Government Real Estate Schools

150 North St. & 130 Richmond St. Buildings Sale Update from FinComm Meeting

The outcome remains uncertain for the large public property sites up for sale at 150 North St. and 130 Richmond St. in the North End. Will a large developer bid much higher than the $11.3 million assessed value to build condos or apartments taking advantage of the prime Greenway location? Can the properties be used to expand the overcrowded Eliot K-8 School? Or, will the North Bennet Street School be able to leverage its existing North End properties to expand at the site as a public benefit solution for the Eliot expansion?

There are very few remaining large public property lots left in the North End, so the process is being closely scrutinized. The North End has an activist history and an uproar is possible should the process derail itself from community interests.

One group overseeing the process is the Boston Finance Commission, FinComm. At a meeting this week, the City’s watchdog commission reviewed the status of the pending property sale of the City-owned buildings.

  • The City formally issued a request for proposal (RFP) on January 10, 2012.
  • A site viewing was held on January 26, 2012, with about 30 interested participants. Notable attendees included Pizzuti Development, The Congress Group, Millennium Partners, Campion & Co., Urban Meritage LLC, Urbanica, Otis & Ahern and the North Bennett Street School.
  • The City followed up the original RFP with a supplement related to hazardous material issues at the properties.
  • First round bids are due on February 16, 2012.

Second Round Twist – An interesting feature of the process is a second round of bidding as part of the RFP process. Once first round bids are received, the top three bids will be revealed to those bidders and each will have an opportunity to re-bid. According to FinComm’s Executive Director, Matt Cahill, this should “maximize the City’s return” but also give the most interested parties an opportunity to make their bid more competitive.

Valuing Public Benefit – The RFP gives the City the opportunity to value public benefits in the process. This could make up for some difference in price, for example, if classroom space for the Eliot is valued as a benefit to the city. This feature helps NBSS which is in a position to offer such benefits to Boston Public Schools, although it is unclear how such a valuation metric would be determined. FinComm noted that tax revenues to the City would also be counted as a public benefit.

Eliot School parents are also watching the process closely and launched a petition last week calling for “a long-term solution to the Eliot School’s expansion needs before the City of Boston-initiated sale of the buildings at 150 North Street and 130 – 140 Richmond Street is completed.” After a week, the petition has 650 signatures as of this writing.

NBSS President Miguel Gómez-Ibáñez recently told the parents that his non-profit trade school is looking to expand to the North St./Richmond St. site and that his existing North End buildings could be used for a phased-in expansion of the Eliot School.

Parents say they are open to the NBSS as a solution, but want the City to specify its expansion plan for the Eliot before public property in the neighborhood is sold to private entities. The NBSS President told the parents their aspirations for the Eliot are consistent with his goals as well.

Through an agreement with NBSS, the Eliot School is using some classrooms there for the current school year to temporarily alleviate space issues at the public K-8 school. (See Eliot School Parents Hear From North Bennet Street School President About North St. Buildings, Potential Swap And Eliot Expansion.)

FinComm will oversee the bidding and award process, although no bids are expected to be revealed publicly until the City decides to designate a winner. The Commission has been active in the process leading up to the current RFP.

In December 2010, FinComm wrote a letter to the Mayor’s Office expressing concern regarding a potential building swap, saying that “This should be a simple sale process.” Further, the Commission wrote,

“Although the (North Bennet Street) school has a long history in Boston, we believe the city itself should ensure a robust marketing effort to sell the two properties” at 150 North St. and 130 Richmond St. (View the December 2010 Finance Commission Letter to Mayor Menino.)

130 Richmond St. - One of the two adjacent city buildings up for sale.

In April 2011, FinComm moderated its position in meetings and communication with City Councilors, the North End’s State Rep. and Superintendent of Boston Public Schools. In an email, FinComm’s Cahill wrote:

If the residents of Boston would benefit from the expansion of the Eliot School, it is important to work intelligently toward that goal.  It seems the first step would be a space study to ascertain the needs, responsible growth, and financial options for the Eliot expansion.  Due to the fact that large sites are rare in the downtown Boston area, the sale, swap or trade of the North and Richmond Street properties before all avenues are explored would not benefit the future of the city.

At the same time, FinComm questioned the reassessment of the North Bennet Street School properties from $4.9 million in 2008 to $9.3 million in 2010. Over the same period, the City-owned properties showed a slight assessment decrease from $8.0 million to $7.8 million. Implying the assessments were increased to potentially facilitate a private property swap with the City, FinComm wrote:

It was difficult to understand the dramatic  increase of the North Bennet properties, especially considering the non-taxable status of all properties involved and the fact that the removal of the elevated highway did not appear to effect the city properties’ assessments so dramatically.

The assessment issue appears to be resolved now that the City’s Property Management has reassessed the buildings at 150 North St./130 Richmond St. upward to roughly $11.3 million.

The RFP includes specific language that could help a NBSS building swap followed by an expansion of the Eliot School into the existing NBSS buildings. Notably, the RFP gives preference to responses with “a public purpose” benefiting city residents. The Eliot has a waiting list larger than its current student population, so a plan allowing for expansion of the public school certainly meets the standard of a community benefit.

Importantly for NBSS, the City’s RFP says it will accept a North End property swap instead of a cash proposal. The property swap must include a North End building over 24,000 square feet. The NBSS existing properties include about 40,000 sq. ft. in the North End and 10,000 sq. ft. at its Arlington site. The combined North St. buildings are over 70,000 sq. ft. in capacity.

Gómez-Ibáñez believes NBSS will still need to make up a multi-million valuation gap between the value of his current property and the $11.3 million assessment of the larger North St. buildings. The NBSS President cautioned that raising large funds in such a short period may be challenging for the trade school. Further, he estimates another $12 million will be required to renovate the vacant North St. buildings.

No bids have been received so far, although it is likely that submissions will be last minute toward the February 16th deadline. After that, the aforementioned second round will take place. The City will then need to decide whether to pursue the sale and designate a buyer.

In parallel, FinComm believes the City may be performing additional due diligence on the properties related to their potential use as a public school. Hazmat remediation, egress modifications and the site’s location over a tunnel have been identified as monetary and timing challenges for future use of the properties that previously served as a printing plant and police station. For developers, zoning may be an issue at the site where height is capped at the North End’s traditional 55 feet standard.