Fuller Watch

Joined: January 16th, 2007, 5:15 am

December 27th, 2017, 8:05 pm #741

LDS Findings and Recommendations: 
I. Are the financial estimates provided by the Developer reasonable? 

Summary of Projected Development Costs 
i. Acquisition Cost: 
a) LDS believes the acquisition cost is low for both the 100% market and 85% market scenarios. For example, the 260-unit Gutierrez 40B project in Westford has a purchase price of $23,000 per unit, and that includes 25% of its units having an affordability restriction at 80% of AMI, 10% higher than the inclusionary housing requirement in the Gloucester Zoning Ordinance. In fact, there are many similar sized M.G.L. Chapter 40B developments on the North Shore and elsewhere in Massachusetts that have been privately funded and built successfully with a 25% affordability requirement. Most M.G.L. Chapter 40B development seek to increase density over underling zoning. The proposed residential portion of the Fuller Mixed Use Development is 6.2 acres. With 200 units this equates to 32 units per acre and would be characterized as very dense by local standards. 

The 100% market cost allocated to the residential units, according to the Developer is $3,393,000 or $16,965 per unit. This is a low for permitted land since as noted above, LDS typically see prices ranging from $20,000-$30,000 for permitted land per unit. If you have a wholly affordable development, LDS typically see $20,000 per permitted unit. As noted in the chart below, the developer has a purchase price cost savings of $607,000 on the 100% market scenario and $1,867, 000 on the 85% market scenario. 


ii. Residential & Community Building Costs: 
b) General Conditions, Overhead and Fee: It is our understanding that the developer has included 7.2% or approximately $3,200,000 for developers’ general conditions, overhead and fee across the construction costs and general development costs. This revenue will go to Dolben as the developer of the residential portion of the development. 
c) Construction Costs: Building. The hard costs at $162,330 per unit or $148 a square foot seem reasonable. LDS does recognize that we are currently in a very volatile construction environment given the tremendous amount of building going on in Massachusetts and in particular, personnel costs continue to increase. We note that within these costs there is builders profit and overhead 
d) Construction Costs: Site Work. LDS typically sees site work costs at $20,000 per unit. The Developer has provided a site cost of almost 1.75 times that amount or $35,000 per unit allocated to the residential phase of the project. This accounts for $3,000,000 in additional costs to the residential phase of the development. LDS asked the Developer to provide the total site work costs for all three phases of the project and they have responded that “it is an arm’s length negotiated agreement among the three members” as stated in a memo dated December 5, 2017. Since LDS has not seen this agreement, LDS does not know if the $7,072,000 represents 100% of the amount of site costs or 66% of site costs, the percentage used for the purchase price. Therefore, given the break out of costs provided by the Developer and the fact that the residential phase will most likely be the first phase of the Development, LDS can reasonably assume that all site costs have been allocated to the residential phase. We note within these costs there is builders profit and overhead. 
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Joined: June 20th, 2007, 11:54 pm

December 27th, 2017, 8:37 pm #742

Karly wrote: Regarding the site costs...I was told that what was not expected was that the field had boulders buried in it.  They were put there and covered when O'Maley was built and no one involved in the deal was aware of it.  They would need to be crushed.  The developer did account for other site costs that came up.  So my read of the report is that the price was good, the site costs were higher than expected and  the hardship if it exists is not due to building 30 affordable units. Which would seem to mean that under 5.11 this would not be a reason to not build them.   So we will have to see where it goes from here.
I remember when the site was cleared for St. Peter's HS there were dozens of massive boulders unearthed, some as big as a small house! 
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Joined: February 19th, 2010, 9:12 pm

December 27th, 2017, 9:36 pm #743

That makes more sense, Dun.  I wonder if the boulders were buried way back then. At any rate, they expected the field to be a field...not to have huge boulders buried under it.  So that is what I've been told is the main issue that changed the site development costs.  I don't know how the splitting up of the costs between the 3 components works or what would be expected.
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Joined: February 19th, 2010, 9:12 pm

December 27th, 2017, 9:46 pm #744

One of the most interesting parts of the report to me is where the reviewer points out the very small difference in return on investment whether the units are all market rate or include the 15% affordable housing.  So it is hard to see the objection to building them if they are willing to build the 200 market rate units for a similar return.
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Joined: June 20th, 2007, 11:54 pm

December 28th, 2017, 6:13 pm #745

Karly wrote: That makes more sense, Dun.  I wonder if the boulders were buried way back then. At any rate, they expected the field to be a field...not to have huge boulders buried under it.  So that is what I've been told is the main issue that changed the site development costs.  I don't know how the splitting up of the costs between the 3 components works or what would be expected.
Some were placed around the ball field and some were buried deeper. Us kids would ride our bikes over there and used the construction roads as a race track. We watched them move a massive boulder by digging a trench in front of it with a ramp leading to the deepest part of the trench. They used two bulldozers to push the boulder down the ramp. When it was in the deepest part of the hole about 2' still protruded from the ground. After they filled everything back in they blasted away the top of the boulder. That boulder must have been at least 30' in diameter.
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Joined: August 20th, 2007, 10:17 pm

December 28th, 2017, 7:04 pm #746

Dun Fudgin wrote:
Karly wrote: That makes more sense, Dun.  I wonder if the boulders were buried way back then. At any rate, they expected the field to be a field...not to have huge boulders buried under it.  So that is what I've been told is the main issue that changed the site development costs.  I don't know how the splitting up of the costs between the 3 components works or what would be expected.
Some were placed around the ball field and some were buried deeper. Us kids would ride our bikes over there and used the construction roads as a race track. We watched them move a massive boulder by digging a trench in front of it with a ramp leading to the deepest part of the trench. They used two bulldozers to push the boulder down the ramp. When it was in the deepest part of the hole about 2' still protruded from the ground. After they filled everything back in they blasted away the top of the boulder. That boulder must have been at least 30' in diameter.

Boulders on Cape Ann? How could anybody be surprised by the presence of boulders here? Sam Park developed the adjacent parcels and is very familiar with the topography and site conditions. An experienced development team claiming they didn't know they would encounter boulders here is a sublimely ridiculous assertion.They are trying to weasel their way out of fulfilling their legal obligations. More lies and unfulfilled promises from Sam Park and his associates.
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Joined: June 25th, 2007, 6:00 pm

December 28th, 2017, 7:38 pm #747

They found granite when building O'Maley as well. In fact granite seems to be discovered on Cape Ann every time a major project is initiated.
The only thing new about this is that perhaps it is the very same granite moved up from O'Maley and rediscovered :)
Don't you see that the whole aim of Newspeak is to narrow the range of thought?...   ..........
 George Orwell , 1984
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Joined: August 13th, 2005, 5:30 am

December 28th, 2017, 9:38 pm #748

I'm glad others thought that the boulder claim was snort-worthy, lol.  Especially if they were trucked in - they can be trucked out, no?

The opinion of the reviewers about the low acquisition cost should give the Council some backup if they need to counter a potential claim by the developers that in order to provide on-site affordable they need to re-negotiate the purchase price.
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Joined: April 15th, 2006, 1:02 am

December 29th, 2017, 9:47 am #749

I hope they don't but I'm beginning to think the city will screw up this whole thing somehow.
You think you know it, but you haven't got a clue!!
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Joined: January 16th, 2007, 5:15 am

December 29th, 2017, 6:26 pm #750

NightStalker wrote: I hope they don't but I'm beginning to think the city will screw up this whole thing somehow.
What would screw this up would be for the city to act out of fear that this particular deal might not go through. That would be a mistake. Personally, I don't think it will -- there is a lot of momentum to build the new Y, so much so, that I think people tend to be blinded a bit by that prospect and ignore or overlook the issues at play with the rest of the project. We as a city have already given a substantial amount of relief to the applicants in the form of the overlay. The affordable housing requirement in 5.11 is there precisely for projects like this and given that the independent review showed that there was no economic hardship, the city council is no longer in a position to grant the alternatives (assuming they listen to that recommendation). Sam Park wants to build the additional retail/commercial space, which is all well and dandy, but don't forget that there's a phantom hotel and assisted living center up there as well, in addition to a number of existing retail spaces that have NEVER had a tenant in the nearly 8 years of their existence. I'd like to see this project be built and succeed, but not at the expense of the city ceding legitimate and normal expectations in the form of the affordable housing. I hope they pull it together, but I see little wiggle room for the Council to ignore the analysis they've asked for. 
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Joined: February 19th, 2010, 9:12 pm

December 29th, 2017, 6:39 pm #751

I am in pretty much the same place, Jason and I think I've talked with most of the parties involved.  I would like it to happen but the fact that the return on investment is pretty much the same with or without the affordable housing and that the hardship, if any, is not due to building AH makes me wonder why they aren't just doing it.  It will be interesting to hear the response to this report.  

Though not directly linked to this project, I additionally think we need the Harborlight/YMCA AH project proposed at the old Y, if the Fuller project goes through.  I think we need the 30 units at Fuller and the 40+ truly affordable units at the old Y (they may change the original 50+ number to include some 2 bedroom units.)  And we need to help them make that happen.
Last edited by Karly on December 30th, 2017, 10:15 am, edited 2 times in total.
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Joined: January 16th, 2007, 5:15 am

December 29th, 2017, 6:45 pm #752

Karly wrote: I am in pretty much the same place, Jason, and I think I've talked with most of the parties involved. I would like it to happen but the fact that the return on investment is pretty much the same with or without the affordable housing and that the hardship, if any, is not due to building AH makes me wonder why they aren't just doing it.  It will be interesting to hear the response to this report.  

Though not directly linked to this project, I additionally think we need the Harborlight/YMCA AH project proposed at the old Y, if the Fuller project goes through.  I think we need the 30 units at Fuller and the 40+ truly affordable units at the old Y (they may change the original 50+ number to include some 2 bedroom units.)  And we need to help them make that happen.
Yup... but they're two separate projects. Allowing the 200 units to go in without the 30 affordable only deepens our problem in addressing a rapidly growing problem with regards to affordable, workforce housing.
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Joined: February 19th, 2010, 9:12 pm

December 29th, 2017, 6:49 pm #753

There is something about the term workforce housing that bothers me.  I won't go into it.  However I agree with you that our Housing Production Plan shows that we need units priced like the 30 at Fuller would be (based on area median income of $90K+) and ones like the 40-50+ units that the separate but important Harborlight/YMCA Middle Street project would bring (based on far lower income affordability levels.)
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Joined: August 13th, 2005, 5:30 am

December 29th, 2017, 7:00 pm #754

Sam Park wants to build the additional retail/commercial space, which is all well and dandy, but don't forget that there's a phantom hotel and assisted living center up there as well, in addition to a number of existing retail spaces that have NEVER had a tenant in the nearly 8 years of their existence.

And plans to put a building next to PetCo which will house a HomeGoods and a yet-to-be-announced chain restaurant/sports bar.  They (Gloucester Commons) were last before the licensing board in September, I think (they bought the Ocean View license).  At that meeting they stated that the plans were finished, had been submitted to TJX for review, and they expected to pull a building permit by year-end.  They stated that they would update the licensing board in January.
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Joined: August 20th, 2007, 10:17 pm

December 29th, 2017, 7:15 pm #755

The bids were submitted over two years ago and an award still hasn't been made. This is highly irregular; most awards are made within 90 days. Market conditions and the needs of the City change over time---and we now recognize we need a central location to build a new school. Park and Dellicker are leading us like sheep to the slaughterhouse. It is time for us to put an end to this chicanery.
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Joined: August 13th, 2005, 5:30 am

December 29th, 2017, 7:18 pm #756

Karly wrote: ... makes me wonder why they aren't just doing it.
That's been one of my questions all along.  Somewhere here in this massive thread I posted about some other non-40B Dolben projects where they did include affordable housing per the communities' requirements.  I don't get why they are so dead-set against it here.  And they have been from the beginning - long before those pesky site issues came to light.  In case I haven't mentioned it ... they submitted an RFP response that included the statement, "In an effort to maximize the purchase price to the City, we have elected to include only market-rate housing in our proposal."
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Joined: August 20th, 2007, 10:17 pm

December 29th, 2017, 7:41 pm #757

'In an effort to maximize the purchase price to the City, we have elected to include only market-rate housing in our proposal."

Since the RFP stated that the bidder would be required to comply with all Federal, State, and local laws and regulations (which includes the city's inclusionary housing regulations), the city should have deemed this bid non-responsive to the RFP and returned it to the bidder..
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Joined: August 13th, 2005, 5:30 am

December 30th, 2017, 8:05 am #758

City Council Overlay hearing, April 25, 2017 - CapeAnnTV - the Overlay Public Hearing starts at about 85 mins.

http://vp.telvue.com/preview?id=T01896&video=310738

 Peter Gordeau, for the developers:

"Approximately 35 parties expressed interest in bidding on the project."

"The large number of potential bidders and the City's emphasis on economic return forced FMUV to figure out how to maximize its cash offer for the property."

"Creation of affordable housing was not listed among the selection criteria or goals nor was it mentioned in the RFP generally.  In fact, the RFP expressly stated the City's willingness to assist in the rezoning of the site to facilitate a strong economic outcome."

"In its RFP submission of November 2015, FMUV proposed to pay 5.1m for a mixed use project that would include a new YMCA, retail, and a 170 units of market rate housing.  Our bid clearly stated and I quote, in an effort to maximize the purchase price to the City, we have elected to include only market-rate housing in our proposal, unquote.  Our bid was accepted by the City."

"After a lengthy negotiation with the Administration, the FMUV proposal was modified.  Residential density was increased to 200 units while the scope of the retail was substantially reduced.  To further enhance its bid for the property, and to support the agreed-upon payment in-lieu approach from the sale proceeds, FMUV agreed to supplement the purchase price by making an additional half-million dollar payment raising the total price to 5.6 million dollars."

"It is worth noting that if we had included affordable housing on-site units in our project, our purchase price would have been significantly lower."
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Joined: June 25th, 2007, 6:00 pm

December 30th, 2017, 11:06 am #759

As I remember the city rezoning offer involved change from school to residential, retail, and YMCA use. I do not recall the city offering to compromise the requirement for affordable units in every housing complex of more than 8 units. These guys are creepy. Get them out of here. We need that property for schools and perhaps police and fire. How about the city does some planning for needed future facilities. I have never been in favor of moving the YMCA out of downtown either.
Don't you see that the whole aim of Newspeak is to narrow the range of thought?...   ..........
 George Orwell , 1984
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Joined: January 16th, 2007, 5:15 am

December 30th, 2017, 11:35 am #760

Damon, these guys aren't creepy... let's not make this personal.
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