You have the right to remain: Part 1, Immovable

August 25, 2014 | Atlantic City, Cities, Development, Donald Trump, Economics, ED4ED, Eminent domain, Fair market value, Homeownership, Housing, Land use, Markets, Urban renewal, Urbanization, US News, Vera Coking | No comments 209 views

Arnold Rothstein: A sound elimination is the basis of good health.

Boardwalk Empire

By: David A. Smith


Maybe print one of these for every home owner?

Vera Coking could have been Susette Kelo; in fact, she was Susette Kelo … but in 1998, she won her eminent domain taking case.


She won? Vera Coking in 1998, after winning


She lost? Susette Kelo in 2005, before losing

At the time nobody beyond the antagonists – and we have Donald Trump as the Eeeevil Developer, in fact as an Eeeeevil Casino Developer in a city known mainly for its sins – quite appreciated that Ms. Coking’s victory for property rights would be a defeat for Atlantic City, and for Ms. Coking herself. 


The first rule of politics

If journalists did not invent survivorship bias, they are its most dedicated proponents, if only because the living give better interviews than the departed, and a lucky winner (or unlucky loser) makes for good storytelling, and even if the storytelling has to invert logic, as reported in The New York Times (July 21, 2014):

A Homeowner’s Refusal to Cash Out in a Gambling Town Proves Costly

Cue up the Kenny Rogers lyrics: You’ve got to know when to fold ‘em.


Now might be a good time to fold

By Matt A. V. Chaban

Atlantic City — A stand of blossoming lilac trees and a fresh coat of white paint hardly hide the decrepitude of the three-story boardinghouse half a block from the boardwalk. Ripped screens cover the windows that have not been smashed or boarded up. In the kitchen, refrigerators stand open and empty in a row; dirty plates fill the sink. Some guest rooms look untouched, beds made, while bags of trash and piles of suitcases litter others. What appears to be a crack pipe sits on a dresser.

Not so long ago, this was the most coveted home in this city.

Coveted, as we will see, not for itself but for its land.

Sources used in this post

New York Times (October 4, 1994; blue font)

New York Times (August 11, 1996; violet font)

New York Times (March 22, 1998; green font)

New York Times (July 21, 1998; sky-blue font)

New York Times (July 26, 1998; red font)

Press of Atlantic City (August 28, 2011; brown font)

New York Times (July 21, 2014; black font)

Press of Atlantic City (July 31, 2014; orange font)

1. Start at the end

On the chessboard lies and hypocrisy do not survive long; the merciless fact, culmination in checkmate, contradicts the hypocrites. – Emanuel Lasker


In chess, if anybody claims he is better than I, I can checkmate him.

Law 7: Any damn fool can predict the past. – Larry Niven.


Law 1a: Never throw shit at an armed man

Though it is the future’s curse to be unknowable, it is the past’s curse to be unchangeable, and if we are to see the story of Vera Coking’s 127 South Columbia Place, we might as well start from the undeniable, with the property’s sale and likely demise.

On July 31, the property, at 127 South Columbia Place, will go up for auction. The reserve price, or the lowest the seller will accept, is $199,000, but brokers insist it will go for more.

[When this post ends – oh, so far in the future – readers will calibrate the veracity of the brokers’ claim. – Ed.]


In the distant future, brokers’ claims will be verifiable.

As recently as eight years ago [i.e. 2006 – Ed.], Donald Trump was willing to pay at least 10 times that amount so he could expand Trump Plaza Hotel and Casino.

Shortly afterwards, seven years ago, Trump’s casino company went bankrupt for the third time.

bZtrumpd01    Sapone

I’m opening this hotel in 2008 …but not with my money

Now, as Atlantic City teeters under the weight of all of its opulence, Ms. Coking and her family may have lost their shot at a big payout.


“Donald Trump, who now only owns a 10% stake in the casino, reacted to the news exactly how you’d expect. ‘I got out seven years ago; my timing was tremendous,’ the Donald told the AP over the weekend.”

The building still has some admirers, who make the short detour from the boardwalk to take their photo with the famous property.

Not admirers, gawkers.


Oh, don’t be a gawking horse’s ass: Richard Lithgow etching

“All the years we’ve been coming here, we never stopped by, but when I heard about the auction, I wanted to see it before it was gone,” said Luanne Albertson, who was visiting from Egg Harbor, N.J., with her daughter and granddaughter. “I thought it would be bigger.”


It’s all in the perspective, isn’t it?

2. The unsustainable city along the Atlantic

Some cities have no business being where they are, and by all natural laws of urbanization, Atlantic City has no business existing, and its history is that of economic infrastructure creating a city and service economy built on the most shifting of foundations – America’s appetites and varieties of sin.

Some cities exist because they were outposts or ports; some because they were forts; some because they bestride rivers; and a few because they were built solely as a lure to get people to use new technology – like the railroad.

The railroad, in fact, was the world’s second disruptive transportation technology (the ocean-going sailing ship was the first); and just as the Duke of Wellington feared, the railroad ‘encouraged common people to move about needlessly’ – but that created a problem: why would people spend money on ‘cheap day return’ tickets if they had nowhere to go?


And they will ruin the role of cavalry

Thus the railroad birthed Brighton (George IV’s playground), Blackpool, Palm Beach, Fire Island … and the Harvey Girls. 


Nineteenth century flight attendants: the Harvey Girls


To the moon, or to Florida?


Ride me to adventure?

Until the railroad arrived, Atlantic City was empty:


William Trost Richards, Seascape, Atlantic City, 1873

It was built purely as a seaside resort:

The city was incorporated in 1854, the same year in which the Camden and Atlantic Railroad train service began. Built on the edge of the bay, this served as the direct link of this remote parcel of land with Philadelphia, Pennsylvania. By 1874, almost 500,000 passengers a year were coming to Atlantic City by rail.

In conspicuous consumption reminiscent of Huxley’s Brave New World (centrifugal bumble-puppy, anyone?) once the destination was established as a railroad terminus, it needed hotels:


A railway straight to the hotel entrance, and then the Atlantic Ocean only two blocks away

After arriving in Atlantic City, a second train brought the visitors to the door of the resort’s first public lodging, the United States Hotel. The hotel was owned by the railroad. It was a sprawling, four-story structure built to house 2,000 guests. It opened while it was still under construction, with only one wing standing, and even that wasn’t completed. By year’s end, when it was fully constructed, the United States Hotel was not only the first hotel in Atlantic City but also the largest in the nation. Its rooms totaled more than 600, and its grounds covered some 14 acres.


The United States Hotel, Atlantic City, 1875

So Atlantic City, unlike many American cities, had hotels before it had housing – and thereby set its character for the next century and a quarter.

[Continued tomorrow in Part 2.]

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Month in Review: July, 2014: Part 2, Reality and theory

August 22, 2014 | Affordable Housing, Apartments, Boston, BRA, Chiofaro, Cities, Development, Month in review, New York City, Occupancy, Rent control, Rent Guidelines Board, Rent stabilization, Rental, US News | No comments 240 views

By: David A. Smith

[Continued from yesterday's Part 1.]


Doodling in 1312: merchants and their ships in Venice

A blog, as these examples show, is a commonplace book, a scratchpad for the restless innovator, so it wanders whither it will, but now and then I am brought back to the topic at hand, as in an email interview I gave to the folks at ViaTechnik, as chronicled in The guru’s daydreams: Part 1, Inventing the future, and Part 2, Reinventing the past:

With the invention of email and the surprising visibility of the AHI Web site, I receive to a stream of random email inquiries, many variations of “Help us, Obi-wan Kenobi, you’re our only hope,” and as I am more susceptible to flattery than is good for me or anyone, I always reply with something.


You’re my only hope

Hence, when out of nowhere I received an interview request, from James Carroll of ViaTechnik, whom I knew not from Adam, I accepted, additionally for the curiosity value of being challenged with questions I normally don’t consider, even though I write prolifically, both for Recap Advisors and for Tax Credit Advisor, in which latter publication my monthly column is entitled, The Guru is In. 


Financial structuring help, five cents

Other David Smith writing

State of the Market, a regular periodical from Recap Advisors

The Guru is In, monthly column for Tax Credit Advisor

The 2013 Guru columns

The 2012 Guru columns

The 2011 Guru columns

The results were posted on ViaTechnik’s blog (July 9, 2014), which opens with a nice provocative headline:

David A. Smith Tells VIATechnik Why the Elevator Is Due for a Comeback and Explains Why We’re Not Living in Futurist Pods Yet

I’m not sure the elevator ever went away, but we must allow headline writers their hooks.

VIATechnik wanted to pry open David’s lifetime, award-winning, treasure-trove of experience in housing to find out what’s next in building design and technology, and what might be hindering us from becoming more sustainable and economically viable when it comes to urban housing. With great insightfulness, David not only crunches numbers, examines urban building designs and considers impact and economic viability, he references everyone from Charlie Brown to the more obscure Samuel Pepys to science-fiction writer Robert A. Heinlein.  


The young will choose how they economically poison the old

Continuing the theoretical exploration, I commented on an interesting Economist article that in turn was analyzing a new popular-economics book on the features of mortgages in Optionality and anti-optionality: Part 1, reward later or reward now?, and Part 2, Loan + Insurance = Lower risk:

When Mrs. Guggenheim was borrowing, she receives the lump sum at the beginning, and she now has cash she did not have before – Buffett’s claim checks redeemable immediately for other people’s products and services.

Who has the optionality?  When Mrs. Guggenheim is saving, she has complete optionality: she chooses how much to save, how frequently to make deposits, when she will withdraw savings, and what she will do with the savings.  Mrs. Guggenheim need consult no banker, no financier about these decisions.  It is her money and she does what she will with it.

Optionality defined

Financially, ‘optionality’ means the ability to change strategy without suffering harm.  Optionality includes:

· Timing of actions.  Save now or save later?

· Choice of actions.  Buy stocks or bonds?

· Scale of actions.  Concentrate or diversity?


When in doubt, preserve your optionality

Once she borrows, however, Mrs. Guggenheim’s optionality is all gone.  The choices of all her tomorrows are condensed into a single big-bang point source today, and whatever whims or inspirations or bonanzas she might have pursued she must now pass by.  Worse, her positive optionality has been replaced with negative optionality: now she must make the payments, on penalty of losing her posted collateral. 

Without vocalizing it, all of us know the optionality chasm between saving and borrowing, and yet despite this, most of us borrow rather than save, because we devalue optionality and overvalue immediacy – and that, more than any other single cause, may be the real reason behind the Great Recession, if one is to believe a new book reviewed in the Economist (May 17, 2014):


House of Debt: How They (and You) caused the Great Recession, and How We Can Prevent It from Happening Again”, by A. Mian and A. Sufi.

Debt is the anti-insurance,” they assert.

The authors’ point is correct, but their description of it is wrong: debt isn’t anti-insurance, it’s anti-optionality.

When expressed as a series of payments, insurance looks just like savings: The saver (person who buys the policy) makes periodic regular payments, which accumulate value to the saver.  Only the payoff rules are different: where the saver is always entitled to the total earnings from his or her investments, the policy holder is entitled to a lower payment at the end (surrender value), but higher conditional payments if something bad happens. 


Has she got driver’s insurance?

So if we pair insurance (a series of payments with a conditional positive payout) with high-leverage borrowing (a series of payments with a conditional big negative payment if the loan goes into default), it’s evident that the resulting synthetic product reduces the borrower’s losses given a default, because the insurance payment mitigates the mortgage risks.  That’s why so many lenders require insurance of one form or another – life insurance, health insurance, hazard insurance – in the aggregated loan product or package.

Unlike the Lannisters, who always pay their debts, Argentina believes that debt obligations are merely advisory, and the country reacts petulantly when told by a judge that this is not so, as I profiled in International law’s Tinkerbell moment: Part 1, “What do you think?”, and Part 2, The ones who had hissed”:


The Lannisters would know what to do with Cristina Fernandez de Kirchner

Now the Argentinians object to being held to the standard that they crossed mighty oceans to submit to. As I wrote initially on this subject, in Epic CAC (November 13, 2012; brown font):

You thought you had rights – and then you find they’re worthless, because they’re government obligations and the government is currently in the hands thieves and scoundrels, so you’re out of luck, aren’t you? 

Having screwed a previous round of investors (and, as it thought, gotten away with it), the Argentinians are now back at the same doors, claiming to be reformed:

Argentina has tried hard in the past few months to show it is ready to make its peace with international capital markets. It has belatedly recognised several decisions by the International Centre for Settlement of Investment Disputes (ICSID), an arbitration body; it agreed a compensation deal with Repsol, after the Spanish firm’s stake in YPF, an oil firm, was expropriated in 2012; and just last month it reached a deal on its outstanding debts to the Paris Club, a group of official creditors.

Like your sneaky little brother who shouts ‘Ow! I give up!’ in roughhousing so that you’ll release him … to jump on you again, Argentina is betting that the capital markets will either be wilfully stupid or foolishly forgiving. 


That’s triple-B rated stupidity, all right

She was saying that she thought she could get well again if children believed in fairies.

Peter Pan, Chapter 13, Do you believe in fairies?

Accountability means that debts not paid are defaulted, and as we’ve seen in the context of municipal bankruptcy, default is sometimes the only option to bring discipline and economic feasibility to an overlevered enterprises.


The heck with that, it’s time to invade the Falklands

This among others is why the creditors, led by NML, have to be able to investigate all of Argentina’s global assets.  The country famous for sheltering dictators (including selling blank passports) and declaring bankruptcy when convenient now cries poverty, but won’t let anybody test it.


As you can see, I’m wholly destitute

And the standoff continues, with Argentina making nonsensical statements and global investment bankers hoping against hope that the holdouts will just roll so that they can keep making trades without having to take sides between what’s right and what’s profitable in the short term.


No joke: I can actually remember doing this at the age of seven or eight

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Month in Review: July, 2014: Part 1, Cities and housing

August 21, 2014 | Affordable Housing, Apartments, Boston, BRA, Cities, Development, Month in review, New York City, Occupancy, Rent control, Rent Guidelines Board, Rent stabilization, Rental, US News | No comments 117 views

By: David A. Smith

Housing, I have said over and over, is what makes cities, and the converse is true.  Among land use, zoning, taxation, economic development, and urban renewal, a city can help its housing markets thrive or wither – or, as in New York City, it can put them in an extended chokehold, then wonder why no one wants to develop more housing in the city and why the city always has a housing shortage, as I profiled at length in Groundhog day at the Rent Guidelines Board: Part 1, “A historic low”:


Why does this always happen to me?

Those these factors are intriguing, and can be quantified (and the Rent Guidelines Board commissions annual research on these topics, for instance income and expenses, housing supply), in fact they guarantee food fights, because:

1. There is no stated goal.  What is the purpose of collecting information?  What is the Rent Guidelines Board’s goal?  Is the RGB trying to approximate market rents, to have Net Operating Income (NOI) rise with inflation, to enable owners to maintain and upgrade their properties to market quality (most don’t, because they cannot afford to), to promote new affordable housing (as if anyone would be foolish enough to develop new Rent Stabilized housing).


You are a snob and a half!

2. Insofar as goals are implicit, they are contradictory.  The first set of data seems to want the ‘residential real estate industry’ to be healthy; the second seems to want residents to have affordable cost of living.

RGB chair Rachel Godsil [said] the RGB’s job was to prevent “unjust, unreasonable, and oppressive rents.”  

‘Oppressive’ is a value judgment that betrays its speaker’s prejudices.


Godsil believes that your biases are implicit, and she can find them for you

Naturally, any contentious political process repeated annually between the same combatants eventually devolves into street theater and show trials, as we covered in Part 2, “These horror stories”, Part 3, “Scores of screaming tenants”, Part 4, “Off the wall, off the wall”, Part 5, “No airborne chairs”, Part 6, “A different situation by law”, Part 7, “Some of it dirty”, and Part 8, “How the duck did this happen?” :

See you next year


The moment before Mr. Flax voted (go to 51:00 in the YouTube video)

After all the sturm und drang, after the absence of airborne chairs, the presence of earplugs and stage-storming tenants, of off-the-wall mayoral reactions, the Rent Guidelines Board voted 5-4 for the 1% rent increase, with Mr. Flax casting the decisive vote:

“This moment is a nightmare.  Unlike anyone else on this board, I’ve had intense, intense pressure from both the right and from the left.  Some of it dirty, some of it principled.”

He added (you can hear it on the YouTube at 52:15), “But again, I have to vote my conscience.  This is my proposal.  I apologize, but I vote in favor of the motion.”

After he voted “yes,” the crowd erupted in a chorus boos and shouts of “sellout.” Mr. Flax could be heard on the microphone asking one of his colleagues [Chair Godsil], “How the [expletive] did this happen?”

Whatever it was, you get to do it all over again next year – and New York’s courts still think this is Constitutional.


Rent guidelines Board hearing, NYC, 1943 – back then, there was a war on

Showing that New York City has no monopoly on questionable municipal housing practices – though as a Bostonian I can only stand in awe of Gotham’s ability to stick the city’s finger into every eye but its own  – I explored the surprisingly principled start to Mayor Marty Walsh’s administration in The making of the political atomic bomb:

It sounds as if the auditors did a classical procedures and box-ticking review (goodness knows what they charged, or what level of seniority they assigned to staff the assignment. 

(For that matter, did anyone at KPMG read my eight-part post on the BRA’s rottenness?  For reference, Part 1, Part 2, Part 3, Part 4Part 5, Part 6, Part 7, Part 8.)


Eleven footprints to Satan

“I want them to tell me what are some of the problems.”

To do the job Mayor Walsh wanted, KPMG would have to dig into:

1. Purposes.  What goals the BRA should be pursuing – growth, economic development, affordable housing, transit-oriented development – how they convert into measurable objectives, and how the authority trades off among competing objectives. 

“I didn’t think it was a deep enough dive. I asked them to go back and do a deeper dive. They kind of came back with, you know, ‘economic development could be beefed up,’” Walsh told the Herald last Wednesday.

Boston Mayor Walsh’s administration is likewise noteworthy for the rediscovery of Boston’s own Man in the Iron Mask, Don Chiofaro, who is still trying to develop the Harbor Garage After release from Coventry: Part 1, Not worthy the cognizance, and Part 2, On a proper submission:


Mayor Menino put him in Coventry and threw away the key

Aside from the spectacle of a public official allowing personal pique to rule his decisions [Like that never happens anywhere else in America? – Ed.], Mayor Menino’s fixation with ‘retail’ development politics – every decision being made by him – slowed down city development.  That gave candidate Walsh an opening: city development and redevelopment was part of his shake-em-up campaign persona to propose relocating City Hall and redeveloping the entire Government Center parcel (a great idea, by the way), a political Miley that helped him win election.

The Walsh administration is striking a different tone, saying it would consider building proposals that exceed the area’s recommended height limit if they provide the open space and waterfront access required by law.

The mayor realizes that policy will be changed partly by the reform of institutions like the Boston Redevelopment Authority (for reference, see my eight-part opus, Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8), and partly by the advancement of individual development proposals and the treatment of prospective developers – and who better to signal a new perspective than pugnacious Don Chiofaro?


I’ll punch the man who says I’m pugnacious


For Mr. Chiofaro, every square foot of ground floor area he surrenders is an economic loss, but if in the process he gains (say) three square feet like height allowance, then he wins.  As we saw before, to a developer, every architectural or visual feature is negotiable if it gets more verticality.  Mr. Chiofaro has learned his public-relations lessons well, for he now speaks the language of new urbanism:

“We will continue working from the ground up and describe how we think re-imagining a site with zero open space today can ultimately provide so many of the benefits contemplated” in the municipal harbor planning process, Chiofaro said.

Ironically, though I think Mr. Chiofaro is singing from a libretto, I also believe he means it; he’s an aggressive visionary for the technological city, and as a lifelong Bostonian he can appreciate how people come to love a city through their personal experience of its quirks whether cultural or historical.  All he is doing, I believe, is vocalizing what he thinks is so self-evident it needn’t be mentioned. 


Any idiot should know that

We inhabit housing every day, we invest it with our private lives, our sleeping and dreaming hours, our childhood memories and our parental hopes for the hopes, and hence with our souls – and because of this, our connection to housing and place becomes so powerful that if we inhabit it, we believe it belongs to us.  That spiritual connection was visible in my two-part update on the faithful vigilantes of Scituate, who believe in Occupancy if not ownership: Part 1, Parting from friends is a sadness, and Part 2, A place is only a place:

Emotionally if not legally, possession is nine-tenths of the law, and in real estate, occupancy is nine-tenths of possession, emotionally if not legally or contractually. Ownership is a legal condition and it is also a state of mind: the longer we are able to occupy a place, regularly even if not continuously, the more we emotionally own it, all legal facts to the contrary notwithstanding. Thus, when our deeply held emotional faith is confronted with contrary reality, faith is shattered, as reported in the Boston Globe (June 22, 2014; blue font) and the Boston Herald (June 22, 2014):

Protest group loses bid to keep church in Scituate open

While this story is about deconsecrated churches, the emotional psychology of occupancy can apply equally well to long-term renters losing their lease, or mobile home owners whose park is closing or whose space rent is raised beyond their ability to pay. 

1. Occupancy encourages us to feel we own property even when we don’t


Note the Thou shalt not steal sign, as if the parishioners own the church

Most of the closed churches went quietly. But about a dozen either filed civil suits or appealed to the Vatican court system, and a handful began around-the-clock vigils in their church buildings, ensuring that the archdiocese would have to forcibly remove them to carry out the closures.

The psychology of this recalls Susette Kelo of New London and her little pink house, who caught the public’s attention out of her emotional ownership. Not that the public knew or cared much about eminent domain for economic development (ED4ED) in the abstract, but rather because she seemed owner of the neighborhood, not just of her house, and her defense of occupancy resonated with Americans’ belief in the right of individual property ownership.

Rogers said lawyers for the parishioners notified him Saturday that their last-gasp attempt had been denied by the Apostolic Signatura, the Vatican’s highest court.

Rogers’s group, The Friends of St. Frances Xavier Cabrini, had appealed a Vatican ruling allowing deconsecration of the church building, a step that would allow the archdiocese to repurpose, lease, or sell the building.

Ms. Kelo had legal freehold title ownership on her side, and was defending her right to hold out in the face of a community need – and the parishioners don’t own the church or its land. What they do have and have had for nearly ten years, is physical occupancy – adverse possession, as it is called in real estate law. By contrast, in East Boston it acted in the more traditional, non-judicial manner of an owner.


Walk like an Egyptian

Evict like an owner

Read like a blogger

Come back tomorrer

[Continued tomorrow in Part 2.]

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That’s rich, Harbor Towers: Part 10, “Coming from the likes of you”

August 20, 2014 | Apartments, Architecture, Boston, BRA, Chiofaro, Cities, Condominiums, Development, Downzoning, FHA Lending, Harbor Towers, History, I. M. Pei, Rental, Urban renewal, Waterfront, Zoning | No comments 110 views

By: David A. Smith

[Continued from yesterday's Part 9 and the preceding Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, and Part 8.]

Principal sources used in this post

Chicago Tribune (February 7, 1993; olive-green font)

Boston Globe (March 14, 2004; lavender font)

Boston Globe (November 1, 2007; red font)

Boston Globe (November 20, 2007; emeraldfont)

Boston Magazine (February, 2008; blue font)

Apartment listing review (July, 2010; bronze font)

Boston Business Journal (July 2, 2014; brown font)

The Boston Globe (July 23, 2014; black font)


Isn’t he done yet?

Hard though it may be to believe, we have arrived at the end of our exhaustive [Exhausting? – Ed.  Hey, you try writing it. – Auth.] post on Harbor Towers’ history, though it would not be Harbor Towers if the story had an ending, much less a happy ending. 


It lacked certain elements that we need to market a film successfully. Suspense, laughter, violence.

Hope, heart, nudity, sex.

Happy endings. Mainly happy endings.

There are residents who support the proposal — that eyesore of a garage must go!  Then there is everyone else, armed with concerns about the project but also conscious of being cast as NIMBYs.  

Many of them, I dare say, are in fact NIMBYs, they just don’t want to be unmasked as such.


Got to keep my identity secret

Quite a few units will have their views blocked, and a massive new neighbor — 1.3 million square feet of offices, condos, retail, and restaurants — also will bring new congestion and noise.

It will also bring walkable access to downtown, plus restaurants, stores, and a new-urbanist dynamic that Harbor Towers has never had:

Missing from the ‘hood is a grocery store, CVS, restaurants, any place to hang out on a weekend night. You will have to go outside the general vicinity to find any decent restaurants or entertainment. I think they are trying to change that with the development of the “greenway district” but it’s slow-moving. Young singles in Boston should prepare to feel isolated and bored — or constantly be going back and forth to other parts of the city.

None of this influences the vocals:

The worriers don’t talk about the height of Chiofaro’s plan, but its density. Traffic, they say, is bad enough on Atlantic Avenue.

“It’s going to be worse than Fifth Avenue,” said Marcelle Willock, chair of a Harbor Towers condo board.

Our now-departed renter psychoanalyzes those who are the self-selected left-behind in Harbor Towers:


Why two towers, anyway?

You will find lots of die-hard Harbor Tower folks here, most of them retired and have lived here for years. They all paid that $80,000 assessment to fund the rehab project, so they are married to the building.

The die-hards are indeed digging in:

Willock and other residents crave many more details before deciding whether the proposal is a plus for the neighborhood.

“Development is a good thing. It’s good for the city,” said Dwayne Bertrand, an investment executive who last year moved into a 28th floor unit. [VP Hjead of North America Workout and Recovery] But, he added, “Can it be done to the magnitude being shown here?”

But does anyone speak for Harbor Towers?  Or is it just cacophony?

Other residents of Harbor Towers who attended the meeting Wednesday voiced their approval of the proposed new towers.

All that external-relations campaigning Mr. Chiofaro did had some payoff at least.

Whither Chiofaro?

The anonymous renter said it well:

We are sitting on prime real estate, and the residents at Harbor Towers are paying through the nose to keep the place afloat. Why not just replace it with some beautiful glass condos (like the Intercontinental down the street)?  

A condo association will never order its own death; for a change of the type our renter imagines, the property would need to be sold, in bulk, to … a dreaded developer.  That’s not happening for several decades anyhow.

With all the money being spent to keep these buildings alive, they could have built an entire city of modern, clean condos that don’t have any mechanical problems like the Harbor Towers.

That’s the curse of exoskeletal strictures – and it’s a reason to welcome new, better development:

Chiofaro said the arcade represents a dramatic improvement from the total lack of public space on the Harbor Garage site currently. He noted that it would allow for year-round festivals and public events, and open new views of the water from the greenway.

All of that is true, as Rowes Wharf proved.


Joseph Staska, Rowes Wharf archway, 2000

“The project we have been discussing for the last two months looks like nothing else on the Boston skyline and nothing else at the ground level,” Chiofaro said. “In its uniqueness, it shares a common bond with a distinguished collection of Boston architecture and engineering.”

Epitaph for the living Towers


Money is better than poverty, if only for financial reasons

If 90% of life is just showing up, then ninety percent of becoming an architectural icon is longevity: “Politicians, ugly buildings, and whores, all get respectable if they last long enough.”


“‘Course I’m respectable.  I’m old.”

Todd Lee, the architect on the 32nd floor, has lived in the building three separate times: once after his first wife took ill, once after she died and he wanted to “live like a monk,” and again after he married Karen C.C. Dalton, a charming art historian from Texas now teaching at Harvard. “I don’t know of any building in the city that has affection like this,” he says. “People who live here understand what an anomaly it is, and how extraordinarily lucky they are.”

Eventually those who associate with a building come to view it with affection.


Yes, he’s ugly, but he’s mine

It’s clear that people who live in the towers, particularly those who have been there for a long time, feel a profound, idiosyncratic connection to them. They point to the appealing rarity of the modernist residential buildings, the likes of which can never be built again;

Thank goodness.

the erstwhile barren location; the close-knit, if often querulous, community; the astounding views; and the absence of traditional yuppifying condo perks like valet parking, in-house chefs, a health club, or even washers and dryers in the units (by design, these are limited to the basement).

Sounds like a lovely pied-a-terre – for the old.

All of this lends to the experience of residing in the towers a glint of austerity.  The people who live here really are pioneers,” says Maryann Hoskins.

Maybe thirty years ago; not today.

“They suffered through the Big Dig, and all of that digging and noise, and they stayed here because they loved it.”

Or they stayed because it was easier than moving; people do that.

Beth Dickerson, a realtor with Gibson Sotheby’s who deals in the luxury market, says flatly, “What it comes down to is: This is what it is to live in these buildings.”


Ms. Dickerson and her pioneering luxury couch

“In a sense, Harbor Towers is kind of an island,” says Peter Forbes. “They fight everybody on the outside, and when there isn’t anybody on the outside, they fight each other on the inside.”


The trustees send their regards

“There have been coups left and right when one group gains ascendancy over another. But their victories seem to be short-lived, and then somebody else comes in and dethrones them.”


I’m king now, and I shall be king for a long time – yes?

Is there nothing more to Harbor Towers’ opposition than that – envy at potential supersession?

Chiofaro closed his presentation with a series of images of other major structures in the city — his International Place buildings, the John Hancock Tower, the Custom House Tower and Prudential Center.


The new John Hancock Tower, going up in 1971

(It had window troubles, too)


The Custom House, 1949: for thirty years the tallest building in Boston

Decaying and decrepit pre-Harbor Towers India Wharf at upper right


Aerial view of Boston looking east, circa 1955


The Prudential Center, shortly after completion in 1965

All of them, he said, were seen as unusually tall at the time they were built –

In this Mr. Chiofaro is unquestionably righkt.

– and have since become signature elements of a thriving city.

So too was Harbor Towers ‘unusually tall’ – and while height itself is no sin, Harbor Towers sinned in so many ways:

Ahistorical.  Though located on one of the oldest locations in Boston, Harbor Towers vaporized that history,  I find myself echoing the Holy Roman Emperor Carlos V, who upon visiting the Great Mosque of Cordoba, into which the Spanish had built a baroque cathedral, said:


Emperor, conqueror, preservationist: Carlos V of Spain

“What you have made here can be found in many places, butwhat you have destroyed is to be found nowhere else in the world.”


In the midst of this …


The Spaniards retrofitted a cathedral

Monolithic.  On that site, they built two towers so tall, gray, and obstructive that the angered city subsequently down-zoned the entire area so that nothing else could ever be unilaterally built that way again.

Free-riding.  Having had nothing to do with the harbor cleanup, they then benefited against when the Federal government decided to fund over ten billion dollars’ worth of the cost of eradicating the Central Artery and building in its stead the Greenway park, a huge windfall to every Harbor Towers condo owner.

Substandard.  They inhabit a building with balky elevators, no washers or dryers in the apartments, historically leaky (epically leaky) windows, and a squabbling anti-everything owners’ association that split into factions when confronted with a major upgrading cost.

But those views – oh, those views!


U. S. S. Constitution, heading back to her berth, viewed from Harbor Towers

“It’s not often the city finds itself with the opportunity for a transformative moment,” Chirfaro said. “But that moment is now before us.”

I close this odyssey where I began it, with that trustees’ letter quote:

“We believe the proposed development is historically and contemporaneously inappropriate in scale, height and density for a location adjacent to two Boston treasures, the Rose Kennedy Greenway and the harbor,” wrote two trustees of Harbor Towers

That’s why I so instantly thought, that’s rich, coming from the likes of you. 

We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.

– T. S. Eliot, The Waste Land, Little Gidding


Now, about those high condo association fees …

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That’s rich, Harbor Towers: Part 9, The new neighbor, “A two-star hotel always under construction”

August 19, 2014 | Apartments, Architecture, Boston, BRA, Chiofaro, Cities, Condominiums, Development, Downzoning, FHA Lending, Harbor Towers, History, I. M. Pei, Rental, Urban renewal, Waterfront, Zoning | No comments 115 views

By: David A. Smith

[Continued from yesterday's Part 8 and the preceding Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, and Part 7.]

Principal sources used in this post

Chicago Tribune (February 7, 1993; olive-green font)

Boston Globe (March 14, 2004; lavender font)

Boston Globe (November 1, 2007; red font)

Boston Globe (November 20, 2007; emeraldfont)

Boston Magazine (February, 2008; blue font)

Apartment listing review (July, 2010; bronze font)

Boston Business Journal (July 2, 2014; brown font)

The Boston Globe (July 23, 2014; black font)

Even as the residents were distracted by internecine disagreements over how to fix their decrepit and collapsing HVAC system, their landward neighbor (both of whose towers are taller than theirs) was sizing up another investment opportunity, and in 2008 Don Chiofaro achieved his objective: in financial partnership with an institutional investor, he bought the Harbor Garage


But now it has flags!

With that purchase, Mr. Chiofaro suddenly had a two-part foothold into Harbor Towers’ decision-making:

Harbor Towers residents lease several hundred parking spaces in the garage. (The 624 units have long-term leases for spaces that are set to expire in 2022.)

Mechanical equipment for Harbor Towers is located in the garage building.

As President Nixon’s aide Chuck Colson said, when you’ve got them by the mechanical systems, their hearts and minds will follow.


Now that I have everyone’s attention …

Chiofaro acknowledged that whatever he builds there, “It will have to have a lot of parking. We’re going to replace in some fashion a lot of it.”

The residents of Harbor Towers ought to have been thanking their lucky stars:

Last November, International Place developer Don Chiofaro bought the aquarium garage, with plans to turn it into a hotel, condominiums, and office space. Add that to Rowes Wharf and the now more-or-less-clean harbor, and the Harbor Towers will soon be fully enveloped, for the first time, by respectable society. The surrounding area will see the increase in activity and density that planners had always hoped the towers’ construction would spur.

That Harbor Towers needs such activity is evident from a hilarious cri de coeur Apartment listing review (July, 2010; bronze font) from a renter moving out:

I lived here for two years. I was a renter. The pool and grounds are awesome, sure. The front desk staff are charming and nice. The lobby is impressive. But none of that makes up for the everyday inconveniences of living in this place! Please read my entire review ….

I won’t quote all of it, though interested readers should click over and savor it, because our Deep Throat source reveals what living in Harbor Towers is really like:

You won’t be dealing with the rehab project if you move into the Harbor Towers today. You will be dealing with:

Ongoing maintenance

Never-ending system breakdowns

Unreliable laundry machines. 

As referenced in the 2008 Boston Magazine article, “by design, these are limited to the basement.”

In this day and age, can you imagine such a thing in a high-end condo?

Fire alarms at 4:00 am

Many other annoyances.

Every week there is some kind of massive project going on, whether they are replacing carpets in the lobby, “testing” the elevators, or fixing something that breaks. Most of these “projects” are unnecessary and serve primarily to keep the HOA contractors employed. You will feel like you live in a (2-star) hotel that is always under construction.


But the views are fantastic … if the elevators are working to let you get to see them

Though these well-reasoned and detailed complaints come from only one (former) renter, they all relate to the entire structure(s), and that suggests that where one condo owner has been renting his or her apartment, perhaps many do. 

If you want to own a condo here, think again.

The condo fees are astronomical, and personally I would feel very uneasy with the way the HOA spends money around here. Every week there is a new contractor doing something in the building. 

Renting out the apartments (while living elsewhere) might well be a shrewd strategy for the moneyed elite. 

As they were when they first opened, the towers remain a place where people go to start over, says Hoskins, who moved in after she divorced. “Most everybody I know [here] came from someplace else. It may have been a different life or a different circumstance, but it’s kind of a new chapter in the book. A lot of that energy pervades down there.” 

The towers’ appeal is visual; their flaws are experiential, and for many renters, by the time they are briefed on the problems, they will already have signed the lease.  (Are some also acting as Airbnb hosts, I wonder?  It would be entirely logical.)

The most annoying aspect of living here is that there are all sorts of spontaneous problems that have no explanation. On Friday night, we came home to find no running water. Believe it or not, this is common at Harbor Towers. We couldn’t flush the toilet, take a shower, wash hands, nothing. We called the building manager and they said someone was working on it. We had no water until 10:00 am the next morning. This affected the entire building, not just our unit.

If there has emerged a constituency of owner-landlords, that will represent yet another interest group within the building, further complicating governance and decision-making.

The problems in this building are never-ending. I have spoken with realtors who show units in the building, and they don’t even like bringing their clients here.  One lady said she couldn’t recommend this building with a clear conscience.  The main problem with renting here is that you have to deal with things that are unethical or illegal in Massachusetts – like lack of heat, power, or running water.

Actually, one month we only paid half rent because there were so many problems and interferences in the building (that was the month we went without heat). So maybe try to negotiate with your landlord and use my review as leverage.


Hey, whatever works

2014 and forward

With his company’s acquisition of the garage, Mr. Chiofaro has long known that he would eventually have to address his querulous abutters across the Greenway.  Our 2010 renter again:

[Harbor Towers residents] are trying to do whatever they can to stop the development of the Boston waterfront (there is propaganda all over the building) but what they don’t realize is that the Harbor Towers are the biggest eyesore on the harbor … and the best thing that could happen is if someone took a wrecking ball to this place.


Stand against the imperialist developers next door

That insight gives a different perspective to the incumbents’ objections, as penned in the trustees’ July letter to the Boston city officials:

The letter said the project would worsen traffic, result in high winds, and cast shadows on the water and surrounding properties. The trustees also questioned whether Chiofaro’s arcade through the building constitutes open space under state regulations meant to protect public access to the water.

To that end, Mr. Chiofaro started with an obvious concession:


I’m offering to unfold my arms

He made clear that, at a steep expense, he was going to keep all 1,400 parking spaces to ensure that every Harbor Towers resident can rent or buy a spot.

Long before he announced his plans publicly, Mr. Chiofaro was developing a strategy for securing Harbor Towers’ residents acquiescence if not their enthusiastic support:

After his first proposal for the garage failed spectacularly in 2009 — Menino deemed it too tall — the outspoken developer retreated. Chiofaro, who built the ginormous International Place, decided to win people over behind the scenes in a series of low-key meetings.

These did him some good:

Harbor Towers’ residents are warming up to the developer’s second act, but they remain wary.

Are they?

In a sign that the massive opposition to Donald Chiofaro’s proposed $1 billion twin towers by neighbors at Harbor Towers is thawing, a longtime resident and spokesperson for Harbor Tower residents said the revised 1.3-million-square-foot mixed use project is worthy of consideration.

“I applaud Don for his effort to open up the debate in an intelligent and responsible fashion,” said Lee Kozol, chairman of Harbor Towers’ Garage Committee who has lived in the complex since 1999, during an interview following the project’s public unveiling last week. “Don and his team have made a creative effort to deal with waterfront access.”

In addition to esthetics, Mr. Chiofaro also has some practical arguments on his side:

The fate of the ancient mechanical systems, however, is still up in the air.

Like an artificial heart, Harbor Towers’ mechanical systems exist outside its own body, under Mr. Chiofaro’s garage.  Pity if something were to happen to them, wouldn’t it be?


Them towers might have a little … accident, you know?

Through the years, Chiofaro has offered to move the coolers and boilers or even build new ones on Harbor Towers property.

As Gordon Gekko observed, money clarifies; Mr. Chiuofaro’s proposals aren’t altruism, they’re development economics.  He will have to clear the site of the existing garage (and its subsurface mechanical systems), and the easier a time he has of that (particularly with the parking garage leases that run until 2022 and presumably can be terminated before then only on buyouts), the sooner he can develop.

If residents insisted he keep them at the new development, he’d probably do that, too.

Those living in Harbor Towers ought to find such proposals appealing:


That’s a lot of seduction, isn’t it daddy?

I am not a crazy person, or super-negative. I loved living in other parts of the city (North End, Brookline) and would probably enjoy this area a lot more if the building wasn’t so shoddy.

Don’t be seduced by the beautiful grounds at Harbor Towers. There is a reason why I have a 1-bedroom apartment on the 40th floor with harbor view — for only $1,700 per month. The landlords know that it sucks living here, and they want to give tenants a ‘good deal’ to keep them from complaining on a monthly basis or threatening to withhold rent.

But to some degree, Harbor Towers has become its own tontine:

The average age in Harbor Towers is probably around 60. Unlike other buildings in Boston, I think this place has an older demographic because all of the young condo owners were forced to move out when they were faced with the $80,000 assessment in 2007. The neighbors are all very pleasant and nice, but you’d have to be a pleasant person if you are going to live in a building where you may or may not have running water tomorrow.

Quite possibly another schism is looming inside the building:


Could we have a redo of 1054, Bartholomew?

I doubt it, Francis

[Concluded (!!)  tomorrow in Part 10.]

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