Fliers Of Frustration

In their fight for work, union electricians have menacing billboards, a flashy Web site, high-priced campaign organizers and an inarguably badass slogan ("STOP BIOTECH LOOTING") on their side.

Boston’s carpenters have … some dimes for photocopies.

Last week, the carpenters tried to drum up some outrage in Banker & Tradesman’s home neighborhood, Fort Point, by putting fliers on every automobile in sight with a photo of AvalonBay’s VP of construction. He’s "WANTED," we learned, "For SUPPORTING TAX CHEATERS," by using "subcontractors who cheat the state of Massachusetts out of TAX DOLLARS."

So, Fort Point office workers, if you didn’t catch that story in your newspaper two months ago, when it was news, well, now you know.

Bankruptcy No Answer For Broadway

The John Hancock Tower isn’t just a tall, glittering cautionary lesson, Boston’s answer to the spectacular failures of New York financier Harry Macklowe. It’s also the source of the hottest parlor game in town.

SL Green Realty Corp. is scheduled to auction off the iconic tower March 31, after the tower’s owner, Broadway Partners, defaulted on $700 million in mezzanine debt in January. There’s been rumblings about the possibility of Broadway seeking bankruptcy protection, rather than see its carcass picked over for the public’s enjoyment.

Here’s why bankruptcy would just be forestalling the inevitable:

Broadway doesn’t have any cash to pay off its creditors. If it did, it wouldn’t have defaulted on its mez debt in the first place. And the market conditions that created Broadway’s cash crunch – soft rent prices, escalating vacancies and a shortage of leverageable capital – are getting worse, not better.

There’s an inconvenient fact at work here. Broadway may own the building, nominally, but its equity has long since been wiped out. When Broadway won the Hancock in 2006 as part of a $3.3 billion portfolio acquisition, it only sunk $200 million of its own cash into its shiny new $1.3 billion toy. It made up the difference between that sliver of equity and its $640 million mortgage with short-term mez debt. Estimates have pegged the Hancock’s value at somewhere between $700 million and $900 million; given grim rental income prospects and the dearth of capital out there, any sale price would likely settle on the lower end of that spectrum.

Even if the building did sell for $900 million, Broadway’s $200-million stake would be long gone, wiped out alongside $200 million worth of mez investments. As things stand now, Broadway isn’t making any money owning the thing; they’re just keeping the lights on for their investors. It’ll be years before prices rebound to the point where Broadway’s back in the money. And they don’t have years – months are the best they’ll do in bankruptcy.

It’s notable that, when asked who’ll eventually land the troubled icon, industry insiders of all stripes name the tower’s former owner, Beacon Capital Partners. Beacon has cash, and they pulled a tidy profit the last time they bought and flipped the building. If Beacon can land the Hancock for close to, or less than, the $910 million the firm paid for the building back in 2003, why not pull the trigger?

Pass The Bacon

Pork is distasteful and evil and stuff. Except when you’re the one at the table, fork in hand.

Earlier this month, Congress haggled, spat and ultimately passed a $410 billion omnibus bill – one that, as critics delighted in pointing out, was stuffed with 9,000 earmarks, totaling upwards of $12.8 billion in spending.

A sliver of that bacon came home last week, as Congressman James McGovern visited Westborough and announced he’d carved out $285,000 in omnibus spending for the area. The allocation will fund design and engineering studies for an expanded Route 9/I-495 interchange, on the Westborough-Southborough line. McGovern called the interchange "a serious public safety risk and a major impediment to economic growth."

Paul Matthews, executive director of the 495/MetroWest Partnership, said a reconfigured interchange would be "exceedingly well-positioned to accept growth." Several corporations, most notably data storage giant EMC Corp., call the area home. EMC is planning a 2.2 million-square-foot expansion to its corporate campus in Southborough. Matthews points to 5.8 million square feet of commercial development within a mile of the interchange, and believes that a number of other parcels along the roadways could ultimately host several million more square feet of development.

"We want to make sure development is occurring where it can be handled," Matthews said. He added that MassHighway is "quite optimistic that the funding will make a huge difference" because a massive federal highway spending bill is looming. "There will be a significant funding opportunity coming. The congressman was very direct – he wants to position this project for consideration. The stimulus bill illustrated that, if the design is done, a project is much better positioned to receive funding."