CEO TAMARA SMALL TESTIFIES IN SUPPORT OF NAIOP LEGISLATION REGARDING UTILITY ACCOUNTABILITY

On Tuesday, July 9 NAIOP CEO Tamara Small testified before the Joint Committee on Telecommunications, Utilities and Cable in support of NAIOP bill H. 2861, An Act to Encourage Predictability in Utility Connections. Introduced by Representative Thomas Golden of Lowell, the legislation is targeted at addressing the frustrations the commercial real estate sector has expressed for years regarding the lack of transparency and predictability for utility connections at development projects. If passed, the bill will ensure that commercial customers, as well as new connections and relocations of existing connections, are included in the service quality standards.

NAIOP CEO Tamara Small testifying before the Joint Committee of Telecommunications, Utilities and Cable July 9,2019

Currently, when utilities request a rate increase, they are “graded” based on how they perform under the Department of Public Utilities’ Service Quality Standards.  Customer satisfaction, response times for service outages, and repairs and maintenance are some of the criteria considered under M.G.L. Chapter 164 §1E.  However, utilities are only judged based on their performance with residential customers, not commercial customers.  In addition, only existing connections, and not new connections, are included in the service quality standards.

“As we saw with the gas moratorium and lockout last fall, new utility connections are absolutely critical for economic growth,” testified Small. “Small business owners could not open their doors, companies could not relocate to new office space, and tenants who had signed leases for new apartments did not have a place to call home.”

NAIOP believes that by including commercial projects, the relocation of existing connections, and new connections in the review process, we will have greater transparency and accountability in the regulation of our utilities statewide. NAIOP will continue to advocate for the passage of this bill so that future real estate development projects could benefit from the proposed change.

Planning for a Changing Climate is a Shared Responsibility: Private, Public and Philanthropic Sectors Must Work Together

The following column was published in the July 7 edition of Banker & Tradesman.

NYC CLIMATE TRIP JUNE 2019In June, a group of business leaders, philanthropists and environmental advocates joined Boston Mayor Marty Walsh and his environmental team on a “City to City” trip to New York hosted by the Environmental League of Massachusetts and the Greater Boston Chamber of Commerce. As the CEO of an organization that has made climate change resiliency one of its top policy priorities, I was honored to be part of this distinguished group.

The trip was designed to provide attendees with an inside look at how Lower Manhattan responded to Hurricane Sandy and how the public and private sectors are planning for the future. During the walking tour, it quickly became clear that building owners and developers were the “first responders” post-Sandy. Whether through the installation of flood protection measures, nature-based solutions, the elevation of mechanical systems or innovative design measures, the commercial real estate industry is spending millions of dollars on climate change resiliency.

While these types of investments are critical, having a “climate–proof” building in the middle of a neighborhood without power or transportation provides no real public or private benefit.

During Hurricane Sandy, a 9.5-foot storm surge flooded the Hugh L. Carey Tunnel, which connects Brooklyn and Manhattan, with 60 million gallons of contaminated salt water, causing extensive damage. After the storm, the city installed 50,000-pound steel flood gates to protect against a 500-year flood event. Watertight flood walls were installed around the tunnel’s ventilation shafts. Hundreds of millions of dollars in FEMA funds were spent on the project.

If that was the cost for just one project, then one thing is very clear – addressing climate change through mitigation and adaptation will require massive amounts of funding and collaboration between federal, state, local, private and philanthropic entities.

What Does This Mean Locally? 
Boston is taking this issue very seriously.

In October, Walsh released the Resilient Boston Harbor Plan, which is designed to protect the city against the impacts of rising sea level and climate change. The plan includes elevated landscapes, enhanced waterfront parks, flood–resilient buildings and increased access to the waterfront. The city of Boston also became one of the first cities to set a target of carbon neutrality by 2050. Flood overlay zones are being developed, which will affect new construction and existing buildings.

At the state level, aggressive goals for reducing greenhouse gas emissions have been set, new energy efficiency codes have been adopted and comprehensive adaptation and mitigation plans are now being implemented. Nearly all of these policies and plans will affect the real estate industry.

For commercial real estate developers in the Boston area, climate change resiliency is a top priority. Extreme weather events, eroding shorelines and sea level rise have the potential to impact properties and tenants. As a result, new development projects are the most climate resilient. They are designed to take on the storms of the future and often include measures that will protect surrounding neighborhoods from the impacts of climate change.

Recognizing that while climate change cannot be ignored, economic realities still apply. If one sector of the market is overly burdened with new regulations and costs, resiliency measures will fail.

What’s the Solution? 
As the state and cities move forward with their climate resiliency efforts, flexibility is required so that the real estate industry can effectively address climate change without restricting future housing and economic development, which produce crucial property tax revenue. Regulations should provide owners and developers with the ability to make decisions based on the needs of the individual properties, tenancy and product type. Both costs and risks must be evaluated when considering climate change-related investments or regulatory changes.

Given the impact of climate change on all residents of the commonwealth, the burden for addressing this issue should be shared equitably. While an increase in the transfer tax has been proposed as a solution, it’s not the right approach. It only targets a subset of the population and may have the unintended consequence of driving up the cost of housing.

Lowell’s Rep. Thomas Golden, with the support of House Speaker Robert DeLeo, recently filed H3846, An Act Relative to GreenWorks. This proposal is a $1.3 billion energy and resiliency bill designed to offset climate change, creating a new grant program for cities and towns throughout Massachusetts to fund projects focused on climate resiliency. It is modeled after the successful MassWorks infrastructure program and builds on the Environmental Bond Bill passed in 2018.

Given the magnitude of this issue, no one piece of legislation can fully address climate change, but the GreenWorks legislation will set the commonwealth on a path towards improved resiliency. Its passage, combined with public-private partnerships and innovative solutions, will ensure continued economic growth and quality of life in Massachusetts as we tackle one of the greatest challenges threatening the future of the planet.

NAIOP Testifies in Support of Umbrella Liquor Licenses for Large Real Estate Development Projects

Earlier this month, NAIOP’s Government Affairs Associate, Anastasia Nicolaou, testified before the Joint Committee on Consumer Protection and Professional Licensure in support of H. 208, An Act Relative to Large Project Based Licenses. If passed, the bill would allow owners of large real estate development projects to apply for an “umbrella liquor license” with the local licensing authority, overseen by the State Alcoholic Beverages Control Commission. Under the “umbrella license” the local licensing authority would be able to issue restricted project-based liquor licenses for restaurants. These licenses would not be subject to the quota established in the Massachusetts General Laws. They would be tied to the property, not available for resale, and non-transferable.

Currently, liquor license quotas in a city or town in Massachusetts create a barrier for including restaurants in real estate development projects, weakening the project’s overall feasibility. In her testimony, Nicolaou underscored the importance of shop/work/live to the future of retail. Restaurants are critical components to the success of mixed use developments, which create jobs, tax revenue, and community centers for their residents and municipalities.

Nicolaou also focused on the important role of local government in the proposed process.

“This legislation allows the local government to participate in the decision-making process by requiring the adoption of a local ordinance or bylaw to allow this process within their jurisdiction,” said Nicolaou. “This encourages a partnership between the developers and local government as they work together for the future economic prosperity of the community.” NAIOP was pleased to testify in support of this legislation along with representatives from ICSC and will continue to advocate for passage of the bill so that future real estate development projects could benefit from the proposed change

The Science of Success: Bus Tour Recap

This post was written by BLDUP and originally appeared on their site.

Now in its 16th year, the NAIOP bus tour took several hundred CRE professionals on an info-packed trip through Waltham, Watertown, Newton, and Needham last week. The theme of the tour, the science of success, highlighted the continued growth of the 128 corridor as a hub of innovation in both the tech and life science fields. With the strong talent pool coming out of the areas many top colleges and universities, companies look to Boston to plant their flag. However, with extremely limited availability in Cambridge and rents continuing to rise, Boston’s tech highway is a more affordable option. All of these employees also need housing options, spurring development in the multi-family sector. Despite a few hiccups along the way (I survived the fabled orange bus) it was another enjoyable and educational NAIOP program.

Highlights of the Tour

225 Wyman
As part of the Hobbs Brook Office Park, 225 Wyman will be the largest contiguous Class A office building along the Route 128 “technology belt”. Currently, demo is wrapping up on the site and construction is set to be complete in 2021. The building, designed by Gensler, will include both office and lab space and the “H” shape of the allows for many leasing configurations.

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A rendering of the upcoming project at 225 Wyman Street.

828-830 Winter Street
Many life science companies in the market for space, need it ASAP! Looking to fill this type of demand King Street Properties has been building lab buildings like 828 Winter Street on spec. 828 Winter, completed in August 2018, is outfitted with a full MEP structure and column spacing to allow for an 11ft lab bench. The King Street team also discussed their upcoming project, Nexus Allston at the Allston Innovation Center. Currently, under review with the City of Boston, the development would include 3 buildings to feature office/lab, retail, and residential space. King Street expects to complete permitting by the end of this year and have first units/space ready for occupancy in Q1 2022.

Gauge
Hilco has completely renovated this 1940s-era brick-and-beam structure to provide creative office and R&D development space. Historic features of the building including high ceilings with expansive windows, skylights, and exposed brick interior walls. Utilities throughout the project were upgraded and a fitness center added to meet modern tenant expectations.

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Bus tour attendees arrive at The Gauge in Waltham.

Elan Union Market
Developed and Managed by Greystar, this 282 unit project welcomed residents in June of last year and is currently wrapping up construction on the final residences. The luxury development features numerous amenities including an art gallery, pool, and resident lounge. The project is currently 55% occupied and 75% leased.

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One of the resident lounge areas at Elan Union Market in Watertown.

Kendrick
At The Kendrick in Needham, the development team at Toll Brothers set out to create a not-so-typical apartment community. Their goal was to design a building with a high-end residential hotel feel that “made you look” with unique artwork, amenities, and finishes. Amenities at the Kendrick include an outdoor beer garden, fitness center with climbing walls, and a revolutionary coffee maker that allows residents to order coffee from their phones (said to cost around $10,000!).

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One of the many unique common spaces at The Kendrick.

Northland Newton Development
Our final stop of the day was at the historic Saco-Pettee Mill building to hear more about Northland’s vision to create a vibrant live, work, play gateway in Newton’s Upper Falls.  The proposed project calls for 800 residential units, 173,000 square feet of office space, and 115,000 square feet of retail. 9.8 acres of open space within the development including 7 parks will provide ample green space for residents and visitors and a new streetscape will allow for easy access for pedestrians and bicyclists. By converting an aging, obsolete industrial complex into a dynamic community, Northland aims to promote smart growth within Newton.

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A rendering of the proposed Northland Newton Project.

NAIOP Joins Mass. Municipal Association, Housing Advocates and Business Leaders in Support of Housing Choice Legislation

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On May 14, NAIOP’s CEO Tamara Small testified before the Joint Committee on Housing in support of H.3507, An Act to Promote Housing Choices. If passed, the bill would enable cities and towns to adopt certain zoning best practices related to housing development by a simple majority vote, rather than the current two-thirds supermajority.

Small testified on a panel with representatives from a coalition of groups responsible for permitting and building housing throughout the Commonwealth including Jon Robertson, Legislative Director at the Mass Municipal Association; Benjamin Fierro III, Counsel to the Home Builders and Remodelers Association of MA; Greg Vasil, CEO of the Greater Boston Real Estate Board; Robert Brennan, President of CapeBuilt Development; and Kathleen Franco, CEO of Trinity Management. The group expressed their strong support for the bill, which would make it easier for communities to enact local zoning changes that encourage housing development.

In her testimony, Small underscored the importance of partnerships between developers and the communities. “Any successful housing development requires a partnership between the developer and the community to ensure that the project addresses local needs,” said Small. “The legislation preserves that partnership by requiring a majority vote, while making it easier for communities to rezone property to encourage more housing production.”

Throughout the hearing, mayors, housing advocates, and business leaders, including Mayor Kim Driscoll of Salem, Mayor Joseph Curtatone of Somerville, the Metropolitan Area Planning Council, the Smart Growth Alliance, CHAPA, and the Massachusetts Business Roundtable testified in support of the bill and called on the Joint Committee to report H. 3507 out favorably.  

NAIOP will continue to advocate for passage of the bill as soon as possible. Because communities enact zoning changes at annual Town Meetings, quick passage of this bill is needed to ensure that implementation of these important reforms is not delayed another cycle.

NAIOP Files Amicus Brief in Marchese v. BRA: Brief Urges SJC to Uphold Superior Court’s Decision in Favor of BPDA

Law firm WilmerHale recently filed an amicus brief on behalf of NAIOP Massachusetts, The Commercial Real Estate Development Association, in the case of Joseph Marchese vs. BRA.  The amicus brief urged the Supreme Judicial Court to affirm the Superior Court’s decision in favor of the Boston Planning and Development Agency (BPDA), formerly known as the Boston Redevelopment Authority (BRA).

NAIOP chose to pursue this opportunity because the case addresses the “demonstrations clause” of the urban renewal statute, a critical economic development tool, which is often used for artistic, cultural and historical preservation in the City of Boston.  NAIOP believes that if the BPDA and similar agencies cannot use their statutorily granted powers of eminent domain to carry out demonstration projects and plans, it could chill development throughout the Commonwealth.

“We are grateful to the incredible team at WilmerHale for their work,” said Tamara Small, CEO of NAIOP Massachusetts. “Joseph Marchese vs. BRA has wide reaching implications for our industry and all of Boston. The BPDA’s success in this matter will benefit Boston’s continued economic development, as well as positively impact the City’s communities and public spaces alike.”

The WilmerHale team involved in the matter was led by Partners Keith Barnett and Michael Bongiorno and included Senior Associate Arjun Jaikumar and Associates Matthew Costello and Julia Harvey.

Oral arguments began on Thursday, May 9.

BPDA Director Brian Golden Speaks on Boston’s Development Climate at NAIOP’s Government Affairs Luncheon

This guest blog post was written by Meghan Doherty of BLDUP.

At a recent NAIOP Government Affairs program, hosted at the office of Nutter McClennen & Fish, Boston Planning and Development Authority (BPDA) Director Brian Golden discussed Boston’s current development climate and the upcoming planning initiatives his office is pursuing.

Director Golden opened with a brief history of the BPDA crediting Mayor John B. Hynes for starting the office in the late 1950s. During that time, as the middle class was moving away from cities into the suburbs, Boston saw its population drastically declining, which led to the creation of the Boston Redevelopment Authority. The newly created entity was tasked with promoting development in order to attract economic investment in Boston. It worked. Between 1980 and 2010, Boston’s population grew at a rate of around 1,500 people each year. Since 2010, Boston’s population growth has skyrocketed gaining around 8,000 additional residents each year.

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In fact, Boston’s rapid growth in the past 10 years has led to the BPDA adjusting its population projections. In 2014, just over 709,000 citizens were projected in the City of Boston by 2030. Revised projections have increased that number to 759,000. This population growth is driving development and planning throughout the city. Since Mayor Walsh has taken office, around $50M new square feet of development have been approved. Mayor Walsh’s administration has also increased the city’s housing goals from 53,000 to 69,000 new units of housing. Currently, Boston is ahead of pace for this goal since much of the development in the past few years has been residential.

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Director Golden also discussed the importance of the IDP requirements currently in place to bring middle income and affordable housing to the city. Since the IDP program began in 2000, nearly 2,600 income-restricted housing units have been built and over $137M has been raised in the Inclusionary Housing Fund. When asked about the possibility of increasing the IDP requirement from the existing 13%, Director Golden cited two examples from recent trips to Seattle and San Francisco. In San Francisco, IDP requirements are high, around 20%, and this burden has halted many projects. This policy, Director Golden believes, is an overreach. As he said, “20% of nothing is nothing.”  In Seattle, however, the IDP requirement is 11% and working well. His goal for Boston is to ensure that projects can move forward while also providing for the maximum amount of housing the market will allow.

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Other highlights from Director Golden’s presentation included:

  • New projects are increasing property tax revenue for the city at a record pace, and these are benefits that flow to all Bostonians. For 2019, the BPDA estimates an additional $77M in tax revenue from new projects alone. These funds are crucial to the city budget to maintain the high quality of life Boston residents expect.
  • Diversity is top of mind for the BPDA’s actions in the city. All RFPs for public land will include criteria to promote diversity and inclusion. The BPDA expects to see a robust plan for diversity and inclusion through all phases of the development including the development/design team through the workforce building the project.
  • The BDPA’s  Resilient Boston Harbor initiative, which will kick off public engagement this month, will focus on how all different types of existing and new projects can deal with rising sea levels. The BPDA’s goal is to use this opportunity to elevate the public realm. Golden cited Moakley Park as an example. Plans here will rework Columbia Road and Day Boulevard to build a natural barrier to deal with the predicted sea level rise while also creating a world-class park. 10% of the city’s capital budget will be devoted to building out pieces of elevated public infrastructure like this project.
  • The BPDA currently is working on 16 major planning initiatives across the city. A full list can be found here http://www.bostonplans.org/planning/planning-initiatives

During the Q+A, when asked what the biggest hurdles are for Boson to reach its 2030 goals, Director Golden cited transportation and affordability. Currently, his office is working on the Go Boston mobility study and stressed that ensuring quality public transit will be key to ensuring continued growth.

Director Golden’s presentation was a thorough overview of the state of development in Boston. It gave a positive view of the future of Boston’s economic and community-oriented future, and his comments gave attendees important insight into the goals of the BPDA over the next few years. It is clear that Director Golden has a holistic understanding of the landscape in Boston, and will continue to work with NAIOP members and other key stakeholders to plan for Boston’s future, while respecting its past.