Is that a pun? (It’s Bob Vila.)
Haven’t had a chance to watch the whole video, but I like the history lesson. Want to pull that purple loosestrife in the shot by the Charles River boathouse.
Nope, just one of those “rare” Greg Reibman typos! Fixed.
Mike Striar
on September 18, 2012 at 6:31 pm
I was glad to see him comment on the supermarket built over the Pike in Newtonville, and note that it was one of the first air-rights developments in the country. What a shame that this amazing resource [air-rights] continues to go nearly uncultivated. Newton has the opportunity to add more than a billion dollars in real estate to our property tax rolls, but lacks the vision from City Hall to accomplish that.
nathan phillips
on September 19, 2012 at 3:23 pm
Mike, would you consider forming an air rights working group? There are probably many
curious people like myself who need a primer before we can make an informed opinion. Thanks.
Mike Striar
on September 19, 2012 at 5:22 pm
Nathan– I made air-rights development a key component of my 2005 mayoral campaign. As a non office holder/non candidate, I have insufficient standing to accomplish anything with a working group. To the best of my ability however, I would be glad to answer any specific questions you have about air-rights development.
I raise the point of air-rights development now and again, not necessarily attempting to stir debate, but rather to prompt action. I believe Mayor Warren should appoint an air-rights czar, and empower that person to begin the process of putting together a comprehensive plan to cultivate this resource.
nathan phillips
on September 20, 2012 at 9:07 am
Thanks, Mike. Would parking structures ever work economically if placed over freeways? Perhaps with overlying office/retail space? The benefit would be to contain traffic without complicated road infrastructure to move freeway traffic into and out of neighborhoods. Riverside is one example; Austin St is another. How tall must structures be to be economically feasible? Could greenspace be worked in?
Mike Striar
on September 20, 2012 at 11:55 am
Nathan– The added cost of building on air-rights rather than “dirt” [as undeveloped land is often referred to by commercial developers], is the construction of platforms. Structures are built on top of platforms. Platforms are generally more expensive than dirt, but still economically feasible. So the answer to your first question is yes, parking structures would work economically. In fact, they would have to be part of any comprehensive air-rights development. You can get a good sense of how this works by checking out the parking structure at the Gateway Center / Crowne Plaza hotel in Newton Corner, the only other building besides Shaw’s market that’s built on air-rights in Newton.
You mention office and retail space specifically. Both would be prime candidates for air-rights development. [The Gateway Center also includes office space now]. The Newton Corner area would be a perfect location for a shopping mall built over the Pike. It also helps to remember that commercial properties pay property taxes at a much higher rate than residential properties. So while it’s more than economically viable to build apartment buildings on air-rights, commercial properties are better for the tax rolls.
You asked how tall the buildings would have to be. The answer depends on the use. For example, a two story shopping mall would be just about the same height as the Mall at Chestnut Hill, and I believe [if the air-rights questions were resolved] could be built within existing zoning regulations. The economics change for office buildings, because each added floor helps offset the initial construction costs of the platform. In order to make office [or apartment] development on top of the Pike viable, Newton would have to modify it’s current height restrictions. In the past, I’ve proposed doing that by creating a new set of zoning regulations for air-rights development. The lack of those special regulations is one of the things that’s holding back the cultivation of our air-rights.
You also asked about greenspace, which by itself wouldn’t work economically, because it generates no revenue. However, a small amount of greenspace could be a requirement placed on a developer seeking to build on the air-rights. Of course this would raise the cost of development, so you’d have to give a developer more flexibility if you wanted a project to include greenspace. I happened to read an interesting article yesterday about rooftop greenspace, and it struck me that may be a very cool [and less expensive] way to include greenspace in air-rights development.
Yim Yames
on September 20, 2012 at 12:27 pm
I’m curious as to how building over the Turnpike in Newton would be economically feasible for the developer. Building over active road and rail is -extremely- expensive. The project in Fenway is moving along only because MassDOT agreed to pay for some of the decking in return for taking a percentage of the future tenant dollars. And that project, in addition to being massive, has a decent percentage that is not over the actual roadway and rail lines.
Columbus Center in the Back Bay ended up falling through because of financing in the end. The only way they could even get as far as they did was to build up. Way up. I think the tower was proposed for 30+ stories.
I just don’t see a project in Newton getting enough height or density for it to work.
Mike Striar
on September 20, 2012 at 2:03 pm
Yim– The last time I saw a cost estimate for platforms was 2005. That cost was $6M per platform acre. Using that figure, if a developer were to build a $200M building [the approximate cost of Newton North High School] on a 3 acre platform, it would raise their gross construction cost about 9%. To get the true cost however, you would subtract what that developer would have had to pay to purchase a comparable, ground based site. To the best of my knowledge, there are no suitable, undeveloped, commercial, ground based sites of that size along the Pike between Newton Corner and Newtonville. But if there were, my guistimate would be that such a site would sell for at least $5M-$6M. So the true cost of the platform would add approximately $12M, or 6% to the cost of a $200M building.
There are two things you need to remember, Yim. The law of supply and demand, and the old adage, “location-location-location.” Newton is a highly desirable place for development. In many respects more desirable than Boston. If a commercial developer thought Newton Corner would be a good location for a shopping mall, and there were no ground based sites on which to build it, they would not be dissuaded by the need to pay a 6% premium to build on air-rights.
You mentioned the project at Fenway, and raise two interesting points. First, it’s essentially being built as a public-private-partnership. MassDOT has no reason to subsidize private development. So when they looked at the number$ associated with that project, they recognized the profit potential. Second, you are correct that the financial dynamic of air-rights development is considerably improved when the overall project includes a large ground based area. Let’s take my earlier example of a 3 acre platform costing $6M per acre. If half of that project were ground based, a developer would only need to build a 1.5 acre platform to construct the same building. Saving them the difference in cost between the ground vs. an additional 1.5 acre platform.
You’ll be happy to know that there is such a site that would fit the bill perfectly. It’s located just east of the Gateway Center / Crowne Plaza hotel, where the City of Newton owns a piece of undeveloped land on the north side of the Pike that’s currently used as an informal athletic field. That site could be combined with an air-rights project to make a development more economically viable.
If I were the King of Newton, I’d be on the phone with the Boston Celtics [who currently rent the Garden from Delaware North], and I’d ask them to consider building a new arena there that would include a shopping mall and hotel. When you calculate the property tax, hotel tax, and an added per ticket surcharge, such a project would pave the way for Newton’s financial future. It would also offer the opportunity to finally fix the large rotary known as the “circle of death,” be a tremendous source of jobs, and put Newton in the national spotlight.
Mike Striar
on September 20, 2012 at 2:06 pm
Correction: The site I referred to that’s owned by the City is on the South side of the Pike, not north.
Is that a pun? (It’s Bob Vila.)
Haven’t had a chance to watch the whole video, but I like the history lesson. Want to pull that purple loosestrife in the shot by the Charles River boathouse.
Nope, just one of those “rare” Greg Reibman typos! Fixed.
I was glad to see him comment on the supermarket built over the Pike in Newtonville, and note that it was one of the first air-rights developments in the country. What a shame that this amazing resource [air-rights] continues to go nearly uncultivated. Newton has the opportunity to add more than a billion dollars in real estate to our property tax rolls, but lacks the vision from City Hall to accomplish that.
Mike, would you consider forming an air rights working group? There are probably many
curious people like myself who need a primer before we can make an informed opinion. Thanks.
Nathan– I made air-rights development a key component of my 2005 mayoral campaign. As a non office holder/non candidate, I have insufficient standing to accomplish anything with a working group. To the best of my ability however, I would be glad to answer any specific questions you have about air-rights development.
I raise the point of air-rights development now and again, not necessarily attempting to stir debate, but rather to prompt action. I believe Mayor Warren should appoint an air-rights czar, and empower that person to begin the process of putting together a comprehensive plan to cultivate this resource.
Thanks, Mike. Would parking structures ever work economically if placed over freeways? Perhaps with overlying office/retail space? The benefit would be to contain traffic without complicated road infrastructure to move freeway traffic into and out of neighborhoods. Riverside is one example; Austin St is another. How tall must structures be to be economically feasible? Could greenspace be worked in?
Nathan– The added cost of building on air-rights rather than “dirt” [as undeveloped land is often referred to by commercial developers], is the construction of platforms. Structures are built on top of platforms. Platforms are generally more expensive than dirt, but still economically feasible. So the answer to your first question is yes, parking structures would work economically. In fact, they would have to be part of any comprehensive air-rights development. You can get a good sense of how this works by checking out the parking structure at the Gateway Center / Crowne Plaza hotel in Newton Corner, the only other building besides Shaw’s market that’s built on air-rights in Newton.
You mention office and retail space specifically. Both would be prime candidates for air-rights development. [The Gateway Center also includes office space now]. The Newton Corner area would be a perfect location for a shopping mall built over the Pike. It also helps to remember that commercial properties pay property taxes at a much higher rate than residential properties. So while it’s more than economically viable to build apartment buildings on air-rights, commercial properties are better for the tax rolls.
You asked how tall the buildings would have to be. The answer depends on the use. For example, a two story shopping mall would be just about the same height as the Mall at Chestnut Hill, and I believe [if the air-rights questions were resolved] could be built within existing zoning regulations. The economics change for office buildings, because each added floor helps offset the initial construction costs of the platform. In order to make office [or apartment] development on top of the Pike viable, Newton would have to modify it’s current height restrictions. In the past, I’ve proposed doing that by creating a new set of zoning regulations for air-rights development. The lack of those special regulations is one of the things that’s holding back the cultivation of our air-rights.
You also asked about greenspace, which by itself wouldn’t work economically, because it generates no revenue. However, a small amount of greenspace could be a requirement placed on a developer seeking to build on the air-rights. Of course this would raise the cost of development, so you’d have to give a developer more flexibility if you wanted a project to include greenspace. I happened to read an interesting article yesterday about rooftop greenspace, and it struck me that may be a very cool [and less expensive] way to include greenspace in air-rights development.
I’m curious as to how building over the Turnpike in Newton would be economically feasible for the developer. Building over active road and rail is -extremely- expensive. The project in Fenway is moving along only because MassDOT agreed to pay for some of the decking in return for taking a percentage of the future tenant dollars. And that project, in addition to being massive, has a decent percentage that is not over the actual roadway and rail lines.
Columbus Center in the Back Bay ended up falling through because of financing in the end. The only way they could even get as far as they did was to build up. Way up. I think the tower was proposed for 30+ stories.
I just don’t see a project in Newton getting enough height or density for it to work.
Yim– The last time I saw a cost estimate for platforms was 2005. That cost was $6M per platform acre. Using that figure, if a developer were to build a $200M building [the approximate cost of Newton North High School] on a 3 acre platform, it would raise their gross construction cost about 9%. To get the true cost however, you would subtract what that developer would have had to pay to purchase a comparable, ground based site. To the best of my knowledge, there are no suitable, undeveloped, commercial, ground based sites of that size along the Pike between Newton Corner and Newtonville. But if there were, my guistimate would be that such a site would sell for at least $5M-$6M. So the true cost of the platform would add approximately $12M, or 6% to the cost of a $200M building.
There are two things you need to remember, Yim. The law of supply and demand, and the old adage, “location-location-location.” Newton is a highly desirable place for development. In many respects more desirable than Boston. If a commercial developer thought Newton Corner would be a good location for a shopping mall, and there were no ground based sites on which to build it, they would not be dissuaded by the need to pay a 6% premium to build on air-rights.
You mentioned the project at Fenway, and raise two interesting points. First, it’s essentially being built as a public-private-partnership. MassDOT has no reason to subsidize private development. So when they looked at the number$ associated with that project, they recognized the profit potential. Second, you are correct that the financial dynamic of air-rights development is considerably improved when the overall project includes a large ground based area. Let’s take my earlier example of a 3 acre platform costing $6M per acre. If half of that project were ground based, a developer would only need to build a 1.5 acre platform to construct the same building. Saving them the difference in cost between the ground vs. an additional 1.5 acre platform.
You’ll be happy to know that there is such a site that would fit the bill perfectly. It’s located just east of the Gateway Center / Crowne Plaza hotel, where the City of Newton owns a piece of undeveloped land on the north side of the Pike that’s currently used as an informal athletic field. That site could be combined with an air-rights project to make a development more economically viable.
If I were the King of Newton, I’d be on the phone with the Boston Celtics [who currently rent the Garden from Delaware North], and I’d ask them to consider building a new arena there that would include a shopping mall and hotel. When you calculate the property tax, hotel tax, and an added per ticket surcharge, such a project would pave the way for Newton’s financial future. It would also offer the opportunity to finally fix the large rotary known as the “circle of death,” be a tremendous source of jobs, and put Newton in the national spotlight.
Correction: The site I referred to that’s owned by the City is on the South side of the Pike, not north.