In Boston, Mayor Builds a Legacy With Construction Cranes
Originally posted on The New York Times by Katharine Q. Seelye
BOSTON — No one seemed happier the other day than Mayor Thomas M. Menino as he joined in the ceremonial groundbreaking for a high‐rise tower at the site of the old Filene’s department store in downtown Boston.
Under blue skies, a brass band struck up a Sousa march, a forest worth of white confetti swirled down on the assembled crowd and the mayor, wearing a sharp new suit and tie, proclaimed the dawn of a new era.
“The start of construction celebrates the beginning of a new chapter in the history of this historic building and highlights the promising future that is in store for this neighborhood,” he said.
It is a scene that has been repeating itself with some frequency these days as Mr. Menino, the city’s longest‐serving mayor, prepares to leave office. During his 20‐year tenure, he has overseen the addition of 80 million square feet of development, increasing the city’s total square footage of office and residential space by 11 percent.
The projects range from the $1 billion Boston Convention and Exhibition Center, completed in 2004, to almost 12,000 college dormitory rooms. He has backed a new casino; he proposed spending $16 billion in private and public money to build 30,000 housing units by 2020; and developers are planning a new residential tower at the Christian Science Plaza that, at 691 feet, will become the tallest residential building in the Boston skyline.
“We call it the Menino effect,” said Peter Meade, director of the Boston Redevelopment Authority, which oversees all construction projects in the city.
As Mr. Menino’s time in City Hall runs out, the pace of development is accelerating, evidenced by the construction cranes puncturing the cityscape at virtually every turn. Last year, about $4 billion was invested in projects; this year, $5.1 billion is expected.
The vibrant local economy — fueled by growth in food service and computer‐related industries, with a strong underpinning in biotechnology, education and health care — is driving the building boom. Moody’s last year called Boston “the strongest commercial real estate market in the country since the 2008 recession.”
Those industries are growing along with the city’s population, which reached 636,000 in 2012 — not as high as its peak of 800,000 in 1950, but up more than 3 percent since 2010.
The building spree may be partly a function of Mr. Menino himself. “Three years ago, the mayor said, ‘I want to get stuff done,’ ” Mr. Meade recalled. “So this is the B.R.A. being committed to getting stuff done.”
Others have suggested that the mayor’s departure may be prompting some developers to speed up their plans because they expect the change in administrations to slow down the process, at least initially, as new people move into new jobs.
“You have the demand, and interest rates are still relatively low, but this is coupled with a fear of the unknown,” said Michael K. Vaughan, president of Nauset Strategies, a real estate consulting firm.
“Developers, property owners, builders have 20 years invested in this relationship,” he said. “There’s a sense of, Let’s get this stuff done because you don’t know what’s around the corner.”
Some of the candidates who are running to succeed Mr. Menino — the preliminary election, with 12 candidates, is Tuesday — want him to scale back, worrying that his $16 billion housing plan in particular could saddle the city with debt. Another concern is that the building boom is gentrifying some neighborhoods to the point where residents are being priced out.
“We’re committing to so many things, I worry we’ll be handcuffed,” Bill Walczak, one of the candidates, said at a recent debate.
Mr. Menino brushed off the criticism, saying he intended to finish his tenure on a strong note and would be rolling out even more initiatives in the coming weeks.
After two decades in office, Mr. Menino’s hold over every aspect of city life is complete and his power to make or break any construction project is legendary.
The Filene’s property is a case in point. A few years ago, it was being developed byVornado Realty Trust, based in New York, but construction had stalled because of the recession, leaving a crater in the middle of the city’s historic shopping district.
The company’s chief executive, Steven Roth, suggested that he might have deliberately allowed the site to become an eyesore to put pressure on the city for a tax break. This incensed the mayor, who gave no tax break. Vornado never resumed construction, and eventually Millennium Partners, another New York developer — but one with a good relationship with the mayor — took over the project.
On the eve of the groundbreaking this week, the Menino administration reversed itself and agreed to give $7.8 million in tax breaks to help Millennium Partners attract retail and office tenants to the $630 million development. At the groundbreaking, the mayor defended the tax credits, saying the project would generate $60 million in new property taxes and stimulate the downtown economy.
David Begelfer, chief executive of Naiop Massachusetts, a commercial real estate development association, said that market forces rather than a mayor drive a building boom. But he suggested nonetheless that Mr. Menino might have been thinking of his legacy when he proposed building the 30,000 new housing units.
And of the tax break for the Filene’s project, Mr. Begelfer laughed and said: “There is something to be said for having a relationship with the power that be.”