.

Copley Place Expansion Approved Despite Protests

The Boston Redevelopment Authority board unanimously approved the $500 million project.

The Boston Redevelopment Authority board lent unanimous approval to the Copley Place expansion project on Thursday despite protests from neighbors who called the development “immoral and illegal.”

The $500 million expansion includes 70,000 square feet of new retail space, restaurant space and a public atrium. A 47-story residential tower containing 318 units will rise above the existing commercial building, becoming the tallest residential building in Boston at 625 feet.

“The new project will build on the strengths of the existing Copley Place complex…and infuse an already successful retail destination with an inspired and dynamic mixed-use development,” the BRA wrote in a press release.

The project is expected to create 1,700 construction jobs and 270 permanent jobs once completed. It will also generate approximately $7.2 million in annual property tax revenue.

Construction is slated to begin in the fall of 2012 and last three years, the BRA announced.

Opponents of the project gathered at City Hall on Thursday to “occupy” the Mayor’s office and BRA meeting. In a press release announcing their plans, opponents said the project would benefit “the 1%” and not the average Boston resident.

“People in this neighborhood have worked for housing not just for poor people, not just for rich people, but housing for everyone,” the release stated. “Simon Properties intends to build…[an] elite residential tower with an enclosed ‘wintergarden’ that replaces and encroaches upon the expanse of public open space now at the corner of Dartmouth and Stuart Streets.”

Of the 318 residences on-site, 10 will be affordable. The developer has agreed to construct 38 additional affordable residences in the South End and Back Bay.

In an open letter to Mayor Menino, Governor Deval Patrick and the BRA, South End activist Mel King said approving the project was akin to allowing segregated housing to be built on public land.  

“I have spent a large part of my life dealing with segregation,” he wrote. “What is the most egregious and one of the most serious aspects of this proposal, is how many people turn a blind eye to the kind of impact that projects based on segregation like this will have on individuals.”

Steve Wintermeier January 12, 2012 at 04:28 PM
Where is the demand going to come from for these units - it's possible this project individually will be a success, although without much parking there are serious questions about that - but there are 1000 luxury downtown units already under construction (mostly rental) and 1700 scheduled to break ground in 2012 (including this). With annual downtown luxury demand in "normal" times running at maybe 240 units per year, that's a 10-15 year supply coming on the market over just a two year span. The Clarendon is selling/renting only a handful of units a month and now we are stretching the limits of zoning to build more units. If this project makes sense in the first place, it probably only makes sense at half the size at most.
Jodi January 12, 2012 at 05:55 PM
I don't understand how this is going to solve the housing problem, Alex - how much are these units going to sell/rent for? I would hazzard a guess that most of them will be in the $600/sq ft. range, or rent for more than $1500/month? At best, that's $600k for little over 1k sq ft.... and I don't know many people that could live in that small of a place while raising a family. I also don't know many people that can afford a bigger, more expensive place in the city, have kids, pay for parking,daycare,etc.... so it just pushes them out into the burbs. And what about parking?? Saying that this is a great solution to the housing problem is quiet naive if there isn't also a solution to the enevitable shortage of parking spots and stickers that will be needed.
Jodi January 12, 2012 at 06:05 PM
And if people want to live in the city so desperately, and there is such a shortage of housing... why are there so many units for sale/rent within a 3 block radius of Copley Square? Don't get me wrong - I'm all for development and progressive thinking, but at what point does it become too much or the wrong thing? Why not build a smaller structure, add some small business storefronts and a parking for the neighborhood? Do people ever NOT come to the city and shop, dine or stay at the hotels because they can't park? I know plenty of people that would rather drive to North Shore Mall. If the goal is push Boston to the next level and not have it become a "dying" city, then does it make sense to add more small businesses, create more jobs so that people can stimulate the economy and actually help it grow? Seems to me, that having another building full of empty apartments does more to add to the "dying" city aspect than doing nothing at all.
susan prindle January 12, 2012 at 06:21 PM
One of the more interesting comments that was made was that Simon wants to "upgrade" the stores at Copley Place. A laudable goal, surely, but how much more upscale can you go? Neiman Marcus wants to expand to a flagship store, but it doesnt want to close down in order to do the renovations - that is why they are pushing into the public realm.
Carolyn A. Gritter January 12, 2012 at 10:33 PM
Alex: I didn't attack Charlie. He thought a 40-story tower was insufficient for the site. I hoped he would respond with his thoughts on scale and density. Thank you so much for your compassionate concern for me, albeit insincerely and hostilely expressed.
Alex January 12, 2012 at 11:03 PM
Virtually every single person who studies the housing market in Boston attributes the insane prices to one thing: lack of supply, and inability to build new supply. That inability stems from a number of factors, including scarcity of land. But there is ONE factor that is controllable, and that is widespread, consistent opposition to the creation of new housing. This building will not in and of itself solve the housing crisis, but the opposition to it is indicative of the larger problem, that people unite in opposition to major development that will add supply. As for units for sale rent nearby, are you trying to say that there is not demand for housing in that neighborhood? Have you talked to anyone who knows anything about the demand there? It's at pre-recession levels. It's undeniable. As for building parking instead of housing, that's an idea that was popular in the '60s, and something we've been trying to correct since then.
Alex January 12, 2012 at 11:04 PM
As far as "another building full of empty apartments," here is a little primer on real estate development: when a developer wants to build something, he or she is risking a lot of his/her own money. As a result, he/she carefully studies the market to see if there is demand, based mostly on occupancy in comparable properties. Then he/she goes to the bank, which is also risking huge amounts of money, and also carefully studies the market. Do you think that your anecdotal evidence of apartments that no one wants to live in are more reliable than the great lengths that these institutions go to to protect their investments? It is true that these investments go wrong all the time, but that is because the market changes, not because it is a terrible market to begin with. You can argue that banks and developers frequently make bad decisions for the community, but if the market is as bad as you claim, that would mean they are recklessly throwing their money away, and that is something that they do not do, no matter how evil they are. I believe banks are evil, but not necessarily developers. As for the idea to build moderate-priced housing, let's do it! Making housing more affordable is my life's work, and I wish there were more money to do that. But there isn't. So the next best thing is to add these units, which, by nearly-incontrovertible laws of economics, will relieve the housing shortage and bring prices down.
Alex January 12, 2012 at 11:04 PM
I am sorry if my tone is grating, but the comments on this page are from people who are uninformed about how urban planning and real estate work. If I went onto a gardening, or animal husbandry, or something else that I know nothing about, blog and started spouting uninformed opinions based on my gut and nothing else, I'd expect a less-than-welcoming reaction, too.
Alex January 12, 2012 at 11:07 PM
Carolyn: You said "You don't seem to understand the concepts of scale and density." Is that a kind request for his thoughts, or a statement that you think he is uninformed and wrong? If I said "Carolyn, you don't understand what you're talking about" would that be an attack?
Carolyn A. Gritter January 12, 2012 at 11:40 PM
Alex: Surely you aren't saying that only persons with expertise on a subject should comment on that subject. Yes, your tone is grating. I might even say overbearing and elitist. Is the goal of your "less-than-welcoming reaction" to intimidate and/or discourage comment from the Average Joe? If your frustration at what you say are uniformed views frustrates you to the degree that you can't comment with civility and respect, perhaps, for your peace of mind, you shouldn't participate in the discussion.
Jodi January 13, 2012 at 01:15 PM
You don't have to be a developer to understand how real estate works. We looked for a home in Boston for nearly a year; we ALSO carefully studied the market, looked at past home sales, comps in the neighborhoods and demand in the area should we ever decide to sell. We ALSO risked a lot of our own money - ultimately deciding to take a "risk" in the city.
Alex January 13, 2012 at 02:05 PM
Jodi, why not just buy one of the myriad vacant apartments that exist all around Copley that you were telling us about? You know, the ones that exist because there is no demand for housing? I'm sure they could have been snatched up for a song. Right? I'm sure you're all very nice people, but this is clearly a waste of time for all of us. I wish you well. I feel like I'm dealing with a group of Tea Partiers, unconstrained by reality, only their uninformed feelings. I'll leave you with a quote from the late, great Daniel Patrick Moynihan: "Everyone is entitled to his own opinion, but not to his own facts."
Jodi January 13, 2012 at 02:16 PM
Alex - clearly you aren't reading my post correctly - I DID buy an apartment in the neighborhood. I never said there wasn't a demand for housing - but your logic of building a massive apartment complex with no parking doesn't solve the problem. I love how you automatically assume that I'm a Tea Partier because I dare to disagree with you or challenge your thoughts. Wow - what an insightful comment. Just out of curiosity, where do you live?
Alex January 13, 2012 at 02:50 PM
1. I know you bought an apartment, but I was saying I'd assume it was inexpensive because we have so much vacancy, and so little demand. Right? 2. I did not assume you were a Tea Partier. I said that the logic on this board is similar to the logic that is common in the Tea Party, namely that we should ignore facts just because we feel something is right or wrong. Ignore the facts showing strong housing demand because we feel like there isn't. Ignore the fact that apartments without parking will sell, because we feel like that can't be possible. I have no idea about your political leanings, I was just commenting on your approach to logic. 3. You caught me, I am sniping at you from some distant suburb. Just kidding! I live in the South End, about a quarter mile from the neighborhood-destroying monolith that will sit vacant and ruin our lives.
Steve Wintermeier January 13, 2012 at 03:32 PM
Alex thank you for your primer. Unfortunately I suggest you read the textbook and the data that support it. The annual incremental demand for housing units citywide over the past 10 years is 1200 units per year according to the US census bureau. Given that we are still absorbing some of the units that were overbuilt around 2007 and 2008, it may actually be a little bit less. Fortunately the financial crisis hit when it did or we would be looking at about a thousand empty luxury condominiums today in the city and the fallout from a plummeting luxury market would be catastrophic for the city. The reason taxes are low in places like JP, Rozzie and WR is because commercial and luxury residential pay the bulk of the taxes. If the values of those fall (like commercial did in the middle of the last decade), those taxes still have to be paid and you could easily see 50% tax increases in the outer neighborhoods. You think the foreclosure crisis is bad now? Tell these people on a few week's notice they have to come up with $2000-3000 extra to pay their taxes next year and see what happens.
Steve Wintermeier January 13, 2012 at 03:41 PM
As for demand, it is possible this project will be successful - although the two flies in the ointment are a) no parking and b) the engineering of this project is so complex it may never happen anyway. This city has a long track record of overdeveloping - condos in the 80's, offices in the 90's and luxury condos in the '00s. This looks like another verse of the same song. Here are the numbers - as noted 1200 units a year is the long term growth rate of the city - maybe a bit lower. Generously ascribe 20% of that to luxury demand and that's about 250 units a year - MAX. Assuming the three projects now selling (The Clarendon, Provnce Place and the W) sell out about the same time the projects in question are coming onlline and there will be solid demand in the early going. However, as noted there are 2700 units under construction or breaking ground this year just on large downtown projects - for the most part high end luxury. Please don't come out with "there is demand for this property". Please tell me how the annual rate of luxury absorption goes above 250 units - where do these peopel magically come from or how it does not create a tax crisis in the city if we glut the luxury housing market which will drive down the value of luxury housing which directly pushes tens or hundreds of millions of dollars in property taxes onto the other residents of the city. With such a large glut almost certainly coming - why do we need to push the envelope on zoning and massing?
Alex January 13, 2012 at 04:02 PM
Steve, You're clearly informed, thanks for the info. One question: How is the demand measured? Are you referring to actual units that are absorbed every year to get to that 1,200 number, or some other type of demographic trends? I only ask because demand is notoriously hard to predict, and I believe conflating demand and actual absorption would be a mistake. Here's why: If you build zero new housing and supply stands exactly unchanged for 10 years, and population therefore doesn't change (since there is nowhere to live) it would be easy to say "no one wanted to live here, because the population didn't grow." That, however, would not be a measure of demand, it would be a measure of supply. If I have it wrong, then I would love to see the census numbers, they sound interesting. I did a quick search for them and didn't find anything, and I was not aware that the census measured demand, per se. Since the city grew by about 28,000 people over the last decade, I can see how you would use that to get to a presumed demand number, but I think it would be a mistake. I guess then I'd wonder what we attribute prices to. Everything that I have read attributes it to extremely limited supply, and if that's not true it would throw a lot of research out the window. I am not saying that would be impossible, but it would be surprising.
Steve Wintermeier January 13, 2012 at 04:50 PM
Alex - these are the units we build each year - 12,000 over the past 10 years which appears to provide a "balance" of reasonable vacancies etc. Current economic clmate has led to a modest surplus of housing units for sale and a slight shortage of rental units - but by no means crisis levels. If it were simply supply and demand, the landlords should have been making money hand over fist - but of the landlords I know, they make a reasonable, but not excessive profit. That has changed slightly perhaps in the past year, but not dramatically. Then why are rents high? Cost. If you develop property, you massively overpay relative to what the current zoning will support, go to the city hat in hand and say I have to build X% bigger than zoning to make money and if you are willing to build, the city pulls out the stops to make it happen - the politicians get money from the developers (legally - no accusations) and they get votes and money from the unions. That's how the system works. Other costs drive this up as well, high contractor costs, difficulty/expense of building in congested areas, antiquated infrastructure, a tax system that disproportionately pushes taxes onto landlords and a host of other things. There is demand and some extra supply of middle income housing may alleviate that somewhat. However, the primary driver of high rents in the city is high underlying costs, primarily wildly speculative acquisition costs driven by a lack of rigid zoning policies.
Alex January 13, 2012 at 06:41 PM
Soft costs in Boston (as well as places like San Francisco and much of New York) are also extremely high. One of the primary drivers of these soft costs is the hurdles that one must jump through to get projects approved, including the carrying costs of a lengthy approval process and the inevitable court battles. Not to mention legal fees, architecture fees on infinite iterations of the plans, etc. Hard construction costs are also much higher here, but if you compare total development costs in Boston to most other places, the differences you outline do not nearly account for the difference. These soft costs are inflated by the development climate. They also play a role in preventing landlords from making money hand over fist. I am not advocating this, but would like to ask: if we became Houston and let people build whatever they want wherever they want, do you think housing costs would go down? As for your methodology for measuring "demand," well, you know how I (and any statistician or economist worth a damn) feel about the notion that "that's what we build, so it must be what the demand is." There are so many mitigating factors to that that it's not worth trying to list them.
Alex January 13, 2012 at 06:41 PM
By the way, I agree with you 100% on the problems with rigid zoning. I wish that we would zone parts of the city for higher density (there is virtually nowhere where zoning allows for heights more than 155 feet) so that we all had a little faith in what the rules were. It would do a great deal to protect historic neighborhoods while allowing for responsible growth.
Carolyn A. Gritter January 13, 2012 at 07:35 PM
Jodi: Thank you for your quote from Senator Moynihan. We would do well to keep it in mind during this discussion.
Carolyn A. Gritter January 13, 2012 at 08:02 PM
Steve: Thanks for pointing out the tax issue. I worked at the State House when the voters approved Prop 2 1/2. Mayor White quickly pushed through legislation to shift some of the tax burden to commercial property and new residential construction, which could increase the tax base without running afoul of the annual levy cap. With so much of the city's property tax-exempt, the city operates with a built-in handicap, and that's why it pleas for PILOT payments. I know quite a few longtime South End homeowners who, even with paid-off mortgages, were priced out of the city by property taxes. Keeping middle-income residents in the city and encouraging new ones to move into the neighborhoods will be an ongoing dilemma.
Eric January 14, 2012 at 12:59 PM
Very interesting discussion and a lot of good points here. I'm not an urban planner, I work in technology and live a few blocks away from Copley. I'm a city lover and wouldn't live anywhere else. I was in favor of this development when I heard about it and after reading all the posts here, I am still in favor. Alex makes a lot of good points that seem right on target to me, thanks for sharing your knowledge!
John Keith January 16, 2012 at 10:33 PM
Steve, in the interest of full disclosure, shouldn't you mention that your real (and previously-stated) concern is that all the additional building will satiate demand, therefore reducing the value of some people's condos, meaning they can't profit as much as they would otherwise if and when they sell?
Alex January 17, 2012 at 06:47 PM
Is that true, Steve? Bogus "statistics" AND less than full disclosure?
Steve Wintermeier January 24, 2012 at 06:55 PM
John/Alex My concern is not whether people can profit when they sell. My concern is that if we glut the market with high priced condos it will force down the values of the condos - yes that means some people won't profit if they sell. But the bigger issue is that if you drive down the value on these condos, the taxes that they pay don't go away with the reduced value. Those taxes must then be paid by the other residents of the city. So, as you know and for Alex' benefit if he doesn't - a condo that comes on the market assessed at $1 million would pay about $11,500 in taxes with the current rates and exemptions if owner occupied. Now let's say, all else being the same condo depreciates to $800,000 - the $2600 in taxes have to be paid by all the other residents in the city. Now multiply that by thousands of other units and you are talking about tens of millions in tax transfers - not because our values went up - but because everybody else's went down. It has nothing to do with profit and loss and everything to do with the ability of existing residents to pay their mortgage and taxes. Full disclosure - I have no intention of selling my condo in the next decade and also I live in a brownstone - a not fully independent, but still fairly distinct market from the towers. Bogus stats? Where?
Alex January 26, 2012 at 02:53 PM
Steve, Please see my comments above in which I point out that equating absorption with demand is totally bogus. There are companies all over this country that exist to try to measure demand for real estate through a host of complex factors, and they frequently get it wrong. If measuring demand is as simple as measuring the average rate of absorption for the previous decade (as you do above) then they are all wasting their time, and the real estate and urban planning communities could save millions by just calling you! Let's measure the demand for alcohol in restaurants in Arlington, which a decade ago was a dry town. Since no alcohol was being purchased there, by your logic, there was zero demand. But then they allowed the sale of alcohol, and people, shockingly, bought it. Was demand increased from zero to something overnight? Or was there always demand, but there was not adequate supply to meet it? Your "demand" calculation is bogus. This is almost not worth debating.
Alex January 26, 2012 at 02:54 PM
As for your property tax logic, let's take a closer look: If, as you say, the addition of 318 units actually reduced the value of EVERY condominium unit in the city by $200,000, then yes, we'd have a big problem. Do you have any reason to believe that would happen? Could you provide an analysis of what the addition of new units would actually do to average values, and how that would be offset by new tax-producing units? What about the fact that this building in particular will probably cost the City next to nothing? It's likely to add hardly any students to the public school system, will not require any new streets to be plowed, and is unlikely to become a crime hotspot requiring frequent police attention. Is it possible that, by tweaking your assumptions, this could be a net gain for the City? Maybe if your quantitative analysis methodology were a little more trustworthy you'd have a leg to stand on, but you're clearly willing to create "facts" where they don't exist in order to support your opinions.
Steve Wintermeier January 26, 2012 at 03:28 PM
So your solution is "build it and they will come?". We tried that with condo conversions in the 80's - the market collapsed. We tried that with offices in the 90's, the market collapsed. We tried that with luxury condos in the 2000's, the market collapsed (fortunately the financial crisis hit when it did or the thousands of units now breaking ground would have been worse than the Filene's hole and Columbus Center - there would be empty shells and skeletons all over the city). On the margin within a very narrow market segment, you are right, absorption does not equal demand. But likewise within that narrow market segment demand doesn't magically quadruple without some kind of massive external stimulus and I see no evidence of anything indicating that Boston can or will grow more than the 0.5%-1% like it has for the past several decades. If we are talking does Boston need 200 or 300 units of luxury housing a year, we could have a reasonable debate, but arguing that the historical demand of 250 is magically going to expand to d1000 is farcical. This project, due to location and relative lack of competition, may actually be successful, but that means the several others now under construction will fail and the point is - why build to the sky if there is no evidence of the excess demand that justifies the environmental tradeoffs?
Steve Wintermeier January 26, 2012 at 03:43 PM
It's not just this project. If we were building 318 units - we DO need that. However, we broke ground on 1000 downtown luxury tower units last year and we are scheduled to break ground on 1900 this year (including this project). I'm generally not opposed to this project and I think some height here is a reasonable development - however - we would then be talking about a project somewhere between the height of Tent City and the Westin. If we had an a shortage of housing and a need to start "cramming" - there might be a justification for the size of this structure. However, the only justification I have ever heard is that is how big it has to be to make money and if we are using the developer's profitability as the sole determinant of planning in the city we have a serious problem (and we do have that serious problem unless your name is Chiofaro). As for average values - who knows? However, if you build 3000 units in two years when the demand is closer to 500 - check out places like Las Vegas. They didn't even have a glut that big and prices have come down almost 50%, so I'd guess somewhere between 10% and 40% depending on how deep the developers' pockets are. This will settle eventually, but there will be a lot of pain and the way the tax system works, it's not all the developers' or even the neighborhood's pain - it gets spread through the whole city and the three-peat of history going back to the 80's is firmly on my side of the argument.

Boards

More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something