Hub developers are fuming about Mayor Thomas M. Menino’s latest fiat, and rightfully so.
The mayor who proposed a 1,000 foot tower that never made it off the drawing boards now wants other would-be tower builders to show him the money before starting construction.
With the global financial system on the brink and a deep recession looming, any developer with the guts to get moving should be re-warded with a red carpet, not a brickbat.
But while it sometimes can be difficult to get a message through City Hall’s thick walls, there are signs that somebody just might be lis-tening on the inside after all.
John Palmieri, the Boston Redevelopment Authority’s new chief, says he’s still pushing ahead with plans to make the mayor’s edict a reality.
But from talking with Palmieri, it sounds like the mayor’s need to see the numbers will be accommodated in a way that developers can at least live with.
D.O.A. Loan Requests
The proposal, which could go before the BRA’s board next month, will require developers to share their financing plans. But it will stop short of demanding iron-clad commitments from banks and other financial institutions before a project is given a green light from City Hall.
“We don’t want to create additional barriers,” Palmieri said.
That would have been the kiss of death for any development plan, contends David Begelfer, chief executive of the local chapter of the National Association of Industrial and Office Properties.
No bank will lend money to a developer to build unless a project has made it through the city’s review process and has all its permits lined up, he notes.
“This could be a problem of unintended consequences, of really putting the stop on projects that would forward,” Begelfer said.
And city officials are also preparing to soften their demands on another key point as well. The financing requirement, as first proposed, would give developers 18 months to get started or face having to come back to City Hall to explain the delay.
That timeline, however, is likely to get extended when the final draft is presented to the BRA board in October, Palmieri said.
Palmieri insisted developers in town have no problem with the proposal — the line of a good company man. But he acknowledged hav-ing some extensive consultations with the leaders of the area’s top real estate and development trade groups.
Still, this is the last thing any developer who is scrambling just to keep his project alive in a brutal economy needs to be dealing with.
In this case, I am thinking of John Hynes, the developer behind the $600 million-plus Filene’s redevelopment. A successful downtown tower builder whose grandfather was one of Boston’s more notable mayors, Hynes began demolition this spring to make way for a new high-rise next to the old Filene’s building.
Then the credit markets seized up, slowing the pace of work on this key downtown project. Unfortunately, it also drew the mayor’s wrath, prompting the demand for financing plans from developers.
Unreality
Sadly, the new rule, whatever way it’s written, is not likely to ever work as intended.
Just take Columbus Center and Kensington Place. The two biggest development flops in recent Boston history, both saw their finances scrutinized and questioned.
Columbus Center was pitched as a gleaming high-rise on a deck over the ugly Turnpike canyon that divides the Back Bay and the South End. But the would-be construction site instead now looks like a strip mining site in Colorado after developer Arthur Winn ran out of cash shortly after starting work.
But City Hall’s new plan to force developers to show their financing cards would not have prevented this train wreck. In fact, Winn, who sought a myriad of state and city subsidies, submitted reams of paperwork, some signed off on by top city officials, attesting to the pro-ject’s supposedly solid financial footings.
Down on Lower Washington Street, there is the lovely, fenced off crater where the historic Gaiety Theater once stood. Kensington De-velopment years ago won City Hall’s approval to bulldoze the old vaudeville theater and replace it with a luxury apartment and condo tower. The demolition happened, but the tower didn’t.
It’s not that anyone didn’t warn City Hall that this would happen. A coalition of historic preservationists and neighborhood activists fought tirelessly to save the theater. Opponents argued the developer, a travel agency owner with no major project experience, would simply try and flip the site, leaving a barren hole in the ground.
But City Hall was determined to see the project move forward, even taking part of the site by eminent domain to clear the way.
City Hall can require all financing plans it wants. But maybe, in turn, city officials could agree to use a little common sense.
