Zoning Legislation Will Hinder Housing Production In Massachusetts

In response to the June 2, 2014 Boston Globe editorial, “Sprawl takes a fall?,” NAIOP Massachusetts submitted the following Letter to the Editor: 

A recent Boston Globe editorial titled “Sprawl takes a fall?” urges the Legislature to pass zoning legislation with the incorrect assumption that the bill will result in the production of more reasonably priced housing. Unfortunately, the legislation would actually hinder, not encourage, the production of this much needed housing.

The bill makes a number of changes to the zoning law, Chapter 40A, which would apply statewide. However, many of the other changes would apply only in “opt-in” communities.  Key parts of the bill would limit predictability and add financial risks for expanding businesses in the Commonwealth. For these reasons, all of the industry trade groups in the state representing builders and developers strongly oppose this legislation.

The lack of workforce housing is a barrier to economic growth, limiting the ability of business leaders to attract the best talent when competing with other states with lower costs of living. Instead of passing this very problematic bill, we urge the Legislature to work with the Administration, municipalities and the business community to create a new program that truly encourages the production of denser and more affordable housing.

David I. Begelfer
CEO
NAIOP Massachusetts, The Commercial Real Estate Development Association

 

Boston’s Game-Changing CRE Developments on Display at 2014 NAIOP MA Bus Tour

The following blog post was submitted by David Fleming, Principal at PACE Communications Group, a marketing firm that works with CRE companies to promote properties and help lease space.

Elisif_20140514_6876The 2014 NAIOP Massachusetts Bus Tour,“Changing the Game in Boston Real Estate” lived up to its name as attendees got an up close look at game-changing development projects across the city. The tour covered dozens of new and redevelopment projects in Allston, Brighton, the Fenway, Back Bay, the South End, and the Seaport/Innovation District.

Here are just a few highlights:

Game-Changer in Brighton: NB Development’s Boston Landing

Elisif_20140514_6950The tour kicked off in Brighton as attendees watched a presentation on NB Development’s exciting new Boston Landing project. NB Development Group managing director Jim Halliday, HYM Investment Group founder Tom O’Brien, founding principal of Elkus Manfredi Architects, David Manfredi, and others provided an overview of the spectacular transit-oriented, mixed-use project.

When complete, Boston Landing will feature 650,000 square feet of office, 180 hotel rooms, 65,000 square feet of retail, a world-class indoor track facility, a dedicated MBTA commuter rail station, and significant public space. A game-changer in Brighton, for sure.

Skanska & WS Development Star at Seaport Square

Elisif_20140514_7068At the Boston Innovation/Seaport District, attendees visited another game-changer, Seaport Square. Here, Skanska USA is building three projects totaling close to 1.2 million square feet. Project partner WS Development is responsible for bringing the ground level retail to each building.

Brian Sciera of WS Development explained the company’s mission at Seaport Square is to create energy and excitement where buildings meet the street. To WS Development, energy means retail. And, fashion retail, in particular.

“The backbone of any good retail district is its fashion component,” said Sciera. “Fashion brings that energy to the street by driving interaction between people and buildings.”

Sciera said WS Development is in discussion with several well-known retailers, but was not at liberty to disclose names.

The Skanska USA buildings at Seaport Square are:

  • 101 Seaport: located on Parcel L1 across from the Boston Innovation Center, the office tower will be the new Boston headquarters for PwC
  • 121 Seaport: located onParcel L2,the 17-storybuilding willconsist of 400,000 RSF of office space and ground level retail
  • Watermark Seaport: located on Parcel K, the project will consist of a six-story building and 17-story residential tower, including 346 luxury rental units and 25,000 square feet of retail (Watermark Seaport is a JV with Twining Properties)

Fenway’s Other Big Papi: Samuels & Associates

Elisif_20140514_7119When you’re talking about development in the Fenway Triangle, you’re talking Samuels & Associates. With more than $1 billion invested in the neighborhood, Samuels is Fenway’s other Big Papi.

Just down Boylston Street from The Trilogy and 1330 Boylston, the NAIOP tour buses rolled by Samuels’ latest two projects: The Van Ness and The Verb. The Van Ness is a 22-story, 320-unit apartment building that’s under construction and will be home to downtown Boston’s first Target. And, recently underway, The Verb is a 43,000-square-foot boutique hotel project at the site of the former Howard Johnson’s.

At the Landmark Center, bus tour attendees were treated to lunch by area favorite Tasty Burger. Samuels’ Joel Sklar and Peter Sougarides were onhand to discuss the company’s Landmark Center expansion project, which they described as a complete “rethinking of the former Sears building.” In addition to renovating the interior, updating infrastructure, and removing the above ground parking garage, Samuels plans to create a “world class food market” anchored by Wegman’s.

By adding the Landmark Center expansion to development projects The Van Ness and The Verb, Fenway’s other Big Papi has struck again.

A Game-Changing Tour

Elisif_20140514_7224Highlighted by Boston Landing, Seaport Square, and the new Fenway Triangle projects, NAIOP Massachusetts’ “Changing the Game in Boston Real Estate” bus tour lived up to its name—and then some.

Coakley Discusses Issues at NAIOP/AIM/Denterlein Forum

This post was written by Christopher Geehern and originally appeared on the AIM Business Insider Blog.

Attorney General and Democratic candidate for governor Martha Coakley outlined her opinions about health-care cost control, economic development and other issues this morning during a forum sponsored by AIM, Denterlein and NAIOP Massachusetts.

It was the first of a series of conversations that the three organizations are hosting with the major gubernatorial candidates. Coakley shared her views in an interview format with former news anchor and current Denterlein advisor R.D. Sahl.

The objective is to allow employers to review each candidate’s positions on important issues. AIM posted a video from a portion of today’s event.

Republican candidate Charlie Baker will appear next Monday, May 12, at 7:30 a.m. at the UMass Club in Boston. Democratic candidate and current State Treasurer Steven Grossman will speak on Monday, May 19 in the same location.

NAIOP members are welcome to attend the two remaining sessions, though seating is limited. Please make your reservations by contacting Nicole Iannucci at niannucci@denterlein.com or by calling 617-482-0042.

Highlights from Boston: The Investment World’s Newest Heavyweight

Elisif_20140417_6337This post was submitted by T.J Winick, Vice President at Solomon McCown.

Event Photos  |  Curbed article  |  Banker & Tradesman article  |  Recap Video

NAIOP’s recent event, Boston – The Investment World’s Newest Heavyweight, assured us once again that Boston is in the city to invest in when it comes to commercial real estate.

Throughout the event, panelists including Charles River Realty Investors President Brian Kavoogian, Cushman & Wakefield New England Area President Rob Griffin, AEW Managing Director Bob Plumb, DivcoWest CEO Stuart Shiff, and Blackstone Principal Jacob Werner touted Boston’s young and vibrant workforce along with its high level of innovation, top-notch schools and universities, and impressive CRE market. “[Here in Boston] it’s a very well educated labor force that draws from traditional financial services, technology and a growing biotech business,” said Werner.

The city is the 5th largest office market in the U.S. and is currently second only to San Francisco in terms of CRE vacancies. While panelists made several favorable comparisons between Boston and the “City by the Bay”, San Francisco is, unquestionably, the leader in development. It has a total of 3.5 million square-feet under construction at the moment, compared with Boston’s 2 million square-feet. San Francisco’s overall rental rates are overall back at 2007 levels while Boston remains approximately 20 percent below 2007 rates; in fact, Boston’s rental rates are still considered “cheap.” However, based on the city’s similarities (coastal, hubs of innovation) and with the belief that San Francisco is a bellwether, Boston’s CRE outlook remains bullish. “There’s real scarcity in [Boston] and scarcity is how you ultimately create value,” noted Kavoogian.

Another area of comparison: Massachusetts trails only California when it comes to NIH Funding. According to Cushman’s Griffin, Massachusetts General Hospital alone receives more NIH dollars than 90% of states. He also noted how the biotech and biopharmaceutical sectors continue to add more and more jobs and create new drugs. “If you’re a global investor and you look at Boston,” said Plumb, “you’ve got all the ingredients for job growth.” And the Boston area’s hottest markets for start-ups (Boston, Cambridge, and Waltham) have experienced an impressive 318 new deals as the market has bounced back. “Focusing on those markets that are both gateway and technology-related markets has been appealing to us,” said Shiff.

In addition to those three markets, there is also hope for Boston’s Central Business District (CBD) despite all the Seaport District’s development. The CBD is currently experiencing 15 percent in rent growth. The panel felt that once the CBD integrates more residential and retail projects into its urban dynamic, it will become “gold”.

Although the panel’s take was overwhelming positive, they did caution listeners to keep a couple of things in mind: Boston has 25,000 new apartments (many which are luxury) inside Route 128 currently under construction. It’s crucial the region creates jobs that meet those rents and attracts a suitable workforce. Also, in terms of capital markets, the industry needs to start thinking about rising interest rates–which are likely to increase as the economy continues to slowly improve.

Patience Not Panic Needed with BRA

A recent Globe article stated that three months into Mayor Walsh’s term, “the pipeline of major new (development) proposals has slowed to a trickle.” The implication is that the transition from the Menino Administration has left the Boston Redevelopment Authority rudderless.

I disagree. The final days of 2013 cannot be viewed as the norm for the Menino Administration. Virtually any developer with a project was aggressively pressing for its approval prior to year’s end. The BRA, most likely, set a record for the number of projects permitted.

Given that the Walsh administration has begun an in-depth audit of the BRA, it does not seem unreasonable that city leaders be given time to properly review the current process and propose needed changes in how projects are reviewed and permitted.

Less than 90 days have passed since Mayor Walsh took office. The last mayor had 20 years to shape the BRA’s review process. Before anyone questions the competency of the Walsh Administration, they should allow city leaders to get to know how the city operates and give them adequate time to make changes that could result in a stronger, more vibrant Boston.

NAIOP Responds to Boston Globe Article

A February 23 article in The Boston Globe gives the impression that the development community encouraged the Massachusetts Department of Environmental Protection (MassDEP) to reduce standards for site cleanups to allow for faster approvals for developers. On the contrary, no part of the commercial real estate community either initiated or encouraged a review of the lengthy list of cleanup standards. The regulatory changes that are about to be released are a part of an agency-wide review, made all the more important by the need for this agency to be more efficient, given its limited resources.

In 1983, the legislature established an oil and hazardous waste cleanup program, Chapter 21E, formalizing the process for MassDEP to manage disposal sites. But with too few cleanups, unclear rules, delays in Department approvals, and insufficient resources, the cleanup process for contaminated sites quickly bogged down.  In response to this situation, the legislature overhauled Chapter 21E and the promulgation of regulations under the Massachusetts Contingency Plan (MCP) in 1993 created a new privatized, risk-based program. It eliminated the MassDEP backlog and allowed the Department to focus on the most complex sites.  Within the first two years of the program’s implementation, there were more than 3,200 permanent site cleanups. The success of this program made it a national model.

The MCP requires contamination to be cleaned up to a level that protects people and the environment, taking into account both the present and future use of the site. MassDEP developed conservative, detailed, contaminant-specific lists of both reportable concentrations and cleanup standards, based on the toxicity and mobility of the contaminants involved. Risk characterizations are used to determine whether detected contaminants pose a threat to human health or the environment and whether further comprehensive response actions are required.

The recent changes to these standards include some values that were increased, but also others that were decreased.  Each change was based on the latest scientific literature.  If MassDEP establishes a value based on science, does it not have the responsibility to adjust it either up or down, as the availability of new data dictates?

Massachusetts residents and businesses can and should continue to rely on a proven and protective program based on legitimate technical considerations. Emotional criticisms of every change in these standards are not conducive to the objective, science-based decision-making that has allowed Massachusetts to achieve a stellar track record in the successful transformation of blighted, contaminated sites into safe and productive community assets.

We Need Jobs, But Also Skilled Workers

computer_handsThe Boston Globe recently reported that “the state’s tech sector is growing fast, but a shortage of qualified workers is preventing Massachusetts from becoming the capital of the nation’s innovation economy”, according to the 2014 State of Technology Report released by the Mass Technology Leadership Council. “Creating the jobs isn’t the hard part – filling them is the hard part,” said Tom Hopcroft, chief executive of MassTLC. “We can’t find enough people with the skills to fill all of these tech jobs.”

These are not the only types of jobs that remain open according to this Boston Globe graphic, which shows that it is not just the high end tech jobs that are having trouble finding workers.

So, what is worse – not having the jobs, or not being able to provide the workers for those companies that are expanding? It should be the former.  Trying to create new jobs is not only difficult, but there is actually no proven way to do it.  If what we have is a gap in training, or the proper transportation to access trained workers, we should be able to remedy that.

Local and state government should be partnering with local community colleges, vocational schools, and universities to work directly with those businesses that are fortunate enough to be growing and hiring.  If we don’t fix this imbalance expeditiously, we may have bigger problems.  Companies will begin expanding elsewhere and, then not having any local jobs to fill would be a lot worse.