Geoff Engler’s interview with The TAB’s Jim Morrison should give folks lots to talk about. Here’s an excerpt….
Engler said the neighborhood opposition chose not to believe hard data generated by studies conducted by the city and other professionals.
“For instance, on Court Street, the neighbors kept indicating a traffic problem,” Engler said. “We had a traffic engineer, we met with the city traffic engineer, the fire department, the police department and all indicated that there’s no problem.”
Why wouldn’t the reporter have obtained the other side of the story from folks on Court St?
I’m not an architect, nor a city planner, but from a layman’s perspective this Court St project is completely outsized for that street. I’m glad it’s running into opposition.
Didn’t I read somewhere that adding another investor would open this up to a second round of approvals? Does anyone know if that is so, and what is being done about that?
From Geoffrey Engler: “Because the cost of going through the process to obtain a comprehensive permit was so high, Engler said his firm is now looking for a financial partner in the project. Engler said the project itself would not change.”
From the brochure available from Jones Lang LaSalle (JLL):
“Jones Lang LaSalle has been exclusively retained to sell 75 & 83 Court Street”
Sorry, there is no mention of partnering here.
Oh, Geoffrey and Robert Engler constantly maintained that the target market was empty nesters. But golly gee, in the JLL brochure no mention of empty nesters. In fact, the Newton schools are listed very prominently. Curiouser and curiouser it gets when the developers speak
Nice brochure for a “shovel ready condo development” for sale. Sounds like a blatant lie from Engler.
Despite the fact this is a “friendly 40B,” Engler’s comments prove a point I’ve made numerous times on this blog. The key to stopping 40B projects that are out of character with the surrounding neighborhood, is to drive up the developer’s costs. It’s not rocket science, just a little mathematic$.
It certainly raises some questions, such as:
1) Can they do do that? Can one company get a 40B project approved, with all its special breaks, and then sell it to another company?
In their hearing before the ZBA on June 26, 2014,(http://yourlisten.com/NewtonVillagesAlliance/zoning-board-of-appeals-court-street-june-26-2014 at 16:00 minutes) , Bob Engler of SEB cites his long history in Newton. Their attorney Schlesinger cites the city’s ‘decades of experience with these petitioners’ at the October 2, 2014 hearing. Then whoops, it seems the ink is hardly dry on the ZBA’s official approval of the comprehensive permit on November 25, and the marketing email offering to sell the project goes out at 9:21am. (I’ve added the screen shots.)
2) Did SEB ever intend to do this project themselves, or was their function to be a front, or “beard” or whatever you want to call it, to get this very dense project in a congested area approved?
In the October 2 hearing http://yourlisten.com/NewtonVillagesAlliance/zoning-board-of-appeals-court-street-oct-2-2014 (which I’ve listened to all the way through!), their attorney notes at least twice (at 10:45 and 1:03:00), that the project they’re proposing is “uneconomic” by the definition of the Department of Housing and Community Development, but the applicant is ‘willing to take that risk.’
My most memorable take-home lesson from two years of B-school was in Roman Weil’s Managerial Accounting class: “Sunk Costs Are Sunk.” Meaning that sunk costs shouldn’t affect a decision about the future. So why, having gotten through the 40B approval process, would SEB now blame opposition by some residents, drawing the process out and making it more costly, for their decision to sell the project? That’s water under the bridge. At this point, it’s either a profitable project going forward, or it isn’t. And was it really a surprise that there would be opposition to a project of this density in an already congested street? And was the seven-month approval process unreasonably long? It seems pretty fast to me.
3) Did the ZBA get snookered?
SEB claimed any reduction in the number of units would render the project ‘even more’ uneconomic and refused to allow an independent review of the pro-forma financials to determine if that was really true. A majority of the ZBA bought it. Economic viability occupied a large part of the October 2 hearing. It’s all an education, but here are some of the relevant points in the audio:
57:50 – Question from commenter John Koot – why were five units viable on 23,000 sq ft on recent Goddard Street 40B application, but 52,000 sq ft on Court Street needs 36 units?
1:00:30 – Request by ZBA member Barbara Huggins for independent financial review
1:05:00 – ZBA chair Brooke Lipsett wants to close the hearing before getting a financial review; is persuaded by Huggins that hearing should be kept open, otherwise independent pro forma could not be admitted
1:07:00 – Attorney Schlesinger says unfair; they offered to do in June
1:09:00 – ZBA member Farina doesn’t recall the offer; wants independent unfeasibility study 1:11:55 – Huggins says she’s asked at every hearing for independent financial study and was told she can’t ask until the end
1:32:00 – Alexandra Ananth from Planning says she got a pro forma for 32 units but felt it was not detailed enough to give the ZBA
1:42:00 – Attorney Peter Harrington also remembers that when question of financial review was raised, ZBA chair Brooke Lipsett said it was not the time.
In the end, a motion to impose a condition of reducing the project to 26 units was defeated by a 3-2 vote. If it had passed, and SEB had wanted to argue that would make the project unfeasible, they would have been required to allow an independent financial review, but that did not happen.
Now, SEB is offering the project as a “Rare Residential Development Opportunity” in “one of the most sought after cities in Massachusetts” with a “Top Tier School System” and “No For-Sale Competition” (that is, other developments are rentals not condos). So which is it, a project so teetering on the edge of viability than there could be no reduction in units, or a great investment for someone else?
And 4) What if we had a newspaper in town with enough reporters to ask, and actually get answers, to questions like this?
Here are the screen shots again, since they seem to have disappeared:
https://plus.google.com/photos/115378169208001735533/albums/6089014327664887041?authkey=CLXO6rHU3cfRoQE
Thanks so much Julia for this critical information. Many people out here have seen this kind of corrupt political behavior for decades. Nothing has ever stopped it. Now Newton residents can truly see how politicians operate.
Brooke knows who she must answer to as chair of the board. She might consider re-evaluating her role as she does not serve the community well.
Also in their brochure, there is a short description of MA 40B, a list of developments in the pipeline and a statement saying Newton is approaching the required 10% affordable properties so soon development in Newton will be obsolete.
It conveys that Newton is contrary and expensive to develop unless the developer uses 40B, so grab this one because it is already approved and may be the last opportunity.
With the offering going out from SEB the same time it was approved, it seems Julia has a very valid point. It would seem, in order to break even, the “sunk costs” would be included in the purchase price, so how is this a profitable opportunity for another developer if not for SEB. And what of the many discussions that Engler was the best option because of his ties to Newton but it is now being marketed to virtually any developer anywhere? Will the development remain as approved?
Thank you Julia and the Newton Villages Alliance, ( “who ever you are ” ).
@Marti – Speaking of the 10%, see my post above on Rowe Street. If the city has already met the 1.5% Land Area Minimum standard, I suppose that makes Court Street an even more desirable investment opportunity!
Geoff Engler doesn’t have much of a relationship with the truth.
I recently asked him a question about his background and he couldn’t even give me a straight answer as to where he came from.
I’ve never met Geff Engler and I don’t have a position on this project but someone I respect and consider reliable tells me that in the 80’s and early 90’s, “the Engler’s were the ultimate in community minded, civically engaged, donators of time and energy kind of people. Dottie Engler was absolutely beloved at Cabot School – by parents, teachers, and students. In addition to being PTO president, she ran a Community Ed program called Gym Fun, a weekly event that was the highlight of many kids’ week for years…. For years, her son ran a day camp for kids in the area (for a minimal amount of money) that always had a waiting list. The kids just died to get into it.
“For my generation of N’villers,” my source continues, “the Englers, were people who did great things for the community.”
My only point here is it’s easy to vilify people when you disagree with them, harder to disagree respectfully.
I just want to add that after seeing the traffic engineers in this town commit some major recent screw-ups — even when backed by studies — I trust the neighbors’ word any day. The Centre Street/Beacon Street intersection debacle is still fresh in the minds of many folks who have to use the Parker Street corridor. The configuration changes caused daily 1-mile backups: the engineers, and the study that was conducted, both missed the problem because they were monitoring the wrong streets for congestion.
Greg Reibman writes “I don’t have a position on this project”
Wow, a development and Greg has no opinion? That’s like the fact that Ted Hess-Mahan has not opined about recent Court Street developments. Seeing that affordable housing is involved, one would think that both Greg and Ted would have an opinion to share. There must be a good reason that they are reticent to give us their insight on this sale of a 40B before it is even built.
@Bob: “One would think.” But one would be wrong.
I don’t have a position because because I haven’t invested the time to fully study this project thoroughly.
I realize that fully understanding all sides of an issue isn’t a criteria everyone chooses to adopt before taking a position, but it’s my personal preference.
Bob, because I am on the Massachusetts Housing Appeals Committee, I must recuse myself from any discussions or votes involving any 40B projects in Newton, both with respect to any local action taken as well as from any appeal that might come before the HAC. Indeed, I recently recused myself from voting on the Wells Avenue deed restriction in the Board of Aldermen and did not participate in any of the discussions. So, obviously, I cannot comment on any developments concerning Court Street.
The issue of transferability of 40B permits came up in the discussion of the Myrtle Village development last night. ZBA member Bill McLaughlin, who is an EVP at Avalon Bay so presumably knows the right answer, said transferring ownership of a permit is provided for in the law. If I understood correctly, the ZBA would have to be informed, but it’s considered a ‘minor change’ that would not trigger a full-blown re-hearing.
The language may be somewhere in the regulations here that I linked to in the Rowe Street thread: http://www.mass.gov/hed/economic/eohed/dhcd/legal/regs/760-cmr-56.html
but I haven’t had a chance to go on a scavenger hunt for them in that morass of verbiage. @Marti, if you can find it, I’ll treat you to ice cream at Cabot’s and we can take a walk on Court Street, to make up for your missing the Bloggers party!
From the link Julia provided:
(b) Transfer of Permits. Prior to substantial completion of a Project or a phase thereof, a Comprehensive Permit may be transferred to a person or entity other than the Applicant, upon written confirmation from the Subsidizing Agency that the transferee meets the requirements of 760 CMR 56.04(1)(a) and (b), and upon written notice to the Board and the Committee (in the case of a Project granted a Comprehensive Permit under 760 CMR 56.07). Transfer of a permit shall not, by itself, constitute a substantial change pursuant to 760 CMR 56.07(4). After substantial completion, a Comprehensive Permit shall be deemed to run with the land.
Ice cream sounds good.
Thank you Marti! Need to figure out an ice cream time. Email me at [email protected]?