Is anyone home at Millennium Tower?
City records indicate few condo owners take residential exemption
WEALTHY PEOPLE FROM ALL OVER THE WORLD have bought condos at the ultra-luxury Millennium Tower in Downtown Crossing, but not many of them live there full time.
City of Boston assessing records indicate three of every four owners don’t consider their condos their principal residence, suggesting the 60-story building, which is nearly sold out, is rarely if ever fully occupied.
Many business people have purchased condos at Millennium Tower because they are in and out of Boston frequently. Michael Dell, the chief executive of Dell Technologies, falls in that category. He purchased a $10.9 million unit at Millennium Tower after his company acquired EMC Corp. in 2016. (The Wall Street Journal reported that he is now buying an even more expensive condo at the One Dalton ultra-luxury building under construction in the Back Bay.)
Billionaire investor John Grayken, who paid $35 million for an unfinished penthouse condo at Millennium Tower, couldn’t live there full-time if he wanted to. He renounced his US citizenship years ago and became a citizen of Ireland for tax reasons; he can’t live in the US for more than four months a year.
CommonWealth conducted an in-depth analysis of Millennium Tower early last year to see who was moving in and what impact the ultra-luxury building was having on Downtown Crossing and Boston as a whole. Details on residential exemptions, assessments, and tax bills did not become available until the end of 2017.
Under Boston tax rules, people who own and occupy their property as their principal residence as of January 1, 2017, are entitled to a residential exemption of $2,538 on their property taxes in fiscal 2018. At Millennium Tower, 403 of the 442 units were purchased prior to 2017, but only 93, or 23 percent, of the owners took advantage of the exemption. The rest, 77 percent, did not. (Units purchased in 2017 will become eligible for the exemption in 2019.)
Ron Rakow, the city’s assessor, said the residential exemption, particularly at an ultra-luxury building such as Millennium Tower, is not a reliable indicator of whether someone is living full-time at their residence. Some of the residents probably couldn’t be bothered applying for a $2,538 exemption. Grayken’s property tax bill is nearly $357,000, while Dell’s is nearly $108,000. Rakow said other owners have placed their units in blind trusts and limited liability companies that often preclude applying for an exemption.
“The residential exemption is an imperfect benchmark, especially on a property like this,” Rakow said. According to city records, the total assessed value of the 442 Millennium Tower condo units is $1.04 billion; the average assessment per unit is nearly $2.4 million.
Nevertheless, the residential exemption is a benchmark of sorts. The lack of interest in the residential exemption by Millennium Tower owners reinforces concerns raised by Tim Reardon of the Metropolitan Area Planning Council in the earlier CommonWealth article. Reardon said Census data indicate the number of housing units in Boston being held for seasonal or occasional use is rising.
“We’re building lots and lots of units, but more and more of them are sitting vacant. That’s a sign of foreign speculation,” he said.
Sheila Dillon, the city’s director of neighborhood services, said in the same article that she was not troubled by the construction of a handful of ultra-luxury towers in Boston. She said the new luxury housing is easing demand for housing elsewhere in the city and breathing new life into Boston. She said she hadn’t seen any reliable data on units sitting empty, but hoped that wasn’t happening because she wants the new owners to become part of the city’s fabric.
The city does benefit financially from the ultra-luxury towers. According to assessing records, the property tax bills going to owners at Millennium Tower will net the city $10.9 million in property taxes in fiscal 2018 and an additional $103,000 in Community Preservation Act charges.
The assessing records also indicate the tower is still not completely sold out. One unit is still owned by a limited liability company affiliated with the developer, Millennium Partners, and five or possibly six others are owned by limited liability companies affiliated with individual partners at the development company.“The retention of ownership rights, by the principals in the building, underscores MP Boston’s long-term commitment to Boston. We see great untapped potential in Boston and we are excited to continue investing in this great city,” said Richard Baumert, a partner at MP Boston, in a statement.
Millennium this week unveiled its latest plans for a $1 billion high-rise consisting of office space and condos at Winthrop Square.