A company comprised of the president of Delaware North Cos., owner of the Boston Bruins and the TD Garden, and other Bruins and company executives have offered $75 million to the MBTA to purchase the North Station garage.
Banker & Tradesman has obtained documents from the Secretary of State’s office that show John Wentzell, president of Delaware North, as president; James Bednarek, Bruins’ vice president of finance, as treasurer; and attorneys from Delaware North as directors of Garden Parking Corp.
Garden Parking was the only bidder for the property. In May, the financially-suffering MBTA put the 1,280-space garage – located underneath the TD Garden – on the market for a minimum bid of $70 million to purchase outright, or $65 million to lease it for up to 75 years.
Delaware North is already permitted for a 550,000-square-foot, 37-story residential tower with 361 units and 240 parking spaces along Nashua Street and Causeway Street, where the old Boston Garden was located. Delaware also has decades-old easements green-lighting access through the North Station garage’s southern wall to access a possible future garage, and would make use of existing ramps and entrances to access the new facility, according to previous Banker & Tradesman reports.
The North Station garage generates about $4.75 million each year, is less than 20 years old, and is selling for a price decidedly lower than it would cost to rebuild. A rarer asset would be hard to find. A garage like North Station’s would cost approximately $100,000 per space to build today, so at an asking price of $70 million, or roughly $55,000 a space, "you couldn’t build it for what you buy it for," Thomas O’Brien, managing director of HYM Investment Group that is planning to redevelop the Government Center garage, told Banker & Tradesman.
The MBTA is putting the garage up for sale in part to help pay down hundreds of millions of dollars in budget shortfalls and annual bond payments, according to reports. The agency is expected to collect $350 million from bond sales in addition to proceeds from sales of assets like the North Station garage.
The T’s larger budget plan involves refinancing debt and offering the next 30 years’ worth of parking income from its hundred or so other garages and parking lots statewide to investors for $300 million. The agency would retain rights to set the price and collect money at most of its parking lots and garages, but the North Station facility would be sold outright or leased.
The North Station garage is considered an anomaly in the T’s parking network. The MBTA was granted ownership of the garage in 1993, as part of a deal that deal allowed the T to run the old elevated Green Line underground through two levels of the garage.
The quasi-public transportation agency pays no taxes or insurance, and its utility costs are paid in bulk, so the garage has always had more value for the T than a private operator because the T’s operating costs are lower.
