What is the Lawn on D Costing Us?
Jon Chesto’s report in the Globe on Monday noted that the Lawn on D, an almost three-acre parcel immediately behind the South Boston Convention Center, is currently costing about $2.7 million to operate and generating about $424,000 in revenues, sponsorships, etc. Both the operating costs and the revenues are up in 2015, from $2.1 million and $190,000, respectively, in 2014. So the annual loss has also grown from 2014 to 2015, from about $1.9 million to around $2.3 million.
There are many questions that should arise here. Start with equity. Should an authority be spending that much on programming at one park while other Boston’s neighborhoods compete for limited funds in a stressed City of Boston budget?
Then there is the question of highest and best use. No doubt that thousands of people enjoy the park (at a subsidized rate), but the fact is that the resources represented by the parcel could do a lot more good for the state if put to a different use. Chesto quoted Greg Sullivan, Pioneer’s research director, as saying: “This is a prime developable piece of property that’s owned by the public in an area that’s undergoing tremendous real estate development.”
Greg is right. And here is why. Property values in Boston’s Seaport District are sky high right now. Back in December of 2013, as the Boston Business Journal noted, the three-acre parcel at One Seaport Square was “permitted for a pair of residential towers” and “sold to a joint venture led by Berkshire Group for $72 million.” That’s $24 million an acre.
That’s approximately the same size as the Lawn on D site. Granted, the One Seaport location is better but even were the temporary play space to fetch half what John Hynes’ Boston Global Investors and Morgan Stanley Real Estate Investing got from the Berkshire Group, it would be a lot of money at a time when the state is struggling to find ways to fund a $7 billion MBTA deferred maintenance shortfall, a $4 billion higher education deferred maintenance shortfall, and a growing Medicaid budget shortfall.
More recently, WS Development acquired 12.5 acres in the Seaport Square area. They paid $359 million, or almost $30 million an acre. In Tim Logan’s Globe story Dick Marks of WS Development is quoted as follows:
“This is the hottest neighborhood in town. It’s an extraordinary opportunity.”
Yep. With literally billions in investment underway, why is the Convention Center Authority holding onto a temporary park? In great part it is because the Authority wants another crack at expanding the convention center—space that the convention center doesn’t need and that would not benefit the region. To the contrary, the city would benefit from additional development in that area.
While bocce is fun, it’s not that much fun.
The real opportunity with selling the small lot is that it could help out other parts of the state where infrastructure investments in the tens of millions of dollars are not frequently seen, except when some casino comes to town with promises of wads of cash.
Follow me on twitter at @jimstergios, visit Pioneer’s website, or check out our education posts at the Rock The Schoolhouse blog.