$162 million from taxpayers still doesn’t guarantee completion
by Ned Flaherty
Patrick administration officials have secretly re-negotiated the Fenway Center air rights proposal, with no public comment, and no disclosure of the new design and finances.
Originally proposed as subsidy-free, the proposal now consumes taxpayer dollars totaling $162 million. Despite those subsidies, after taxpayers build a 1,290-car garage for the Red Sox, AFL-CIO, and New York Times (the project owners), there still is no guarantee that any of the promised stores, housing, or offices will ever materialize.
The original proposal was published, debated, and subject to public testimony throughout 2008. After that public process finished, the owners quietly re-proposed their project, seeking taxpayer dollars to pay their costs and profits. The new proposal — never published, never discussed, never publicly commented upon — was negotiated and approved behind closed doors at the new Massachusetts DoT (Department of Transportation).
Members of the Fenway Center Citizens Advisory Committee never saw the new proposal that DoT announced on 15 October 2009, but even if they had it wouldn’t matter, because most Committee seats are owned by the development teams, which dictate to the mayor whom he can appoint. No matter what’s proposed, every mayoral air rights Committee always votes for approval.
Since 1997, the only independent public body dedicated solely to reviewing air rights proposals has been the Metropolitan Highway System Advisory Board. But as part of statewide transportation reform, that Board was just discontinued, after its final meeting on 14 October 2009. Minutes before the Board dissolved, Turnpike Authority staff wrote to Board members that the Board couldn’t review Fenway Center because design and permitting discussions were “ongoing,” and the proposal was “in negotiation.” That was untrue. The discussions were already finished, and the finances were already re-negotiated. A press release was transmitted the next morning, after it was too late for the Board to act.
DoT omitted three unresolved but critical issues from its press release.
Firstly, although it says it charges fair market value for its land-based property, DoT has never committed to charge fair market value for its air-rights property, or to use independent, professional appraisals.
Secondly, there’s no evidence showing whether air rights development costs more, less, or the same as land-based development, but city, state, and federal officials are donating public cash anyway. The taxpayer-funded bailout is $162 million now, and there is no limit on how many more public dollars the owners can get.
Thirdly, the air above and next to I-90 suffers from high levels of particulate matter air pollution, which causes increases in birth defects, incurable illness (heart disease, lung disease, cancer), and early mortality. The state told the owners on 14 November 2008 to quantify the risks of building inside the toxic air zone and propose effective mitigation, but the environmental impact report required by law was never published. Construction inside toxic air zones hurts the workers who build there, it hurts the people who live and work there, it raises insurance premiums for everyone else, and it increases the cost of Medicare, Medicaid, and state-subsidized health care.
The DoT press release mentions “jobs” and “affordable housing” as benefits, but those are only seductive slogans that distract attention from more serious issues. Most of the jobs at this site are only temporary, and many will go to out-of-state construction workers who take city and state funds back home to other states. And most of the $162 million of taxpayer dollars go not into affordable housing, but into the owners’ profit pockets.
Governor Patrick has been cutting services, laying off employees, eliminating municipal funding, and reducing environmental protection all year long, so it’s reckless for him to now commit millions of taxpayer dollars to build a 1,290-car garage for the Red Sox. The DoT refuses to conduct an independent audit of all costs, revenues, profits, and subsidies using government accounting standards, so taxpayers are paying $162 million to build a garage for owners who don’t qualify for a government bail-out. There is no guarantee that proposed future phases for stores, housing, and offices will ever be built, and even if they are built, there is no limit on how much more taxpayers will have to pay.
Should the I-90 corridor be tunneled below and developed above? Yes, of course, but only after financial disclosure, public comments, and mitigation of the health hazards. State legislators can remedy the closed-door decisions DoT made last week, but only if voters insist.
Ned Flaherty is an urban planning activist focused on air rights development, and a co-founder of the Alliance of Boston Neighborhoods.
Governor Patrick has been cutting services, laying off employees, eliminating municipal funding, and reducing environmental protection all year long, so it’s reckless for him to now commit millions of taxpayer dollars to build a 1,290-car garage for the Red Sox. Thank you for your informative article illustrating that Boston real estate shenanigans at taxpayer's expense are not limited to Thomas Menino's Boston Redevelopment Authority. As you aptly point out, lame duck state Transportation chief James Aloisi and Deval Patrick's administration are complicit in the misuse of shrinking public revenue and expensive bonds to subsidize developer John Rosenthal and the owners of the Red Sox.The Fenway Center project should be put on the shelf until there is a rebound in tax revenue to the state and we are not cutting services and laying off state workers.
Posted by Anonymous | October 18, 2009, 4:32 pmhttp://www.bankerandtradesman.com/news135177.htmlPlease read this article. It is clear that the state is going to make a significant sum of money (estimate of 300 million dollars) off the 99 year lease and this is not a 'give away' of public funds as Ned suggests.
Posted by Anonymous | October 18, 2009, 4:52 pmNed Flaherty responds:Historical experience yields 4 important observations.? There’s no published comparison of this deal vs. what a non-subsidized, fair-market-value deal would produce, and thus no way to gauge who benefits, or by how much, or when.? The state has published no independent, professional, fair-market-value property appraisal, so these claims about “market rate” are unsubstantiated and meaningless.? No one has published evidence of the tunnel/deck construction cost, or the premium or savings compared to land-based development, so the necessity of rent subsidies remains unproven.? Aloisi complains that air rights deals are inherently difficult, but they needn’t be, if the state would just obtain competitive bids, from qualified developers, with full financial disclosure, government audits (of costs, revenues, profits, and subsidies), and performance bonds. The last 14 years ended in failure because none of those things were done, not because deals are difficult.
Posted by Anonymous | October 19, 2009, 1:14 amNed, you mention $162M in taxpayer subsidies but you never itemize them. What are they. You say the project has been "secretly" changed but you don't say how. I asked if an environmental impact report was ever filed (which you claim has not been done)and guess what? Both a draft environmental impact report was filed and distributed(and I note that you commented on it) and a final environmental impact report was published (and I notice that you were on the mailing list). Yet, you claim none was filed as required. I have read your claims on particulate matter. As a scientist, it is clear to me that your claims are simply fradulent. You make ultra fine particulate matter claims then cite a multitude of studies but you never cite to those studies. That's not science Ned, its classic snake-oil salesman rhetoric and frankly, the good scientists who have worked deligently to produce solid data don't deserve the misuse of their products for the purpose of massaging your inflated ego. I note that in reviewing your comments on Columbus Center and on the Fenway project, you simply whited out Columbus Center and inserted the Fenway Project in its place. Ned, is the UFP information the same on Fenway as on Columbus so that you can simply change the name at the top of your carefully researched assessment of impacts? I understand that Columbus Center was a much longer tunnel, attached to another long tunnel. Yet, by simply whiting out the name at the top of your comments, it seems that you have concluded that the impacts are exactly the same. And Ned, just for purposes of credibility, you promote yourself as being an "urban planner" could you give us a view of your educational background and experience that supports that description.
Posted by Anonymous | November 6, 2009, 1:02 amThis article conveniently leaves out the fact that a full service train station is a big part of this project. The currently Yawkey station has only one platform, thus allowing only some trains to make the stop.
Posted by Anonymous | November 7, 2009, 4:26 pmThe development offers several positives in addition to the expanded commuter rail station. Ned "conveniently" leaves out any positives. In Ned's world there are only burdens. I think that anyone who looks at this development from a smartgrowth, transit oriented, green, renewable energy, small carbon footprint perspective could certainly conclude that the benefits significantly outweigh the burdens. While Ned looks to the mud, the community and business groups in the Fenway appear to be looking toward the stars. They ALL supported it. I would respect Ned's opinions if they were founded on good research and reasonable and responsible concerns but they are not. He seems to be a classic "bomb thrower" who makes up his "data", "facts" and "science" to a one size fits all scenario. A starving ego can be an ugly master.
Posted by Anonymous | November 7, 2009, 11:38 pmNed Flaherty responds:Q. What are the subsidies?A. The subsidies are:$ 65 million state rent discount below fair market value 25 million state road and subway expansion 52 million city-sponsored tax-free federal bond loan 15 million city property tax break 6 million state income tax break==========================================================$163 millionQ. What are the secret changes?A. In addition to an array of public subsidies for a project that was proposed as subsidy-free, the proposal changed from a single proposal to 4 separate proposals, in which the lucrative parts get built first, and the other parts become optional phases that are not required to be built, and that can be canceled without penalty.Phase 1 (2010-2011): Yawkey Station upgradePhase 2 (2011-2013): Tunnel #1, Garage #1, Building #1, #4Phase 3 (2016-2018): Tunnel #2, Building 3Phase 4 (2016-2018): Tunnel #3, Garage #2, Building #2Q. Did the environmental impact report arrive after the column was published?A. Yes. When my column was published on 18 October, the Final Environmental Impact Report that was mandated one year ago had not been published or even announced. It was dated 15 October, but arrived after the column was published.Q. Are the public health risks the same at Fenway Center as at Columbus Center?A. The public health risks are very high along the Boston’s entire railway/roadway. Since Columbus Center’s Certificate was issued over 6 years ago, review of studies in Boston and 115 other cities have shown that some of the mortality rates are actually twice as high as previously thought (“Analysis Finds Elevated Risk From Soot Particles in the Air”, New York Times, 3 June 2009).Both owners would expose people who live or work in their projects to high doses of particulate matter (coarse, fine, and ultrafine). U.S. EPA Researcher Robert Devlin says about 150 epidemiological studies made the connection between PM2.5 particles and death. “Almost one million people a year die because of particulate matter exposure, according to the World Health Organization,” he adds. “I don’t think anyone disputes that fine particles are killing people. I don’t think anyone doubts ultrafine particles have effects.” (“Breathing less easily with ultrafine particles”, Environmental Science & Technology, 1 July 2009) Last November the state decided to require Fenway Center’s owner to quantify that risk and mitigate that harm.Q. What are the studies?A. Thousands of studies are available. Here are 4 of them.(1) Dominici, F. et. al. Air Pollution and Mortality: Estimating Regional and National Dose-Response Relationships. J Amer. Statist. Assoc. 2002; 97(457):100-111. The study demonstrates that PM10 concentrations were positively associated with total mortality in most of the 88 U.S. cities studied, with a 0.5% increment for a 10 µg/m3 increase in PM10. The linear relationship for PM10 is also true for PM2.5.(2) Franklin, M. et. al. Association between PM2.5 and all-cause and specific-cause mortality in 27 US communities. J Exp. Sci. Environ. Epidemiol. 2006;1-9. This study concludes that health effects resulting from PM2.5 exposure may still be seen even below the NAAQS.(3) Jerrett, M. et. al. Long-Term Ozone Exposure and Mortality. N Engl. J. Med. 2009; 360(11):1085-1095. The study concludes that increased concentrations of either PM2.5 or ozone were significantly associated with an increased risk of death from cardiopulmonary causes.(4) Laden, F. et. al. Reduction in fine particulate air pollution and mortality: extended follow-up of the Harvard Six Cities Study. Am. J Respir. Crit. Care Med. 2006;173:667-672. This study has exceptional evidence of the mortality benefits of reduced PM2.5 levels. The greater the drop in PM2.5 exposure, the larger are the extended survival benefits.
Posted by Anonymous | November 8, 2009, 12:20 amThanks Ned but not a bit of back up to any of your numbers or your science. You state "The subsidies are" $65 million state rent discount below fair market value – Give us the math. What is the fair market value and what is the rent discount? You had to get to the number somehow – so how? $25 million state road and subway expansion. I suspect that you are referring to the State stimulus package passed by the legislature a few years ago, is that correct? That was a $12M item to expand the Yawkey Station into a full service commuter rail station and $12.5M to extend Yawkey Way into the rail station for access and to align and extend Maitland/Overland Streets out to the BU Bridge and extend bike and pedestrian pathways on Beacon. These were funded to provide transit and easier connections to the Longwood Medical Center, the number one economic engine in the State. How is that a subsidy to the Fenway development? $52 Million city-sponsored tax-free federal bond loan. Maybe you could check on that – It would be a public vote and award, so I am sure that you fact checked befor you published on the 18th. Oh, wait, you must not have. $15M city property tax break. Again, would that not be a public vote or action. Did you fact check that one. Hmm., must not have. Finally a $6M state income tax break. Maybe you can direct us to that one. I mean, Ned, you can't possible be pulling these numbers out of the air, can you? Ned, with respect to your UFP's you did the same thing in your post that your did in your DEIR comments. You state the UFP's kill and then you cite studies. You don't even cite to the specifics in the studies that support your seriously unsubstantiated conclusions or how they relate to the specific site. You simply post your hypothesis and seek to prove it by listing a bunch of studies. Absolutely nothing you say on this matter has any credibility. Again, Ned, you submitted your "study" on Columbus Center which had a long enclosed tunnel attached to another long enclosed tunnel which I found in the Environmental Report. Then, you submitted the exact same "study" with Columber Center whited out and the Fenway Project name inserted in its place. Fenway is a much shorter tunnel, not enclosed and not attached to another tunnel and yet, your "study" asserts identical impacts. Your's is junk science, Ned, pure and simple.Finally – The "Secret changes". Yawkey Station is owned by the MBTA not the developer. It is being re-built first since the deck for the Fenway project can't be constructed until it is done. That is your first "Secret Change". Your next "secret change" is that the next phase will be the garage and 2 buildings and then you cite two additional phases. Building phases, Ned, are just that. I understand that the developer is proposing 2 phases, not 4, the first comprised of the parking garage and 2 apartment buildings and deck below and phase 2 is the remaining project. This seems like a prudent plan since the economics of the project would seem to improve if all of the project were not brought onto the market at once. I think its called absorbtion. But please explain your take that "the single proposal is now 4 seperate porposals and the lucrative parts get built first". Can you provide the financial analysis you went through to draw that conclusion? Or is it just more of the smoke and mirrors of which you are truly fond?Finally and again, you promote yourself as an "urban planner" can you give us the educational background and experience that supports that description?
Posted by Anonymous | November 9, 2009, 9:18 pmNed, where did you go?
Posted by Anonymous | November 24, 2009, 2:07 amHey Anonymous,
Not sure if you’re still out there, but I highly recommend you write for Fenway News. We’re trying to get all sides of the story, which is always difficult. Email [email protected] and tell us about yourself.
Posted by Jonathan Kim | June 24, 2010, 8:24 pm