseph Torpy, a veteran Boston real estate lawyer. “[One] guy has a job filling a pothole when you could have 500 guys working on a new building.”
Real Estate Merry-Go-Round
It all seemed pretty cut and dry when the story broke in 2007. A bevy of developers quickly emerged to take a run at what promised to be a blockbuster project, a $200 million high-tech federal fortress.
But what followed has been anything but cut and dry.
First the FBI and its real estate handler, the General Services Administration, popped up on Fan Pier next door to the new federal courthouse.
Certainly, landing next to the John Joseph Moakley U.S. Courthouse would have cut down on some commuting time for our local G-men, but the waterfront site didn’t work in the post-9/11 era. With the FBI’s demand for 100-foot curb setbacks and a bomb-proof facility, some feared the new project would not exactly enliven the long-dormant South Boston waterfront.
Undaunted, the FBI moved inland and began toying around with other development sites near, but not on, the waterfront. The feds looked at a site near the new Boston Convention and Exhibition Center before shifting their focus to a vacant lot near the new Channel Center condo high-rise in the Fort Point Channel neighborhood. That was followed by a foray out of Boston altogether, to look at an industrial site in Chelsea, before the FBI refocused their hunt in the Hub.
This time, the feds turned up at the Boston Herald, whose publisher hopes to someday develop the old, red-brick newspaper factory into a modern development. Alas, those talks failed as well.
Now the FBI appears to have finally found its man, so to speak, homing in on a development site in South Boston, not far from the Herald, controlled by the Pappas family.
And this time, it looks like a deal may actually get done. But it should never have taken anywhere near this long.
Missed Opportunities
Sure, the FBI had some serious security requirements, everything from steering clear of locations with nearby buildings in which snipers could set up shop to a sensible prohibition on any underground parking beneath the new command center.
But the real reason for this extended tour of every new development site in Boston seems to be the real estate equivalent of going out to nab the bad guys but failing to pack enough bullets.
Basically, one deal after another has collapsed when various developers got a real look at the FBI’s building budget and realized they would end up losing money on the deal.
The rental rates the FBI was proposing to pay were well below the going market rate by as much as 20 percent.
Instead of pushing the higher-ups in Washington to beef up the budget, the feds and their GSA real estate handlers chose to keep riding the real estate merry-go-round.
“The land costs and the economics are fairly straightforward,” said one construction industry expert. “When I looked at it, there was no way anyone could build the building and break even. They wanted a very special and unique building.”
But even if the feds finally announce a deal, as expected, in a week or two, the damage will have already been done.
Maybe City Hall and the Patrick Administration will find a way to fast-track this deal, but we could be looking at another 18 months to two years of planning and permitting before the first shovel goes into the ground.
Sadly, we will probably still need the jobs then, given the wreck of an economy we are struggling with right now. But try telling that to the thousands of unemployed construction workers in Boston today who can’t find work.
One top Hub construction executive said he believes the real jobless rate for the industry in the Boston area is close to 50 percent.
“It’s foolish,” the executive tells me. “They could have done this deal nine months ago.”
No Bargain
As damning, though, is the fact that taxpayers like you and I will end up paying much more for the FBI’s new fortress than we ever should have, thanks to the bureau’s inability to land a site.
If the FBI and the GSA had managed to cut a deal back in 2007 or 2008, work would have begun by now and the feds would have locked in some of the lowest construction prices in decades.
As it stands now, building costs are 20 percent below their boom-time levels. But with the economy starting to stumble its way out the recession, it seems likely prices may have already hit bottom.
Wait another year or two, and you can kiss any hopes of a bargain goodbye.
Just take a look at Boston’s new convention center, not far from where the feds want to build their fortress. The project, first conceived in the 1990s, did not get into construction until 2000 – just in time to run into an historic run-up in building costs. The final price-tag ended up north of $800 million.
Let’s just hope the FBI’s fumbling real estate search does not wind up pushing taxpayers into the poorhouse as well.
