Greenway lowers its BID price
Greenway Conservancy began exploring BID creation more than an year ago
The Rose Kennedy Greenway Conservancy has entered the final stretch of its effort to launch a Business Improvement District to help fund its operations. The conservancy has made concessions to the Greenway district’s biggest landlords, and lowered the BID’s overall fundraising target. The fate of the proposed BID remains uncertain, though, thanks to the top-heavy nature of real estate values along the Greenway.
The Greenway Conservancy, the nonprofit that oversees the 13-acre Boston park system, started exploring the creation of a BID more than a year ago, when the state began scaling back its aid to the parks. State aid to the Greenway has dropped from $3 million in the 2010 budget cycle, to $2.2 million this year, to under $2 million for the current fiscal year. In response, conservancy officials sought voluntary contributions from commercial property owners along the Greenway, through a BID, to supplement the nonprofit’s budget.
The Greenway BID effort follows the recent creation of the Downtown Boston Business Improvement District. The Downtown BID, which runs in a triangle between South Station, Government Center, and the Common, raised $2.9 million from participating businesses.
The proposed Greenway BID, which would run along the parks, from Kneeland Street to the Bulfinch Triangle, initially set a fundraising goal of $2.7 million. That sum would have allowed the conservancy to boost its annual budget to $7.6 million, from $4.8 million in fiscal 2011.
After running into resistance from Greenway landlords, the conservancy lowered its ambitions. The BID’s current pro forma envisions a more modest $2 million annual contribution from property owners which, when combined with a lower annual contribution from the state and private fundraising, would put the conservancy’s annual budget in the $6 million range.
Conservancy officials are in the process of meeting with individual property owners along the Greenway, seeking final commitments for BID participation. Officials inside Boston City Hall are also expected to take an active role in soliciting property owners to participate in the BID. There are deep ties between the conservancy and City Hall, although the city of Boston has resisted putting money into the Greenway, which is owned by the state and sits atop a federal highway. The current director of the Boston Redevelopment Authority, Peter Meade, formerly chaired the conservancy’s board of directors, while the conservancy’s current chair, Georgia Murray, is the wife of former BRA director Mark Maloney.
The conservancy has tweaked its voluntary assessment formula, lowering the burden on all potential BID participants, but creating steeper discounts for the district’s biggest landlords. Property owners will be asked to contribute 90 cents per $1,000 of assessed value, up to $70 million of assessed value; 65 cents per $1,000 between $70 million and $140 million; and 30 cents for every $1,000 in value north of $140 million. Under the conservancy’s old BID formula, property owners were asked to kick in $1 for every $1,000 in assessed value up to $70 million, and 65 cents for every $1,000 thereafter.
The assessment revision represents an effort to win over the Greenway district’s larger landlords. Don Chiofaro’s International Place – the Greenway’s most valuable commercial property – would see its annual BID contribution drop from $475,000 to $275,000 under the new formula. Tishman Speyer’s proposed payment on 125 High St. would fall from $377,000 to $229,000.
Under the state BID statute, landlords representing 51 percent of the real estate value within a proposed BID must agree to join the effort; residential properties are commonly exempted.The new, lower assessments recognize that the support of the Greenway’s biggest property owners will be critical to the success or failure of the BID. Unlike the Downtown BID, property values along the Greenway are extremely top-heavy; the participation, or defection, of a few major property owners could result in huge swings in the BID’s overall budget.
Tishman and Equity are both run out of New York, and neither firm participates in the Downtown BID, where they both own buildings. Chiofaro, who is currently locked with the city in difficult redevelopment negotiations over his Harbor Garage project, has yet to publicly commit to joining the BID. Chiofaro, Tishman and Equity alone control 37 percent of the commercial real estate value along the Greenway. The conservancy’s $2 million BID target assumes an 80 percent participation rate.