FOGGY BOTTOM AND WEST END ADVISORY NEIGHBORHOOD COMMISSION 1920 G STREET, N.W., WASHINGTON, D.C. 20006 • (202) 659-0011
March 7, 1988
Mr. Edward Curry Executive Director Zoning Secretariat District Building, Room 11 1350 Pennsylvania A venue, N.W. Washington, D.C. 20004
Re: Z.C. Case No. 87-18M/86-1C
Dear Mr. Curry:
This letter and the attached exhibits respond both to the summary /abstract report filed by the Office of Planning on February 17, 1988, in the above referenced case and to the additional material submitted on February 29, 198~ by the applicant -- Boston Properties -- in the same case. In exercising our righls as a party under the Zoning Regulations to respond to Boston Properties' submission, ANC 2A would like to acknowledge the technical assistance provided by the Washington, D.C., Justice for Janitors Organizing Committ'ee, Local 525 of the Service Employees International Union.
We reiterate our unequivocal opposition to the approval of Boston Properties' application for a Planned Unit Development at 25th and N Streets, N.W. (Square 24, lot 110). We see no merit in the total package prepared by the developer and we ask that it be rejected.
First we should like to address the paper submitted by the Office of Planning. Though necessarily there will be some repetition in our comments on it and on the Boston Properties submission of February 29, we believe it important to comment directly on each so there will be no doubt about our position.
We note with dismay that the Office of Planning does not even address the matter of the covenant though in the past it urged ANC 2A to mute its objections to the transfer of all commercial FAR from lot 110 to lot 111 so that the U.S. News and World Report building could be constructed to its present configuration, thereby enabling the developer to increase his profit there. We would note that both ANC 2A and ANC 2B oppose the setting aside of the covenant. ANC 2B, as you are aware, has within its boundaries lot 802 on Square 35, which would be changed from mixed use to residential under the applicant's proposal.
As we have stated previously, we believe the proximity of the 25th and N Street site to extensive and varied recreational facilities, a school and places of
ZONING COMMISSION District of Columbia CASE NO.87-18 EXHIBIT NO.83 employment for potential occupants of a residential building there make it uniquely suited for residential use. It would also create a logical link with other nearby housing and would go far to improve the safety and ambience of the area, thus helping to restore to the West End some of the residential quality which has been steadily eroding in recent years. The Office of Planning report ignores all that as well as the fact that other proposals for the West End are beginning to include housing in their plans. It is our contention that lot 110 is an important site for residential construction and that the applicant should be required to meet his obligations as provided in the covenant.
Adding some housing to an already approved mixed use project does not represent linkage as we understand it, and it should be clear both to the Commission and the Off ice of Planning that Boston Properties' proposal would result in a net loss of housing since relatively few additional units would be created at 23rd and N Streets to compensate for the waiver of the requirement for a strictly residential building at 25th and N Streets. In fact, about 100,000 square feet of residential development potential would be lost.
Nor do we agree with the Office of Planning that Alternative A is preferable to Alternative B as set forth in the application. Clearly we are opposed to both, but we find Alternative A even more objectionable than B. It is not in character with the adjacent Bureau of National Affairs building and would seriously dwarf it. We do not share the enthusiasm of the Office of Planning for the amenities proffered by Boston Properties either. Most are meaningless, though in the self interest of the developer, and both singly and in combination they cannot compensate for the negative effects of the proposal on West End development.
We think the Office of Planning report reflects a singular disregard for the community and its citizens and we trust the Commission will recognize its shallowness.
Now let us turn to the February 29 submission by the applicant.
Boston Properties again has ignored the seriousness of its attempt to renege on the covenant on lot 110. The applicant asks the Commission and the entire Government of the District of Columbia to set a dangerous precedent that can lead to an assault on the public trust. Given this possibility, the applicant's proposal must be scrutinized with great care. We have undertaken such a review and have come to the conclusion that Boston Properties' proposal can not meet this necessarily high standard.
The applicant supports its extraordinary request to be released from the covenant restricting lot 110 on Square 24 to residential use by citing economic and design constraints. These conditions were self-imposed and are overstated. A careful analysis of the costs and benefits associated with the proposed PUD reveals the shallowness of the assertion that residential development of lot 110 is infeasible.
Boston Properties overstates the land value of lot 110
To substantiate the contention that residential development of lot 110 is infeasible, Boston Properties presented a cash flow analysis for residential condominium development on lot 110 that relied on a 1987 land value of $7.9 million.1 This value is not supported by publicly available documents: lot 110, according to property tax assessment records, has a market value of $5.8 million during the current 1988 tax year. Boston Properties thus has overstated the land value by as much as $2.1 million. (The applicant also has presented other land value figures, all of which are greater than $5.8 million.)
Boston Properties' estimated "loss" from residential use of lot 110 is high
By overstating the land value of the site, the two residential pro formas presented by the applicant overestimate by $0.9 million or $2.1 million the cash flow loss from residential development of lot 110. This misrepresentation leads us to question the validity of the other cost and income figures contained in Boston Properties' residential financial analyses for lot 110. Even if these other figures are correct, the applicant's estimated pre-tax cash flow "loss" of $4.1 million from residential condominium development of lot 110 shrinks to a $2.0 million loss when based on an accurate land value.
Boston Properties forgets that the current proposal covers 3 lots
There are more errors in Boston Properties' analysis than simply the unreliable estimates related solely to lot 110. The commercial FAR and the associated subsidy transferred to lot 111 also need to be considered. Once again the applicant resorts to selective inclusion and financial manipulation in its presentation of the relationship between these two lots on Square 24.
The applicant appears to have forgotten its own proposal when asserting that the "simplest way to understand the relationship is to think of the property [on Square 24] as a single lot containing approximately 50,000 square feet of land zoned CR." This is misleading. The proposal under consideration involves three lots -- two on Square 24 (lots 110 and 111) and one on Square 35 (lot 802) -- with approximately 75,000 square feet of land combined. And the simplest way to understand Boston Properties' proposal is to view it as a request to build two office buildings and one residential building, rather than the one office building and two residential buildings allowed as a matter of right.
Boston Properties mistakenly argues that land alone must catry the subsidy for residential development
Boston Properties states that, because the land cost of lot 111 reflected its commercial development capacity, there is no subsidy available for residential development of lot 110. If commercial value was paid for the lot 111 vacant land, the cost of lot 110 land then reflects residential use potential only -- lot 110
1 Base figures and calculations described in the text of this letter are presented in Figure l; the exhibits to this letter in which the base figures are presented are also identified in Figure 1. would have a lower value per square foot of land than if it had any commercial development potential. But, more importantly, Boston Properties' assumption that the commercial-residential land value differential alone is to carry the subsidy for residential development on lot 110 is patently absurd.
The applicant has ignored the availability of subsidies from cash gains from the already completed and occupied commercial improvements on lot 111. Boston Properties fails to present figures on such gains yet they are relevant -- as it knows. For example, in its original, approved PUD proposal for lot 802 on Square 35, Boston Properties' cash flow analysis for the mixed use building shows a pre tax positive cash flow of $11.3 million over 11 years, while the developer showed a loss of $3.3 millioh for a building solely devoted to residential use on the site. (See Exhibit 5.) Under that original proposal, the cash flow gains from the entire office building element -- not just the land value.differential -- provided the positive cash flow for the project as a whole.
Boston Properties ignores normal gains from lot 111, interest sale of $80 million
The applicant may not currently have any ownership interest in the improvements or land on lot 111, and, thus, there may be no way to match year by year or dollar for dollar the positive cash flow from the office building on lot 111 with the projected "losses" from residential use of lot 110. Boston Properties has not presented any figures on the cash gains from the U.S. News and World Report property. But given the estimated $11.3 million in cash gains from the approved mixed use PUD on Square 35 (with 47,000 square feet of office space and 52,000 square feet of residential space), the gains from the 150,000 square feet of office space on lot 111 should be able to subsidize a $2.0 million cash loss from 125,000 square feet of residential condominium development on lot 110. In addition, Boston Properties' may have $80 million -- representing a windfall of $50 million -- as a result of the reported sale of the U.S. News and World Report property. (See Exhibits 6 and 7.) This gain certainly is enough to subsidize an estimated loss of $2.0 million from the development of residential condominiums on lot 110.
Boston Properties' misleading estimate of the "subsidy" from office development of lot 110
After presenting a faulty analysis of the relationship between the lots on Square 24 and ignoring the lot on Square 35, Boston Properties reverses its logic, ignoring lot 111 and presenting an incomplete and misleadiqg analysis of the relationship between lot 110 on Square 24 and lot 802 on Square 35. Presumably this inconsistency is based on the misguided assumption that the office building on lot 111 is irrelevant because, according to the applicant, there is no remaining subsidy for the residential development of lot 110. Office development on lot 110, according to the applicant, is, however, capable of subsidizing residential development on Square 35!
Bostoh Properties readily submits figures on the projected cash "loss" from the residential development ort Square 35, and what kind and amount of costs the proposed office building on lot 110 will "subsidize." The total costs are $10.1 million. The credibility of the total, however, is questionable because of the character of these costs: $560,000 arc related to additional costs encountered by the applicant in presenting proposals to the Commission that lacked merit; $752,000 are for the contribution to PIC and amenities, some of which would be provided by any developer to increase the property value; $1.9 million represents the projected cash loss from residential development on Square 35, which is probably overstated; and $6.8 million are for the "actual land cost" of lot 110, which again is overstated. (Including the land cost as a "subsidy" requires a remarkable twist of logic: any development has to "subsidize" the cost of the land on which it is built.)
Why no subsidy available from U.S. News building?
Even if one accepts Boston Properties' $10.1 million "subsidy" figure, ANC 2A wonders how the smaller office building proposed for lot 110 can carry a "subsidy" of $10.1 million when the applicant vehemently denies the possibility of the larger U.S. News and World Report building carrying the subsidy for the residential development of lot 110.
Residential condominium development of lot I 10 would require only a $2.0 million subsidy -- using the assessed land value. (This compares favorably with the real subsidy -- the projected cash loss -- of $1.9 million needed from the proposed office building on lot 110 for the residential development on Square 35.) Even the less feasible alternative -- for residential rental units -- that requires a subsidy of $8.9 million (again overstated) presumably would be more attractive to a developer than the stated $10.1 million "subsidy" the off ice building on lot 110 will have to carry.
Benefits of additional office development
Boston Properties can not pass up an opportunity to reap the tremendous benefits of office building development. The applicant has not disputed that it would receive at least $13.6 million or $15.9 million in cash flow over 20 years from only the additional office space proposed over what would be allowed as a matter of right. (See Exhibit 4.) And this is exclusive of gains from the matter of-right development of the three lots as well as appreciation and the possibility of selling a building like that on lot 111 for $80 million. Under Boston Properties' proposal for more office space, the benefits that it would acquire dwarf the public benefits offered and the residential development opportunities foregone.
Conclusion
Boston Properties and Mortimer Zuckerman have cynically attempted to postpone as long as possible the requirement to build housing in the West End. They then claim infeasibility in the hope of being released from their obligation. But, given the small subsidy required ($2.0 million) in relation to the normal or windfall gains from the office building on lot 110, the infeasiblity claim for lot 110 is self-serving and spurious -- at best. The public benefits from the proposed development are insignificant compared to the private gains as well as the public losses. With their greed and deception, Boston Properties and Mortimer Zuckerman would make victims of the residents of the West End and the District of Columbia as a whole. To prevent this, all should heed the lesson learned by the residents and officials of New York City in recent dealings with this developer. (See Exhibit 8 -- "The Sale of the New York Coliseum.") Boston Properties should be held publicly accountable for its statements and actions. The covenant should not be terminated. And the proposed PUD should be rejected.
Sincerely, \h~~-~ Charles L. Clapp Chair, ANC 2A
Attachments Figure 1
Financial analysis element Amount Exhibit a) 1987 land value of lot $7.9m 1 110 as stated on Boston Properties• residential condominium proforma b) 1988 land value of lot $5.8m 2 110 according to tax assessment records c) 1987 land value of lot $6.7m 3 110 as stated on Boston Properties• residential rental proforma d) "actual land cost" of lot $6.8m 110 presented in Boston Properties' 2/29 submission
Boston Properties overstates land value of lot 110
- on residential condominium proforma a - b ($7.9m - 5.8m) = $2.lm - on residential rental proforma d - b ($6.7m - 5.8m) = $0.9m Figure 1 (continued)
Financial analysis element Amount Exhibit f) Boston Properties' statement $4.lm 1 of loss from residential condominium development of lot 110 g) Boston Properties' statement $8.9m 3 of loss from residential rental development of lot 110
Boston Properties overstates residential loss on lot 110
- on residential condominium proforma stated loss less land value discrepancy of $2.lm (-$4.lm + (7.9m - 5.8)) = $2.0m loss - on residential rental proforma stated loss less land value discrepancy of $0.9m (-$8.9m + (6.7m - 5.8)) = $8.0m loss
h) 1988 value of U.S. News $30.lm 6 building according to tax assessment records i) 1987 reported sale of $SO.Om 7 interest in U.S. News building
Boston Properties windfall from sale= $49.9m EXHIBIT 1
EXCERPT FROM BOSTON PROPERTIES'
"APPLICATION TO THE DISTRICT OF COLUMBIA
ZONING COMMISSION FOR A PLANNED UNIT DEVELOPMENT"
OF MARCH 31, 1987
(EXHIBIT NO. 6 OF CASE RECORD) IGIT.. PIGPUTIH IOUAll! 24 IESIDfNIIAL CtlNDDNIIIUMS WASHINGTON, D.C. CASH fUJII ANALYSIS 1987-1999 ( II GaRENJ DOLLAISJ
1987 19111 1989 1990 1991 1992 l99J 1994 1995 IN 1997 1998 TotAL ······································I. LANO VALUE - 1 LAND VALUE '7,996,929 IO IO IO ...... IO so so so so so 11...... DEvt:LOPMENl COStS•CCINDl:MIIIUt A. LAIII DnELDPMHl COSTS AND MAID COIISTRUCt ION COSTS 2 ABOVE GRADE .. 11,132,161 12,208,042 .. IO IO IO IO IO so so IO IO lll.1Mlt,210 J BELOW GRADE 0 1,:sa4,0Jl 346,008 0 0 0 0 0 0 0 0 0. 0 1,130,0<0 • TOTAL NARD CDIISTIUCTUII COSTS ID 110.216,200 12,ss,,oso .. IO .. ID ID so IO ID ID IO tU,110,250 .. son costs s AltCIU HCTUUI. AND ENGIIIEEIING ffll ID 161D,OOO ID ID IO so IO ID IO IO ID LOAV POINTS AND FEES 0 191,55ft 0 0 0 0 .. .. -.ooo 6 0 0 191,554 7 ADV£1JISING 500,000 0 0 • • •0 •0 •0 500,DDO a LEGAL fHS MD DOCUMEIJ PREPARATIC:. • ,a,ooo •0 •0 0 0 • • • • 40,000 9 dEl,.S AID SALES DfflU • 150,000 0 0 0 •0 • • •0 • •0 • 150,000 10 SALES Off ICE OVERHEAD •0 100,000 •0 0 0 0 D •0 • 0 •0 D •0 100,000 II CONDD f£EI OIi UNSOLD tlllfl 0 150,000 0 0 0 •0 0 0 0 '50,000 u OVERHEAD 0 57',610 •0 •0 0 0 • 0 0 0 0• 0 574,610 1J TOT AL SOFT COSTS IO R,386,16' so ID ID• IO IO IO • ID 12,386,16' ? ...... I-' c. IOJAL DEYELOPIEII COSTS • CCllltO 14 TOTAL HAID costs IO 110,216,200 12,554,0SD ID .. IO IO IO IO 112,770,250 TOTAL .. .. Z,386, 16' 0 0 0 .. 15 son cos,s 0 0 0 0 .. 0 0 2,J86,"' 16 TOTAL DEVEUNflT COSTS ..• 112,602,364 12,554,0SO .. .. IO .. .. so IO so• so• so 115,156,,H
Ill. MEI IIICOIIE Flltll CONOO SALES ·······•·····························• A. CC:.0 SAUS IEVEIII.IE 17 NIJIBER OF IIIITS IOLO & sETTlEI 0 J6 49 48 I D 0 0 a 18 AVERAGE. SIU PEI IMU (Sf) aa1 aa1 aa1 187 D •0 •0 0 0 • 19 AVERAGE SllllltG. PUC£ PER Sf 1165 11n 1171 1186 IO 10 ID so so ID• ..• S5,Z68,711D S7,J06,D42 17,591,ZQ IO IO 20 JOJAL CONDO SALES U:VENUE so so S1,J17,0J6 so ID so ID .. ll1 11490,1U .. PAIICING SPACE SALES IEVEIIUE 21 IUN8£t SPACES SOLO & SEULEO 0 0 J6 48 48 a 0 D 0 0 0 22 SELLING PRICE PEI SPACE 117,000 117,680 111,317 119,123 so ..• ID ID so ID so• 2J IOfAL PARrlllG SPACE REI/Eld ID IO 1612,000 18'8,6'0 SW,586 1152,982 so IO so so ID IO .. ll,496,20!_ c. WES EXPENSES 24 SALES COMMISSIONS so so S205,127 IZIS,414 1296,830 151,451 .. ID IO .. IO 1139,SZZ 0 0 117,616 163,1194 .. ZS CLOSING COSTS TO SELLER 169,617 29,,oo 0 .. 0 0 0 0 0 0 ,19,n1 26 END LOAN CCMII lMENJ FEES 0 70,569 97,856 101,770 17,6'0 0 0 0 0 0 0 287,1]6 27 tDIAL SALES EXPENSES so• so IJ9',012 IS'6,J6' 1561,211 191,491 IO IO ID ID so • 11,607,0BS ...... Sl:lMC£1 GA/PARJll£RS IICCJIPalATED, MARCH 1917. IDSI"" PIIIIPHIIU - 24 RESIDENTIAL CONDCIHMIIIIS UASHINGlON, D.t. WI FLOW ANALYSIS 1987-1999 UN tlllRENI IIOLLMSI
1917 1981 1989 1990 1991 1992 1993 1994 1995 1996 1997 1991 1999 IOIAI. D. IET INCOME HOM SALES 28 IOTAl CONDO SALES REVEii.iE IO so SS,268,71D 17.JD6,042 $7,591,213 S1,Jl7,0J6 IO IO IO IO IO IO IO 121.490,141 29 TOTAL PIIIKING SPACE SALIS 1EWJ1JE a a 612,GOO Mll,640 ISZ,586 152,hl a a 0 a a a 2,496,207 JO LESS: SALES EXPENSES 0 0 39',0IZ 546,JM 561,211 91,491 0 0 a 0 0 0 •0 1,607,085 31 NU INC FRCII C0NOO AND &IG. SPACE SMES IO so 15,486,761 S7,609,J11 '7,912,651 '1,371,526 so IO so IIO IO so IO '22,379,262 ...... IV. FINANCING A, CONSJROCHOII flNANCING 32 BEG.INNING BALANCE SO SIS, 169,470 Sll,536,937 S4,N6,9'3 so so so so so so so so .. 0 0 JS CONSTRUCTION LOM DIAVS 0 12,602,364 2,554,050 D 0 a 0 0 0 0 0 15,156,414 ,, INTIERESl DUE 0 567,106 1,300,185 1,DJ8,J24 447,0ZS 0 0 0 0 0 0 0 0 J,JSZ,640 J5 1NtfRES1 PAID 0 0 (1,JOO, 1851 11,0:la,J24) C447,02S) 0 0 0 0 0 0 0 (2, 785,5-:!4) JS PRINCIPAL PA'fMENTS D 0 (4,186,513) (6,569,994) (4,966,943) 0 0 • a 0 0 0 0 us,ns,520> J6 NORTGAGE REPATIIHT a a o o 0 0 • a 0 0 0 0 0 37 ENDING BALANCE •0 1J, 169,470 11,SJ6,937 4,N6,943 0 0 • 0 D D 0 0 JI IIET FRCIN CONSTIUCtlCII flllAICIIG so $12,602,364 CIZ,932,718> (S7,6Da,JIIIIS5,41J,t6111 so• so so• IO so so IO SO_ CSJ,352,6401
v. IIET CASH FlOW IEFDIE TAXES 0 I ---·-·························---·····A, NU CASH fl.CII IEfOIE TAXl!S N 39 l01Al D[VEI.GPMENI COSTS IO Cl12.W,JM>CS2,554,l50) so so so .. so so so so SO CS1S, 156,&141 0 .. CONSTRUCTION LOAN DIAUS 0 12,602,364 2,554,D50 0 a 0 0 0 I D D 0 15,156,414 ••41 IEI IIIC HCII CGNDD AND GIi. IPACI Ill.El 0 I 5,&16,761 7,611.311 7,912.651 1,m.w 0 D 0 D 0 0 I 22,379,262 42 llltEIESt PAID 0 0 (1,J00, 115) U,DJl,3241 C447,0ZSI 0 0 0 0 D 0 I C2,1H,SJ4> 43 PRINCIPAi. PATIIEITI D I (4, 116,5113) (6,569.994) (4,966,MJJ •D 0 D 0 0 0 0 • us,m,,zo, 1101:TGAGE IEPAYNENT 0 I 0 0 0 0 0 D 0 D I 0 "45 UND COSY (7,996,929) 0 0 D 0 0 D 0 • 0 D • 0 C7,9N,9Z9) 46 PROJECI CASI fUM HfORf IDES CS7, 996, 9291 .. so so 12,,•• m 11,371,S26 .. IO so• so IO so• so Cl',126.720) 47 UltERNAL RATE Of RETURN IHORE lAXEI •IS.JI
IOJRCE; WPARTIIIOS IMCORPCaATRt, IIIICN 1917. EXHIBIT 2
ASSESSMENT RECORD CARD FOR SQUARE 24, LOT 110 FINANCE OFFICE-Property Tax Division ASSESSMENT RECORD CARD WASHINGTON D 0 ' . SQUARE 2.':\ LOT \\0 "° -\- -1. 9.11 ... 7, 11z. I Q.C.. , .. --·\. ,.,,_,, ,_,_oc.. _ ... ADDREssZc«,o 121 ~ ... .'-.T' tt.\t.u "R'll'i.:::! t::, IA '!'VP~ ? \ IR N~ 4 lf~ .\'T'TNT~ 19. 111l N ·• ,Ni-;., TN1i1/'\'D rn r.A'DAr.:li' w n " '" " s,Ana " J
Ae!J. IMPS. ..2bt!o-SC, IMPS. I I '· ·9, 71s;L'lf. 'I_ ,t.,. AND LAND LAND ,, TTTT .TIT'IITI': • ., ;-- v.u..s. 1i,,,.,..,, • 'f,l,.._ ., "· .,,.,'/_' r 'H.,,.-tk.J."l'r._·,.r1· IJ.I/ FA£ t,,.,() (/b.4,F/IR,e,,11; ~.~ Fl9f'l;.ol) IS.Sr,,ml:;ltj /,,tl.S- eor't~ 1· ,o °'"d r- /1,tAJ • 'o-
0024 0110 I SQUARE SUFFIX LOT I 10 6452 I NBHD CODE USE CODE CR TX 24534 ZONE 1T AREA r:v. 88 ASSESSMENT TOTAL 9,736. OOQ J, Ii 4, & Lg IMPS. s; f!9, 09:,._ LAND S 715 EfE .2.JI, .. 396.60 ST. RATE ADJ. RATE · ,n 1.h ... l'l,. m;i;::z;;-~ 1/2tj¥1 T.Y. 88 REVISION IT.Y. 89 PROPOSED ! TOTAL _'~, ~/C, 1 .t"oo I I IMPS. I ! LAND .fil#,0-0 .,,,1. {j(J l ST, RATE ADJ.RATE EXHIBIT 3
EXCERPT FROM
ECONOMIC ANALYSIS, EXHIBIT B TO BOSTON PROPERTIES'
PRE-HEARING SUBMISSION OF JULY 16, 1987
(EXHIBIT NO. 29 OF CASE RECORD) (tJblel PROFORMA FINANCIAL ANALYSIS -- HIGH-RISE RENTAL HOUSING PROGRAM SQUARE 2/J - WEST
Per Unit Project Rental ,, Development Costs I. Land.LI / $ 6,771,338 $ 48,367 2. Building£ 13,153,358 93,953 3. So ft Costs, Except Financing - I3%'J./ I, 709,937 12,214 4. Interim Finoncinn4/- 2,415,903 17,256 TOTAL $ 24,050,536 $ 171,790 Stnbilized Income 1. Gross Income ($1.30 Per N.S.F. "· Per Month, Plus Parking)~/ 2,035,903 14,542 2. Vacancy Allowance - 2% 40,718 291 J. Effective Income/ 1,995, 185 14,251 4. Operating Costs§. 448,000 3,200 S. · Net Operating Income 1,547,185 11,051 6. Debt Service/BO%) Mortgage at 10.25%2 1,307.759 9,341 7. Net Cash Flow s 239,426 S I, 710 111. -s,,pportable Costs/Eguity 1. Cost to Develop $ 24,050,536 $ 171,790 2. Supportable Mortgage 12,075,590 86,254 3. Supportable Equity - Cash-on-Cash - 8% 2,992,825 21,377 11. Excess/(Shortfall) ( 8, 982, 121) (64,159) s. Excess/(Shortfall) Without Land $ (2,210,783) $ (15,791)
tJ l]nsed on 24,533.8 square feet at a 6 F.A.R. x $25.00/F.A.R. foot, escalated at I pc,rcent per month, non-compounded to July 1988. 'I/ Condominium development costs on the some site at $12,770,250, including - ubove and below grade coristru·ction costs, based on Morch 1987 analysis, Page C l, escalated at 3.0 percent to account for a 6-month later start of construction. ll At 13 percent of hard costs, includes: architecture and engineering, points on construction loans, legal, overhead and marketing. It/ On $14,863,295 of hard and soft costs. Construction for 18 months and lease-up to one year at 11 percent, interest only on construction loan. 60 percent of hard ,md soft costs are expended in Year I and 40_ percent in Year 1.5. 'j/ NSF = 85%GSF. 147,203 x 85% = 125,122 N.S.F. x 1.30/month x 12 months= ~ 1,951,903 + 140 parking spaces at $SO/month x 12 months = $84,000. Total = :J2 ,035,903. [!/ At $3,200 per unit per year, not including electricity. J/ $12,075,590 mortgage. Debt service based on a 30-year amortization period. :;ourrt11 GA/Partners, July I 0, 1987. IiP-Sq.2 1• EXHIBIT 4
EXCERPT FROM FEBRUARY 1, 1988 STATEMENT OF SEIU LOCAL 525 (EXHIBIT NO. 75 OF CASE RECORD) Z.C. Cllt No. IHIN/16-IC mu Loni S25 Boston Pro111rt1tt' 3 llttt End DtvtloP1111tl FtbMllrY I. 1988 Attlchnnt !
CALCUUTION OF IIAXIIIIII COIIIERCIAL ANO RESIDENTIAL OEVELOPIIENT POTENTIAL UNDER IIATTER-Df·RIBHT !Oll!NG (ASSUMING NO ZONE CHAHBE ON SQIJARE 35)
111.1 ... 111.1 .. ,... . C-Cfll Squirt Property 111.1.,. floor Oratt 111d lot l001t11111 Zonlno tot1l FAR Lot 11rt .... flaor ,,.. .. ------·------·------24/111 Uth Ind N CR 6.0 2s,m 152,312 71,191 24/110 25th Ind N CR 6.0 24,533 1'7,191 73,591 35/102 231'11 Ind N R-5-8 1.8 21,460 U,021 0
Total (3 proptrtltt) c-cf•l grffl floor 1rn Ptta1tttd undlr Htttr-of-rf9ht ronfng, m,m Total (3 pro111rt1•) rttfdtntlal 9ro•1 floor a,11 ptr• lttld undtr 11ttor·of·r19ht roning, 193,811 l.C. C110 Na. IHIM/16-tC SEJU Local 525 lloltan PrDIIIJ't1n' 3 Nest End Oevelop1111nt1 F1bru1ry t , 1988 AttlCilllnt II
CALCULATION OF ADDITION COMERCIAL SPACE REALIZED OR PROPOSED O'IER IIHAT IS PERIIITTED AS A IIATTER OF RIGHT
PROPOSED DEm.OPNBIT (SCEMAR!O It I
C-rc1•1 C-rc1al Rtl1d•nt1al gra•I gran gra11 Sqvart P,-ty flaar 11'11 flaar •ro flaar ar11 Ind lat 1ac•t1an (1ctu1l) (pr-Id) (prDPDJed)
24/111 2'th Md N 152,312 24/110 25th Md N 121,m 0 35/102 23rd end N 0 88, !9C
Tat11 (3 Pl'OPll't1n) ...... 1,1 , .... flaar lrN propa•ed end ICtUll: 280,lU Tatel (3 prap1rt1n) rn1d.,t1a1 vra•• flaar arn prapa•ld 111d actual: 81,890
C-rc11l IPICI 1bove llttlHlf-r1ght dMlaplllllt: 130,954
ALTERNATIVE DE'IELOPIIE!IT PROPOSAL (SCENARIO 12)
C-rc11l C-rc11l R111d•nt11l gr011 grDII 9ross Squar• Propetoty tlaar arN flaar 1r11 floor area end lat 1-lan (1Ctu1l) (prapa•ld) (proposed)
24/111 21th and N 152,111 2'/110 25th Ind N tOl,522 0 31/I02 23rd Ind N 0 88,890
Total (I Pl'Dllll'till) -rci1l gra•1 flaar trN prc,po•ild and actual: 261,904 Total (I Pl'Otiel'tlN) l'flld.,tlal gra•t flaar 11'11 propa•ld and 1ctu1l: 88,890
112,114 t.c. C.N No. 81-11N/a&-1: SEJU Local 525 Boston ProP1rtl11' 3 W..t End lllveloP""l1tl February 1, 1981 Attachltnt Ill, Pav• 1
CALCULATION OF INCREASED PROFITS FR<»! ADDITIONAL COIINERCIAL SPACE PROPOSED (SCENARIO 11 -- INCREASE BASED ON DIFFERENCE BETNEEN PROPOSED AND MATTER-OF-RIGHT DEVELOPMENTS)
Pro lor11 Htlllllltlont:
Md1t1ana1 c0N11rclal gr011 floor area 130,951 P.._t1an rtnt1bl1 88' Mdlt1ontl r111tabl1 off1ct 1pac1 11s,m
Conatructlon coat Plf' ,quart foot $100 Ront ptr squirt foot 130 Oper1t1ng IXllflllll 111r 1qu1r1 foot 19 Vacency r1t1 101 Eacal1t1ng factor 1.51
Financing: lnt1r11t r•tt 11.00, Tira (l'flrs) 30 Conatl'llctlon loan '13,095,100 "-t (aonthly) ,120,011 Plyatnt (annual) 11,m,m
AMvtl Addlt1an1l C.1h Fl011 Pr0Jectlan1
Y11r 10 11 12 ti ,.
Inc- n,m,111 13,501,00 13,511,179 n.m,10, $3,1&9,331 u.m.m $3,790,231 $3,836,HO n.m.m $3,152,111 .,.012,205 11.m,m M,133,m $4,111,471
VtclfflCY lota sm.m uso,m 1356, 161 $351,510 1356,933 m2,m sm.m $313,194 S31t,m '315,291 sm,m SIDT,231 1'13,347 $41t,NI GrOII 1- 13,111,161 $3,158,131 '3,205,511 u.m.m u.m.m $3,351,934 $3,402,213 13,153,241 U,505,045 $3,557,120 13,110,IH 13,IH,1'1 $3,720,127 $1,ITS,HI
8par1tlnt...,._ s1,m,m $1,196,265 Sl,211,209 s1.m,m ,, ,250,908 $1,261,612 11,211.m S1,3ot,041 11,321,161 ,,.m.m u.m.m 11,n,,11, 11,m,111 ft,l30,2TI Not 1- f1,132,88t fl,961,m s1,m,m '2,021,172 '2,051,'81 $2,082,212 $2, 11J,4H $2,145,191 SZ,177,m '2,210,037 u,m,m iUfl,tH U,310,llt u,:ws,m lllbt nrv1ct ,,.uo.m 11,440,194 11,m,m $1,U0,114 s1,uo,m 11.uo,m 11,UO,UI 11,m,m 11,U0,114 ,,.m.m 11,110,m S1,4H,HI f1,UO,IN ,1,110,111 Add1t1CIIII 1 cHh flOI sm.m f521,!80 fSS0,101 1m.m mo.m 1641,m 1673,002 $704,101 sm.m sm.m '902,693 SUl,3'1 mo,414 1105, 151
Total tddlt1anal Cllh flOI, ,.... 1-20 '15,885,411 Total add1t1on1l cHh fl1111, ,..,. HO '21,342,915
Discount r1t1 II
Not Pl'lltnt v1lu1 of odd1t10M1 Cllh flCIII, years 1-20 $6,128,652 Nit prHtnt voluo of add1t1ona1 cash flDO, years 1-3D 17,936,111 t.C. CUii No. IT-1911/86-1: SEIU LDCI 1 525 lmtan Praplt'tfn' 3 111st End DIWll-tl Fobl'\lary 1, 1188 AtUChllnt 111, Plgt 2
15 11 1T 11 II 21 21 22 23 24 25 21 2? 28 H IC
tt,251,411 14,322.IN IMIT,111 14,152,125 14,111,m 14,517,515 ..,&51,321 14,121,113 14,TIT,DIS 14,119,021 14,142,0ST 15.011,111 $5,091,UD 15,1",ID2 15,245,319 $5,323,111
1425,NI tm,221 IUl,112 ..,S,293 1411,m 1451,152 14&5,133 1412,111 lnl,707 1,11,m 1414,208 $501,111 ISGl,143 1511, '80 ISZt.m 1532,'80 ll,H2,5H 13,HD,DSI 1s.N1,m 14,001,133 11.m,m 11,121,m 14,m,m 14,253,555 14,311,351 14,112,111 14,U!,151 14,514,519 14,512,217 14,&51,021 14,721,717 14,7'1,511 11,111,711 l1,'71,5DI 11,411,IGt tt,111,043 11,140,113 11,m,121 11,SIT,314 11,111,195 ,,.us,m $1,159,114 11,11(, 712 ll,T1D,OM 11,135,711 11.m.,s1 11,111,m 11,m,111
12,311,137 12,411,SSD 12.452,711 12,m,Ho 12,521,HI 12,514,131 12.m.,11 12,142,360 12,181,996 12,722,225 12,713,151 12.m.sos 12,141,572 '2,111,271 12.IH,m 12.171,511 ,, ..... ,.. $1,0D,4N 11,cco,ct• tt,UD,414 11,uo,m 11,440,414 11,440,CN 11,m,m l1,'4D,m 11.uo,u• ,1,uo,m 11,uo,m 11,44D,"4 11 ...0.m ll,440,4N 11.m,m 1141,343 lt71,051 11,012,304 11,0U,OII 11,DH,440 11,m,m 11,m,111 11,201,111 11.m,102 11,291,731 11,m,m 11,314,011 11,411,011 11,m,m 11,412,111 11,531,105 r.c. Can Ila. IMIII/BS-IC SEIU Lacal 525 1tottan i'Nlpwtl11' I IINt End Dlvll-tl Ftbrulry I, !NI Attac'-tt IV, Pitt 1
CALCULATION 01 IICAWEO PlOFlfS FD ADDITIIIIIAI. CIMERCIAL Sl'ACE PAOPCJS£D (SCEIIUIO t2 - IICWSE BASED ON DIFFERENCE BETIIEEII ALTEIIIIATIYE AND IIATTER-OF•RJ8HT DEVELilPNEIITSJ .,.,_ --1•• Aild1t1nl -1•1 ll'OII fl- - 112,m Pl'Gllll'tfa1-t1bl1 ,n Alllltttnl l'llltlblt off11H1 IPICI 11,IID
c.i•truett. oat 1111' ....,. faot 1180 111M: Pl' ltlUINI foot ... tlllll'ltlnt ....- 1111' IIIUINI foot ,, Ytnnov l'ttl 111 Elclllltfnt flCtal' 1.5'
Ff11111Cfnt1 Jntwatl'tltl II.DOI Ttrt1 (yM!'I) 31 c.i•tl'IICtfan lDM 111,111,111 Paw-it (NlthlyJ $102,771 "-'tl-ll fl,233,25' an.I AINtttwl CNII Fl• P,oJattn ,. "" " " 11 11 ,_ t2,Ht,IID .,, .... n, fl,MUTD $1,895,IH u,m,u• 13,111,551 $3,231,IH f3,HU30 t3,H(,2N u.m.m u.m,110 u.,11.m u.n1.1n tl,111,111 Vll!llllflNI 1211,Hl 1111.m UN,12T IHl,581 1m,m 1111,151 ,m.an UU,IH 1m.uo PIMH ...... IMl,110 mun .... 1_ '2,IH,121 ,2.,11.,11 f2,TU,M3 t2,Tt5,SOI 12,127,211 t2,lt9,100 '2,112,TH 12,151,m u,ooo,m U,DtS,TH 11,011,m $1,137,IM u.,u.122 u.212,111'"'·"' -lltflt_,_ .... 11,001.m 11,Ht, 111 11,131.SH 11,055, tn 11,nuu 11,017,00I ,,.101,313 11,111,112 fl, 131,110 tt,111,flO ,,.m,011 ,,. 111,111 ,, ....111 11,224,501 . t1,HU03 fl,171,lff fl,TIN,111 $1,731,111 ,,.,11.m ,,.112,112. ,,.eo,,m 11,IH,57' 11,m,121 ,,.112,111 ,,.120,,11 ,, ... ,..... 91,ITl,512 ,uu.111 Olbtnl'rial 11,233,25' 11,213,UI ,1.m,2u ,,.211.ffl t1.m,2u 11,m,ffl fl.211,254 11,233,251 f1,2H,25t 11,211,25' $1,233,251 tt,HUN $1,213,ffl 11,233,254 Adllftt11111I Cllh fl1111 tUl,511 ..... 371 '471,515 1m,m 1523,093 m,.m fSTI, !Tl IIDJ,120 1131,llt 1151,131 HIT,212 t711,0II tm.m '"'·"' Tot1l lddltfanel cuh fl1111, 'VNl'I 1-2D '13,&DD,025 Total ld Dl•count rttl 9' Nit pJ'll•nt Ylhll of lddlt1ana1 enh flow, years 1-20 ss.soa.m Nit Pl'll•t v1l1H1 of add1t1ona1 c11h flow, years 1-30 Si,194,62'. r.c. c11, No. n-1~1&-1c SEJU Lou! 525 Balton Praportfn' 3 Nat End Dive lap11111t1 ftbruery 1, 1988 Attac:i...nt IV, Pao• 2 15 fl n 11 11 20 21 22 23 24 25 21 2T 21 29 30 U,145,762 u.m.m ,,.m.m $3,812,295 $3,119,471 u,m,m $3,916,131 14,046,231 14,106,124 14, IH,521 14,231,056 ,,.2u,s22 9',351,H0 9','24,324 9',410,611 tc,m,oct S3H,5TI sm,m ms.s11 $391,229 tm,m tm,m $398,143 $404,623 t41D.692 1416,853 $423,101 sm,m tm.m $442,02 fUl,089 tm,m u.211.m $3,HD,m $3,310,360 $3,431,065 ,,.m,m t3,m, m $3,587,711 13,641,&0I 13,696,232 13,751,115 U,807,951 $3,965,070 $3,123,045 '3,111,112 SC,IM1,120 fC,!02,2" t1,m,m $1,211,511 t1,m,u1 $1,299,646 tt,319,141 $1,331,921 t1,m,012 t1,m.m $1,400,088 $1,421,089 ,1.m,m t1,m,m $1,411,002 11,501,292 11,m.m ,1.m,m '2,011,313 u.011.m U,DH,121 ,2. 131,411 U,163,311 $2,195,UZ 12.221,m 12,m,211 12,291,lU $2,330,58& 12,315,515 '2,.al.D28 s2,m,m '2,'13,519 '2,510,703 $2,511,3H ,1.m,m s1,m.m ,1.m,m t1,m,m 11,233,251 11,233,254 s1,m,m s1,m,m 11,233,254 $1,233,251 11,m,m 11,m,m $1,233,254 11.m,m s1,m,m s1,m,m HH,DH sus,m tm,m tm,1&s mo,m $962,511 1195,525 $1,028,151 11,062,HO 11,097,332 11,132,291 f1,1&T,7TI tt,203,TIO U,240,m tt,m,ut 91,315,110 EXHIBIT 5 EXCERPT FROM FINANCING ANALYSIS, APPENDIX N OF "PREHEARING STATEMENT IN SUPPORT OF THE APPLICATION OF BOSTON PROPERTIES" OF MAY 23, 1986, EXHIBIT NO. 22 OF CASE NO. 86-lC l!GSTON PROl>tRIIC5 SQlV.lf: B:l 1!31)1 N \lllHI, N W. WA!,HIHCtM, O.C tASH fl OJ Al•~.\SIS 19o7 l'197 UM C:Uf;ftftll IXUAD!'I) CDl:P,'ll. A55UIPTIOUS CFFICE Pll().R/,11 IUIIElTIAI. POOGl!/11\ lANll NT.A ISFI 24,-wl t,0011( cr.. oc l £Xll ru.n 1987 1988 1999 19'10 19'1I 1992 1'193 1'194 lffl 1996 ::]!_7_ Im! TO!o"t. I. LANO cosr ILANOlll\l.1£ 14,190,1141! II IIEVl"LOPICNT COSTS-ffrtCE A. I.AolO ll£UEllll'l'£NT COi TS NiD IIAAD ClffillU:llON C0,15 2 NJOaE GRADE 13,161,!13 ll,:137,Cl7 10 10 ,o H •o IO 10 10 10 ,o t4,11e,e:2 a IIEL.IM CR,;0£ 41-4,f.t2i 233,719 0 0 0 0 0 0 0 0 708,240 4 1011,1. 11/11\il COIISTIU:TION 13,63~,736 U,790,lal. 10 10 H 10• 10 • en.ts '° '° 10 10 10 t),'l.!4,412 .. srn cosn i t«JlJTCCUIW. 11110 r,.;IIUAIHC FCi:S 1163,4,lO IC0,4110 10 10 10 ,o 1G 10 IO IO 10 10 tl43,880 fl~INC IINO.UOCS PlllNlli I FlE51 21',6-i--t 10&,0M 0 0 0 0 0 0 0 0 0 0 lllJ,648 1 l~ Ill. lf:\!EIKS,«FICE A, OFFICE SPACE OCOll'AIICY 14 llFFICE 51>,\CE I - 10 YFAA 20,000 211,000 20,000 20,aoo 20,000 20,000 20,809 20,000 20,000 ?.0,000 l!G,000 17 orr1cr SP/ICE 2 - 10 t£M 0 20,37~ 20,am 20,37~ l/0,DI~ 20.ar.. 20,37$ 20,3)3 20,an £0,31'5 20,81~ 18 WtC/m Sl'i£f 22.~ 2.1~~ 2,1e~ 2.t;?l 2,12:1 2,ll!l 2,1~ 2,12S 2.1z. 2,l2l 2,123 OFFICE AOIT PER ~WIE FOOT •• 19 ll'FICE 51¥1CE - FAC£. RATE 10 132.00 132.8!, 133 62 134.4" 133.32 136.21 137 .ll IJ13.04 ll!ll.99 13'1.96 l'I0.76 C. IFFICE IO sellOCE. CA/Pf~!"iltlrJ~5. MY 1936. llOSTOll PP0.0 (QI 1£5 S~\RE 3~ zao; ff STR JV. OP£RATJNC OPDiSE5-{fFIC£ A. GP£AATJHG El D. NET OPERATINC Dl>fHSES-IJ.rlCE 38 111-{lll,TJNG 11.KIIS(S-(JffJCl 10 1119,873 t33C,&98 1347,146 13~5.1145 1364,741 1373,840 13113,28' t:192,786 1401,60& t'l?0,&71 1430,'llll n.,~.,o 89 LESS. A£COUEA1£5 0 14,0001 112,2111 120,1611 129,4!i71 138,3101 147 ,5061 1:1.1,8101 1&6,4691 f":li;,)'IYI 144,0111 131&,l&:.I 40 IU Cl-'EAATINC EXl'EH5(5 lO• 1119,87~ 1934,6~8 1334,68'1 ,ar.,oa• 133:l,fOl t935,4'10 t3",700 1m,,u 1334,137 ta6-4, ..'J2 1386,911 13.~~3.7:IO o:I wI u. NET OflEAATING lt«:rJIIE-IFFICE A. If.I 1111£MTINli IIOK 18 tl2,580 11,094,4.!5 11,:187,127 11,709,l&3 115,011,018 41 llft'flf.£5-0-flCE 11 1 11 11 -42 LESS.NCI Ol'EAATINC EXP£J&S-IFFICE a 1119,3751 1334,49al 1:0.J:~s:. ui~::i1 ' 1:t:~, 1:Jt:~, •·,:::~:, •~.9161 ••1~::r::1 1:tt:::1 lail&,9111 13,~3. ~I 43 IU lnllAllHG INlllHE·a'FICE. 10 IUll&,0731 '699,727 11,061,900 11,llll?,175 U,1311,1121 11,tn,1,1 '1,212,111 11,2:.1.212 ll,2'/G,669 11,803,203 11,3'.'2,2~1 111,4:17,260 Ul. RATE Cf' 1£1UlllMJ''flr£ fin'. loNll ll.£All IUUM "·4'I fll:E MO Cl.EA~ IUUIJI D 001 -I .561 10.20, J~ :i&I u.en u.:an 11.IH 11.,11 l8.23t 18.811 18.991 19.211 SlllllCE. CA/P,,11ll£D.5, HAY 1'186. 60:> TOH £)00,1'{ rinr!l SQ~IME 3~ .i::301 N SHiZ.El. HI.. ~A'>Ull:t.... rON, 0 C CA~H flC,, AH,'<1.'/'ilS 1987-1907 llN CUJ,AUH L'iJH.J.JlSI El(!T l'EA.1 ll'll7 l'188 1969 1990 1991 1992 1993 1994 19'15 l'1'16 inr 1998 1011"- Ull. CHELC~T cosr:,-<:Olil)(J C. TOTAL oc•JEL0,o:-rnr co.rs - cnlOO :14 lOTN.. Hf\fE:l CTETS 13,631 .~37 GI, 788,603 10 ,o JO JO to ,o fO 10 ,o !f-0. 1~,4?0,011 57 lOtr-1:L !tWl co:,15 809,015 730,217 0 0 0 0 0 0 0 0 0 : .~39 ,2J2 :.s 101/ll O.:Vu.lll"tfHT COSTS 54,440,li.."3 12,~18,020 10 ,o 10 10 10 ,o ,o !O ,o .o 14,9'9 ,2-0 t,:I I .i:- VIII. l£T !!ffl1E Fl:01 m,oo SALES CCkOO ~ ES r.rca.A.1£ "·~? WalCR OF lt-tll!i ¼l.O ' satuo i'i eq 0 0 0 0 0 0 0 0 0 &O ll'iEI%£ Ill£ P£P U> W/~'11IJHGIOU 1 r, C. CN.i.H fl tl!J I.Nill Y~IS t90H9'11 ( Bl (lJ(Ukl-H 001.. l.MS I [XlT Yl/.!l 1907 1'10? 1~?0 l'l'il 19'M 11"1& 19'11 1998 lO!Al IX. F!IWClt.G A ro;rnu::non f!twlCl NC 1a KGIN~I~ B.11.A/U Iv 19 ,030,!>3? 110 ,OO'i,e/.5 IC 10 10 ID 10 ,o 10 10 7 ~ IU\/,lHII.: MLAICE 0 0 D 0 D 0 '°0 0 0 0 0 0 n Pelfl:!PIIL DMl!i 9,03:l,l:J9 4,71!3,~1,.r, 0 0 0 0 0 D 0 0 0 0 13,022,103 71, PAIHCIPAL 11:IXJCT!ONS 0 I) U0,004,2~51 0 D 0 Q 0 0 0 Q 0 I I0,00~.2!51 n JNT(R(5.T p.;m 1'197, 1201 11,2~7 ,,ml D 0 D 0 0 0 o· 0 0 0 11,7~4,4'.l~I 78 EHi)!I;{; lll\l..NU 9,000,539 10 ,004,2"5 0 0 0 0 0 0 D 0 0 0 19,0·?.,60! 7i IU BlOtt CON~HlOCTIClN FIHo\HCIII; IB,l41,411 la,:126,22? 110,004,21..11 10 ID 10 10 10 10 to ,o 10 12,003,383 8. P(R/W£JIT flW.W:lf/f. - IFFICE a.DG. 80 OCCIININ'; s,>;.AIU ,o 10 to 19,224,054 $9,1::.&,!24 17,001,740 19,D00,!!?0 10,911,IOa 18 •813 , 4'tl 18,70&,~0) ,a.~,408 10,4£1,10,1 91 LD,"n ~.o::n:os. 0 0 9,206,090 0 0 0 D 0 0 0 0 0 9,2110,090 82 lh'T[l.£5T pj;!O Q 0 1Ct2, 1791 1076,2fl5I 1869 ,8'.12) 18&!, Tb~I Hl~,0281 IQ'l6,5~jl !8a7,2771 1821,1181 tffl~,9941 1803,B!JI IG,~H,8441 83 C:RIF(IM... M:lX.CTlct~S 0 0 lo?,0311 (£7 ,93Gl 174,30.1) t61,~JOI li"l,1871 197,6601 1106,9381 1117 ,0~iJ !ii.:8,~iJ 1140,4021 (?b!l.5061 84 [!-101!£. BU.NU 0 0 9,C2-~.0S4 9,156,12.q 9 ,OBl,H~ 9,000,2'10 8,911,103 8,813,W B,706,~0) B,~.408 O,'lol,18& 8,,c0,104 6, r.:orc,a fiCPl\\'l'iZNT 0 0 0 0 0 D 0 0 0 0 0 18,320,18'1 IB,3'10,711-11 86. NET n01· J1:RfW..£Ni fllb\'-!ClMG so so in,a-11,01:-. lt944,i::1j) 11944,2151 U944,21~l t $?44,2151 U9~,2lll U,944.21)1 0944,21~1 U944,Zl~l 19 .26-1,9991 18.~16.8441 j x. CONOOli!Nll!H ;:m UYM 1 A. El,O LOI\~ FEES 1 81 W'J~Ht'D{l ftli 90 $0 co 10 10 10 10 XI. •l:T nr,,-, FllWIClllC ~. ~T fg'.):l F!IW,Cl!iC BB ~T an~ cr.»tJT'"OCTir~1 F 'H¥;HClt-K: 19,'.>'11,,19 13,:12&,W II0,004,26:11 Z,Q ,o 10 10 10 ,o M SO 1D t:2,0.U,383 £9 P:t::..",~,.;eH FIN. PRr::--:-rrns - nrt. St.CK;. 0 0 9,?r,;,090 0 0 0 0 a 0 0 0 19,264,9\l'JI 21,t91 90 Atpt,,![D CO!·ia10. SNt f.t;Y.XU0,5, 0 0 707,939 91 ~T f:~)!l l:l '.iJ lC-'•jl ffi:S 0 1911,2311 0 0 0 0 0 0 0 0 0 198 ,i'341 92 };'.:.T HiJH fm;,_'.;CIW. t8,5,41,419 ,a.112, 1 914 cuo,~a~l 10 gQ iO • O 10 &O 60 119,2M,9'1'11 2,!9',2.'.ll XII. ICT ('N,H f'l.C,I A. ~T Ct6H ru,-, ~3 ;:::-i CPf.P.1TH~ It-1'.'1}'':t filD:1 U:-FICE so Ul06,6751 '699,127 ll ,0&7,900 U,tOt!,11, tl,100,521 11,17!1,IU tl,eJ2,717 ~1.2~1.212 U ,290, /,1{: 9 $1,003,203 11,3n,c:=.1 ,11,JllT,2:&0 ?4 LES. ocer SE~VlC:: 0 0 tt944,2l:")I lt944,211) l 69~!,2151 1044,21'.il 1194-1,21~1 U9~'1 •.:!l!')1 lt944,2151 119·14,2151 U-9-44 12l~J 09,1'i,2l~l U9 ,'"2,1~1 t 9:i lll:T c~,u fw, mm: 0 u1oi.,an1 112~4,<1C!ll $123,bBl 11:-,0,SM u,11,ar.& 12:10,'1"16 1Wl,l02 1306,997 IJ.116,4'.14 '358,ml 13·10,036 96 TI:lilmll. UtiJJC (Hi£:£ 0 Q 0 0 0 0 0 0 0 0 Q 14,250,930 14,E~~.9'.lO 97 ~, Hr.Qt£ rm,1 COIJC-0 5AL£S 0 0 a,210,3l,2 0 0 0 0 0 0 0 0 0 a.~,o.3t..? ,;a rP-l-£CT Ff. T &VENUE 0 ltt0.6,8751 13,0t::'>,N.._4 1123,Wj n:.S,~60 1194,SO& $230. 94b 121.G,502 1306,9'17 $346,'M •~.900 11114/lZ8,9M 117 .~"ll ,?92 ?9 LESS.. r.,rn•FiiU!Cll~ rnn:KGST PMO lit?7,t20lU,2!.i7 1 33.:iJ 0 0 0 0 0 0 0 0 0 0 II, 7:,~,4)~1 I.CO USS .LlvlD COST t~.B'I0,3'121 0 0 0 Q 0 0 0 0 0 0 0 t'i,3"10,J.t:1 101 P~.Ci CA5.H fl.OU B-~.ror,r TAXES IS·i,!117 ,4&1) lU,aM,21UI !SJ,Oi.~3.874 U2'.l,/.O, 11:iS,~60 U94,306 12:J.1,9"16 t268,!':I02 1306,'1'17 t3'U,4'4 t3..'\0,%'0 t14,623,96b tl1,376, 1i"1!1 102 1LT ~nEsrnr W-ii!£ rsnc;:_: iii HJ .P£.x:£Nt 11130,1031 1 t,3 INT£:-%'>!. A.'\TE. Cf" ~!E fl..:~""l [j 31 liOSlllll PillPERJIE'i Si!"J,;,E !I:. 2301 ll STIIEiT, H ~- 111\SHIN!.IOH, 0 C. Cl,Sil FI.OI ,...__lSHi 11117-lffl UN ruuar llO.Ulll5 I COlEIW. MSllii>TIOHS IFflCEPillGIM IES!t'£11Tlli. P~l>\II l.Alw NEIi ISFI 24,.W. All(l;!£ CAAC£ &ulLDlh& A~ lc;(]55 5fl Afl01r. CllAOC WILDl>t. NO ISFI 98,00Q UNO N£A IFAA FE£TI 99,201 lla(l,I CRI« l!UlLOll&: NO ISFI llatM C.~ 9.JILOl!G N£A CSfl 9,64Q A'iSICliEO LANO w.1.1.E SU FAA FOOT IN 7/1181 125 ETTICIOC'( MllO EFF!Clt..c-1 A/.110 83 II\ MlW. E5CtUtrICtl 11/.TE UPI ~01 12.00I IU IE~T;a.£ AAEA ISfl 1£T CUIWlllli. f«A ISf I 3l,!181 N1JJ.. f,MD£ COil PER SF ~SIIU:TIOM fllW«:IllG IEltM GIii« CGST 111':R Sf AllOUE CA/a: CllST PER ClffiS 5f 1110.98 INTlli:ST RATE II.IOI IIJH.G!!I; ST- TC-I FINISH AlllMW:E 15fl !CLIM C!WI£ CO'i T POI Sf 112 .00 i\OClj{ ll.OC STO IEIWIT flWl,;i AU.ow;;a: ISfl k!JNTS l GOI uu:;.;,:,y A.If TOTH. IUll'ER IF I.HITS 31 -~tPERY #J~J•1~:;E .!illi lH Y:- 1019 l'WW£HTFTH!-11:II&: ~!Ei.1E,C,,U,TO. AVE!l/a PRICE PER 5f llt.!> INrr.llEST 11/.TE 9 :.Ol OP.AATII£ DPa;X:S lli:R 5fl00:UPIEOI LIW1l£rfllN1£MS 30 IR:AArtllG EXl>EH!'.E IIEll sr1v-.11 IIJ111ER IF l,AA,Y,E 5H£ES 0 rA.RAll!C OP£NSE E5CJU.Tllll ~Ale£ PER SPl'a: 10 CAPITH.llATlllH RATE: lfJHfflCE 9.:.01 IUIIICR IF G,;IW;E 51':..ES CAPIT.-UZAUOO PATE. IESllllo'L 9.0GS o1ttllAL 11£111 PE~ 511,;Cl: IU IF DP0,'5£ AffU'L PlllCE £5Cli.ATOll 4.001 CAA.a:IEMT£!.clUTOil II.HITS & 1W>.1ma; SIWl:51 ll05TI}; Pll'.l.£RTIES SQJME 3l 2301 H S!IUT, I II. W.Yl11£TOH, 0.C r.Asa ruM Mal.ms 1987-1<;97 IIH CllllSEl, T llO..U,RS I EXl1 '1£AA l'llll i'98 lffi lt'iO 1'1'11 19'12 lt'i3 1'1'14 lffl l'1'16 l'l'll 19'18 TOTH. I. I.Ml COST l LNtil Viii.I£ 14,3'10,K! - II. DEIIEl.lll'IEIT CDSJS-0:FICE A. IMO DEIIEUll'!OT COSTS H;Q IIAAD ~Tll.Clllill COSTS 2 -l,AAllli: 10 10 10 10 10 IO 10 10 ID 10 IO IO IO 3 IIEl.lM f;Al\0£ I 0 0 0 0 0 0 0 0 0 0 0 4 TOTH. IWlO comJU:nlll CllSlS IO 10 10 10 10• 10 Mi 10 10 IO 10 " ·~ .. SIFT COSTS s AIOU1£CTIJ;w. NII Ell:111::EAII«. rns 10 10 IO 10 ID 1D 10 ID fO 10 10 10 10 6 fltwell«. IIID.IJCES POINTS I FE£S I 0 0 0 0 0 0 0 0 0 0 0 1 11AAlC£11NC 0 0 •0 G 0 •0 a 0 0 0 0 0 0 8 CAAAYII«; COST 0 0 ·o 0 0 0 0 0 0 0 0 0 9 Ucit. 0 •0 0 0 0 0 0 D 0 0 0 0 IO Gol(ll£AO 0 0 0 0 0 0• a 0 0 0 0 0 0 ti ~U.TIIIG COST lllll!lf. ~ 0 0 0 0 0 0 0 0 0 0 0 0 0 12 IOT/L SIIF1 COSTS n IO 10 10 fO IO 10 ID ID ID IO IO 10 .t,I , c • TOTAL IIE.UEl.lll'l£IIT COSTS4'F1CE ..... 13 UNO DEV I HAAD CllNSTIU:TIIIN cons .. IQ IO IO IO to 10 10 10 10 IO IO IQ 14 SIIF1 COSTS 0 0 0 0 I D 0 0 0 0 0 0 0 15 TOTIII. IIE.\'il.llA'EIIT COST4'F1CE .. '° 10 10 10 tD '° 10 10 10 1G ID 10 Ill. AEVEIUS-IJTICE A. IFFIC£5POICEIJClll>;ttC1 16 unCE SM:£ 1 - II YEM 0 0 0 0 0 0 0 D 0 0 11 IFFICE SPlll:£ 2 - 10 ¥£Ali 0• 0 0 0 0 0 0 0 0 0 II VIICAHT SPACE • 0 0 0 0 D D 0 0 0 •0 I. IFFICE SENT !'Ell SIIUl,RE FOOT 19 IFflCE S1WX - f/U. MT£ 10 10 10 10 10 10 · 10 10 IG 10 IO ,o c. ITTICE AEIIT AEUOU:5 20 IFFlCE 51>,lC£ I IO 1G IO 10 IO IO ,o 10 ,o ,0 IO 10 ,o 21 !ff ICE Sl¥..CE 2 '° IO u IO . IO IO 10 to tO ID IO '° 10 WAGE AEHT AEUS. --t£T IF EXPO;.£, •22 NKEA IF SPo\ll:5 IENTEG 0 0 0 0 0 0 D 0 0 0 0 0 0 23 ~ AEHT l'O SP/ICE-1£T I 0 0 0 0 0 0 0 0 G 0 0 24 G/,11,"iE 1£11! IEVEIU.S-1£T 0 D •0 0 e 0 0 0 D 0 D 0 D E. AEl/£11£5 - IJFTCE el ur ICE A£JIT llEUEll.U ID 10 to IO 10 ,o 10 10 10 ID 10 IO 26 CAAAG€ AEH! lf:•0'-£5-if.T IO u 10 IO IO 10 tO IO u u'° fO u 10 '°10 10 ,o 10 10 10 10 10 IQ 27 IEVOU:5 - lf'flCE u '° " 5a$1CE. CAIPAAT,u;, Ml l'184. rosm, POO?E~TlEI SQ\Jj\<1£ 3:i 2301 " \TAUT, H.W. Ut\~HIOCT!ll, 0 C C~III F,N m;,tYSII 1937-1997 cJH =~r ro_u.r.11 LUI YEAA 1981 l'188 1989 JWO 1991 19'i! 1993 1'19• 1m 1991 1797 1<90 TOTH.. IV O<'i:AATIIG f',(llE!lSEl-{HICT A. OPEAATING EXP£-iS!:5 - (FF!CE KR SF 28 fl<£llATUG D'.:fH'i£5 PER 5/'IOCOJPJEOI 10 10 10 10 10 10 10 10 10 10 10 10 so 2'I DPfAAT!i£ EXPEhxl PrR SfiV;,c,,; 0 ll'T llPEIIA Tl 1G EXPOIIE5- I, V. IET Oll£MT!IG IICtV-l:- VI, llt\1£ IF 11:llRH'.fflCE A. Hff N-dl O.EAA IETI.m 44 FIU I.IQ lUAII IETUlfl 0 001 D.001 0.001 0. 001 0.001 0 001 0.001 D 001 0.001 0 OOl 0 llGl 0 001 O.D01 sru~. i;..;PAA1t£Vi, l!AY 1'186. liOSlOO H(l.UflES >QiW! ,:; 2301 N STIUf, H.W 11,;,ill,«.TDI<, DC. CASH n.o.,i .it-w..rs;s l,81-1997 IJN a;,K,lT OCU.,,.51 EXlT YEAA 1987 11'88 191!1 ma 1!91 19'12 1m 1'19~ J?'""f') lSi6 1"11 19'10 TOl!i_ VII. OC'-1.0P!Uff COIT5-crt0041Hllfl A. Ll,iO OC~ELOPhEH COSTS AND -.i etmrn..cnoo co111 "15 ~WVc t= 12,&la,O:i3 11,136,602 10 10 10 so 10 IG IQ 10 10 u 13,444,8~~ 46 IE.CIJ C c. TOTAL llE\laoP!f:NT COSTS - COOOO 5' TOTAL IV.Ro OJiTS li:,S35,2i7 11,17~,818 10 10 ,o 10 10 10 ID 10 so 10 13.~•4,0l~ 57 TOTH. ~.CfT COSTS 809,01!'.:I 1,a,211 0 0 Q 0 0 0 0 1,l3'l ,23c 511 TOTAL 0CVEI.Oft\L1T COSTS 13,1~~.2~3 u.90~ 1 035 10 ,o ,. ID 10• ID 10• u 10 10• I~ ,C1'1,297 ~II I. !ET llO»lE f~ ID'iOO SALES A. ro,oo s,.u s ,urn..t: ~9 IIJIBCQ Cf" l.tl!TS sao , 5ETTL£0 16 l!, 0 0 0 0 I 0 0 U! M'!:P.AG£ Ill£ PER l>HT 15fl IOll 1019 0 0 0 0• • 0 0 0 61 AVcr,;a lllill-«; PiilC£ f£R If 11~ 00 1171.60 0 D Q 0 •D D •0 0 1.2 TOTAL roIDO IAl..£1 IEVE.'U 10 12,1-89 ,479 12,~,2<2 IJ 10 IO H 10 10 10 IO• 10 -~.311,720 e. PAAkltll SP.U Sl . EXIT \EAA 1'>117 1'188 19'11 199"2 1993 19'14 199& 19'17 I l'ia TOT/.!. IX. FIIWCING A. ro;srnJcTICJi n1uv.:1NG flE.GlHHl~ tw.RlT. 10 $3,lH,2" 12,604,609 10 1G IG IG 10 10 10 IO 10 n 0 0 0 0 0 0 0 0 0 0 D 0 74 IE'AIHIIE Ill•- NU a 0 0 0 0 0 0 0 0 0 1:. PHHCI,AL ow,;\ 3,l'14,253 1,~0l,03:i 0 ,.w,.~01 f~IICl~ti. llU~Cl!l»i5 0 0 12,/,04,6091 0 0 0 0 0 0 0 0 0 12,60-1,C-Ci9J 76 117),6641 0 0 lwl,8<91 11 !HlH Xll. IET CA 1H FLIJI A. IU CAIH FUJ.I lfi:T Of'iJIAlll'- l!Clll!: Flllll Cf"rm: IQ IQ 1G n n 10 10 10 10 10 .IQ 10 10 93 IQ 10 10 10 q~ Lf\S. OC81 ¼J,vlC( 0 0 10 u H IQ $0 IO IO 0 10 IQ 10 10 10 I, I 0 95 1-E I CA\11 fl(J,I ll r!O: la 10 u ID 10 0 0 u 0 0 0 0 0 0 0 0 96 lE~JNA:... v;,Llli ti:rtrt . 0 a tu 1,r.:r-,l!: 1 1"11 rrrmo s:t.fi , 0 0 1,719_2~3 0 0 0 D 0 0 0 0 D 1,7l9,253 97 0 10 u, 719 ,c:,3' IO ,a ,o ,o ,o U,7l9,~S3 ~s H!(}.J:':CT I.fl l!i \i{~.(. •o .. 117;,!-341 1.i;,,1.u1 0 D 0 0 0 11.31,Bdl 99 tE,\ cr,1rnu1 i[,I 1Nl£1UT PAID a 0 '°0 G '°D (.;,3',U.3~1 0 0 0 D 0 0 0 0 0 0 14,~J?0,3-i..JJ 1 co L('.lS..l.hHD (J,~( 114,166,C•c~I 1Ui6, 14-11 11,719 ,2.l3 10• IQ ,o 10 10 ,o I, 10 UJ,802,9171 101 Jlf:O.,(CT f.l\',11 11 !4/ £,(TOR( TIVIS .. H:.1 tf:C ASSESSMENT RECORD CARD FOR SQUARE 24, LOT 111 ·/ ASSESSMENT ·REc°:~CARD WASHIN~ D C. ,- - ,?¢ 7 SQUARE LOT ,-'6 "-,:::'-56$ c96,3 A/ c/j1 ,(/'f. . , ./4/'f'"~ J'.3 , /, "/£/. ~ADDRESS o-.4,db lY %/4d; &ff/. .;.,._. :,, ,f,'o 'DAmY.Tc 1 ••vµs: !?~·n" "~ IR "'= ~•. ".1'-Tl?I\'IITJIIC. ! 12 .,,,.,. '"P'l'R ·u; ,i\,f'Jj~ TN~fYR lR r::!/\R/\nF. w n J.I l - "};' ,,.,..., ~,n_, -; ,... ·~ ' ·" . ·-.-, ~tl'\H.A f:i.'•·-~ fl t . . n~ta~hecl .,..,,,..,,... 1--1:, ...... 1.... ~ ·~·...::.-:n,r."Y ~,.M;,.,.....;.i~ ... -- 'B ~- Attached .ff?' A 111m Detached Semi-Detach0 "' Brick ·n-r or Hot Water 1 1-1'"-UT 1\rf.rirll4=l ~ ~nnn¥nTn Caroort Rnm .l?nrl ,... Steel 7 D Ran;ont 2 '"'"' - Z InBsmt. w•,o•n .x II__ .,_, ,,..,_;._I_ Uni+ Heater 3 Stn 4 :i H. X E>< IK W.A .I.~ nnn ..... Oil •·ro=n ,;...,.'f" t1·1.-...... coo Ii I !Metal l Block Stone Hand Fired '"" Floor 13 . PERMIT3Ul'I 2.d. ..:, . I !Frame! I I Stone ~ .;...,;~!'\.ort - I 1,.. 1,_f I !Brick I I ..,,....,."' U1n.nlJI' nn ~nn= A. FINI~M Como. /\na~tml'>n n, Ru· •·•/-?C;':' 0 ,;-, ·1-!. ?#..Q' f"----C-,""'~·'<,...,,ft-,.-....,..,.,.,.,..,..,.,.,.,,..,..,.,.,.,.,.,.,.,..,_,,.,...,.,..,..,/,..,~.;.,ft,,.,.,~.,;7,.,...,_.,..,..,~..,..,..-...... , .... ,, ------1 W.Wt,,, l.[tj ~ ,;' S- t 325 i tr'\.,,_1 r I. I 0 I I I I ~I 'f ~ f &i~;"'"' LI ___. _____..s~- _ /;"-;:>,~8 ~J 1F a,, _2-_:-_,·;z:::;c...-..:..·'.::4.-:"'..::.·zn-..:._ __~_-.,._:c._;-9 __ -'-'µ:,'-,,,_,,.;.;,_,.,,_,,s:_:A_dt_. '4-lfr.-'--,.,--''s.'-"-e_4;.._-+M_~~w.~i ~~;;r ·.. 0024 o 111 . 2,U Ul .fno/i!Jf!f- soUARE SUFFIX LOT . SOUJ.RE SUFFIX LOT : ..S -.3.:.._ -- f· .\b•i~ l , 2"'..S~,, /b./- : 7+, Z8Z , /t:.;; ~c'Z. : /,Jl(./3/.5 * (//. //__) T.Y. 88 REVISION . h.,iAe~s1~1" N ; T.Y. 89 PROPOSED F.Y.86 PROPOSED i>" :t'l..u jJ 1 /4-0;-~7.5/:J.!;Yt7 j,-;~~ : TOTAL J,;.i. 3\/7, 31,K) TOTAL ;v/t. 4 ..,.,,,, J ,;- - ' - • ' IMPS. .P-// J),2;3,;;_lJ: IMPS. LAND 170~ EXHIBIT 7 ARTICLES FROM THE WALL STREET JOURNAL, JULY 31, 1987, AND THE WASHINGTON POST, AUGUST 10, 1987, ON THE $80 MILLION SALE OF THE U.S. NEWS AND WORLD REPORT BUILDING ana m \..lLY ncu,. 1' ""...... J -·------.&v.-..,u -•-•-o- --- . doesn't dig but does analytical pieces in· stead," says Mark Jurkowitz, media critic' ,--_,;---_------r,_----:--1 ------:.the Boston Phoenix, a weekly newspa- 'U.8. 1'73ws_& World Report Headquarters For the moment, however, Affiliated's storyseemsatestamenttolong-tennfam- In Wasqi~ow·Is Sold to Japanese Firm Dy management And there doesn't appear --<:,__ I '\f ? .... _....;... ______1 to be the threat of family divisiveness or "' _ J... _,, impoverishment that bas caused feuds at Roe ' many such · operations and thrown them · ER LoWENSTEIN U.S. _News building is equivalent to about Sta//Reportno/Turr,WALLSTREE'rJOURNAL $480 a square foot. into the anns of acquiring chains. With half of Affiliated's stock in the Shuwa Corp. bought the Washington, The seller was Boston Properties, the bands of two trusts-and Mr. Taylor a D.C., headquarters building of U.S'. News development.company controlled by Morti• trustee of ea.ch-the company worries nwe & World Report magazine for about S80 mer Zuckerman, publisher of U.S. News. about quarterly earnings growth, restruc· _mlllion, according to Shuwa officials, eas- The previous record in Washington in- .., tur1ng or fending off raiders. "We think it's Uy setting a record price per square foot volved the ~e of the Olmstead building to _ been a good thing for the Jong~term health for an office building in the capital. a CJ'OUP -of British investors last year for - Sh Is l I h Id al $303 a squarj foot. of th e company to have concentrated own- • uwa a c ose Y e re estate con· The U.S. INews building sale, which _ ershtp," says Charles Taylor, an Affiliated cem based in Tokyo. Based on a total of closed earlier this month and hasn't been .. director and former provost of Yale Uni· 165,000 sq~ f£!!l. the price it paid for the publicly announced. continues a trend of T Cl high-priced purchases of Washington prop o, DL ·zz · T /' u DJ - A S! c_ 11,I,I fan C erty by Japanese investors. Japanese in· 04 ips• neusen i,u,ns cquisition,_ vestors also have been setting real estate 11 · k• rr k records in Los Angeles and ,New York.· B B k 1ua a .L a _"The Japanese are paymg top dollar," - ···,·. uy- ac , ing eover Harder said Larry Dendtler, a real estate official _ ...,______-' with Equitable Life Assurance Society of • By UDAYAN GUPTA , . ' The stock buy-~ck should give mem- the U.S. in Wasbington •. "Everyone thinks - si~JReportffo/THEWAU.S~Jou-AL hers of the Phillips family, Phillips-Van of them when they go to sell." - · · NEW YORK - Pblllips·Van Heusen Heusen officers and the employee pension Shuwa officials said that the U.S. News Corp. unveiled an acquisition plan and a fund control of over 60% of the company's building was attractive because the maga• stock ~-back that analysts said could stock, up from the 28% they currently own, .zine agreed, as part of the sale, to lease make the company less attractive as a said Elizabeth Armstrong of Johnson Red· it back for 25 years, with annual rent in· s . · takeover target. • book Service, a division of Prescott, Ball & creases. f ~- _The apparel company, which Is fighting Turben Inc., New York. "The buy-back Mr. Zuckennan conflnned that the · ; i a S22·a·share takeover bid b)l Rosewood and the Bass purchase, if successful, make partnersbip that owns the building was 1 : Financial Inc., said it will buy back 5.2 it hlghly unlikely that anyone else will sold to Shuwa. but he wouldn't comment on t -: million -shares of its common stock out· want to take over the company," Ms. Arm· the tenns. He said It would be misleading • ~ standing at S28 each, or a total of $145.6 strong said. .... to view the price independently from the : : mfllAt1cn:,;,..,A pri . _ · A spokesman for Rosewood declined to leaseback. Office properties generally are ~ • . . -wood's ce, Phillips~van Heu- • - valued more.. hJgbJy when they are leased .. sen has an mdicated value of ~ million, comment. · · · long~term. including the value of stock options. Phil· - Part of the ftnancmg for the transac· ·- . An indivtdual close to the sale said the · ·_ Ups-Van Heusen currenUy has about 15.l tions Will come from a $150 million sale of price •·wouldn't make sense to a U.S. in· Dt _. million common ou~ding after a stock senior notes and preferred stock to Pm· vestor." However, he said; "from the Jap- t . split last month. . - dential lnsurall_ce Co. of America, Newark, anese point of view. it couid be a very good cc ; .• Separately, the company agreed topur- N.J. ·. _ . mvestment." sc cllase the shoemaker G.H. Bass & Co. from Additional ftnancing for Phillips-Van The Japanese can outbid Americans for f.! . Unilever Group's Chesebrough-Pond's Inc. Heusen's. transactions will come from a real estate because of the strength of the :: j unit for $79 million. '{. ·· '.· · . -. · . $210 million credit line arranged through a yen compared with the dollar and because 1n ; • · Phillips Van-Heusen _said. it plans to consortium of five major New York banks. they are able to borrow at Jower interest g: ·;- cs,mplete its purchase of Bass by the end The company also said It received $30.G rates in Japan than m the U.S. ~ . -of August. It intends to S!!ll Bass's Texas~ million as part of the sale of its tailored In the U.S. capital, one of the country's s, • based retail ouUet, The Shoe Box, after the dothing unit, Joseph & Fetss Co., and four few hot real estate markets, office rents !: acquisition. specialty retail stores. are second to those m Manhattan. : In composite trading. on the New York · Shuwa bas been an aggressive buyer of E · Stock Exchange yesterday, Phillips-Van As prevfo_usly reported, earlier this property in the U.S., Including Arco Plaza r, . Heusen closed at $24.375 a share, am· month Rosewood offered S22 1 share for- in Lcls Angeles and the ABC building in t ~ changed, but.-refnabied above the S22·a· the approximately l!Oo/o of Phillips-Van New ·York. This is its first purchase m i"', sh bid Heusen It doesn't already own. But Phil· ashtn : are by Rosewood, a Dallas·based in· Ji V H ,t ,...a th 1-~ d said W gton. r, i vestment company controlled by the Caro- ps• an eusen re,ecLC\& e O ,er an · In April, Judiciary Center, whose main r, Une H U asked Shearson Lehman Brothers Inc., ! amt Trust. its investment banker• to study financial tenant Is the Department of Justice, was l i The transactions will provide the com• ~tematlves and report to the cQmpany. purchased by Kondobo U.S.A. Inc. and Na• t : pany's shareholders an "attractive finan- Yesterday's announcements are seen as an gisbima U.S.A. Inc., both owned by Japa• - cial package" and wUI help maintain their ib)y - -- nese parents. · ••continuing equity interest in the com- outcome poss arising ""111 the invest- That purchase, like Shuwa·s purchase pany," said Lawrence s. Phillips, Phillips ment b;mker's recommendations. of the u.s.- News building, wasn't formally . Van,Heusen chainnan.and chief executive .Pblllips Van-Heusen makes clothing un· announced. "The Japanese are very senst- officer. der brand names including Van Heusen ttve to the perception that they are buying and Cacharel. The brands of the recently the nation's capital," said Jon Minikes, a sold Joseph & Feiss unit include Cricke- managing director of Jones Lang Wootton, CORRECTIONS teer, Geoffrey Beene and Country a real estate broker and consultant. - & AMPLIFICATIONS Britches. The four retail units it sold were Mr. ZUckerman developed the U.S. Hamburger's, Kennedy's, Harris & Frank News building in 1983. His cost couldn't be THE U.S. LEAGUE OF SAVINGS IN· and Juster's. detennined. However, an individual close STITUTIONS objects to changes made in In a release, Mr. PhiUips said the com- to the sale said Mr. Zuckerman made "a pending banking legislation but won't urge pany's new business "will. be focused on substantial profit" on the building. lawmakers to defeat the legislation. A pre-. two principal product areas-men's and Mr. Zuckerman bought U.S. News mag• vious edition misstated the group's inten women's shirts and sweaters and men's azine, which he continues to own, ln 1984 ~ns. , and women's footwear." for $176.3 million. , • Interest in U.S. News Building Sold .,,, ,.,, ,, Shuwa Corp .• a Japant1e real es IJ,-,. addod dml the Parllllyauand,.6,buiJdinlhe tate canpany, Im purcbasell Ml. wt bad DOI: sold lhe buddin1, llut-y rather tw.eo2Jrdand2•dtooNSueet, disclao,,cl inlereol in the ..,..,.nhip halt 90ld. intueats ia the ~ISbip llec.tuseollht....i,..al tlut own, the U.S. - Ii W ,. ___ ., ... .,, __ ...... --...... •· ____ EXHIBIT 8 NEW YORK STATE ASSEMBLY STANDING COMMITTEE ON OVERSIGHT, ANALYSIS AND INVESTIGATION, "THE SALE OF THE NEW YORK COLISEUM: WAS THE PUBLIC INTEREST SERVED BY THE DEVELOPER SELECTION PROCESS?" THE SALE OF THE NEW YORK COLISEUM: Was The Public Interest Served By.. The Developer Selection Process? NEW YORK ST ATE ASSEMBLY STANDING COMMITTEE ON OVERSIGHT., ANALYSIS AND INVESTIGATION Stc,·en Sanders Chairman Stanle)· Fink Speaker of the Assemhl)· September 25. 1986 ASSEMBLY OVERSIGHT COMMITTEE Steven Sanders, Chairman Richard Brodsky Dennis Butler Cynthia Jenkins Gregory Becker, Ranking Minority Member Douglas Prescott Report prepared by: Steven Barry Kaufman, Senior Executive Assistant Elisa D. Seidman, Editorial Assistant Staff Barbara Brundage, Director John J. Bloss Burton Nusbacher Evelyn Lewis Grissel Sepulveda TABLE OF CONTENTS Critical Failures in the Process...... • • • • • • • • • • • • • • • • • • • • • •.• • • • • • • 1 Robert Selsam's llole••••••••••••·••·•·•··•••·••••••·••····•·••·••••· 1 Steven Polan's ActionS•••••••••·••••···••·•••••••·•·•··•·••·•·•···•••• 3 The Hiring of Robert Selsam. • • • • • •·• •• • • • • • •. • • • • •• •...... 5 Favored Treatment to Boston PropertieS•••••••••••••••••••••••••••••• 8 Opportunities to Rebid•••••••••••••••••••••••••••••••••••••••••••••• 9 Opportunities to Change ProposalS••••••••••••••••••••••••••••••••••• 10 Financial Analysis Not Done••••••••••••••• •• ••• •••• •.••••• •...... 12 Environmental Impact Ignored•• • • • • • • • • .• • • • •. • ~ • •. • • ••••••••••.• • • • • • • 12 The Community and Community Boards Ignored•·••••·•••••••••••••··•••· 14 Excerpt of Testimony of Community Bd. 5 Chairman Joe Rose •••• 15 Absence of Design Professional and the Performance of the Department of City Planning Assessed ••••••••••••••••• 15 The•Salomon Factor: Is its Commitment Solid?••••••••••••••••••••••• 16 The South Ferry Question.•••·•.••.••• ••• ••••• ••• ••• ••••••••••• 16 The Problem of Relationships: Kiley-Zuckerman, Lipper-Saloman ••••••• 18 Concl,usion. • ••• • ••••• •. • •••• • ••••••.•. • • • •••••••• • • • • • • • • .• • • • • • . . • • • . 20 Chronology~of Events In the Selection ProceSS•••••••••••••••••••·••• 22 Appendix "Report and Recommendation of the Staff Committee on the Proposals Received in Response to the Request for Proposals for the Sale and Redevelopment of the New York Coliseum Site~'.Exhibit A Public Officers Law excerpted••••·•••••••••••••••·•••••.t••••••Exhibit B Memo of Robert Selsam to Steven Polan of July 2, 1984•••·•·•••Exhibit C Memo of Steven Polan to Robert Selsam of July 11, 1984••••••••Exhibit D Letter from Robert Selsam to Steven Folan of November 9, 1984 •• Exhibit E Letter from Steven Polan to llobert Selsam of January 3, 1985 ••• Exhibit F Notice of Public Hearing (Committee on Oversight, Analysis and Investigation) ••••••••••••••• Exhibit G List of Speakers August 19, 1986 ••••••••••••••••••••••••••••••••• Exhibit H September 3, 1986 ••••••••••••••••••••••••••••••• Exhibit I The Chairman, following an exhaustive staff investigation of the actions of the eight-member Coliseum panel (composed half each of appointees of MTA Chairman Robert Kiley, and Mayor Edward Koch), an examination of all available documents, extensive interviews with dozens of persons involved in the process, and having conducted two full days of public hearings at which time the Committee heard from key witnesses and principals in this matter, hereby concludes: • The public interest was not served by the developer selection process and by its decision to award the property --_subject to City Planning Commission and Board of Estimate action -- to Boston Properties and Salomon Brothers for $455.l million • • The actions of the panel members in carrying out their function evidenced arrogant behavior, arbitrary and capricious actions, questionable and improper conduct, and in effect, by at least some members of the panel: favolitism and bid-manipulation • • The process was tainted, rushed, circumvented all app.ropriate analyses and public comment, and was void of fairness, candor and public accountability • • The review was unprofessional, evidenced a contempt for the community or the overall public benefit, and was conducted with utter disregard for all but the bid price though with apparent collusion and indefensible favoritism to one developer--Boston Properties--when a more open process of rebidding might have secured the MTA and the City a comparable sum of money--and maybe a better project as well. Crifical Failures In The Process 1. ROBERT SELSAM' S PARTICIPATION ON THE COLISElJM PROJECT FOR BOSTON PROPERTI~ WAS IMPROPER AND SHOULD HAVE BEEN PRECLUDED AS A VIOLATION OF THE PUBLIC OFFICERS LAW. Background: Robert Selsam was director of planning at the MTA and had a key role in ;he development of the all-important subway improvement component of the RFP for the Coliseum. The subway component is given great weight in the Coliseum RFP, and enormous decail is given to it. 'nle requisite improve ments in the Columbus Circle Station that had to be part of any developer~s application under the RFP also required (for the first.time in an RFP) that a developer must, if selected, apply for a 20 percent (3 F.A.R.) bonus from the City Planning Commission and the Board of Estimate. Any developer receiving even one foot.of floor/area bonus as compensation for the subway improvements is required to complete all the subway improvements. Analysis: Needless to say, the fulfillment of the station improvements and the satisfactory detailing of how that would be accomplished by any applicant as part of his proposal was a paramount concern. Selsam was hired away by Boston Properties and immediately made a vice president of the company in Sept. 1984, and he admits considering the prospect of conflicts of interest over that job acceptance (memo to Steven Polan, MTA General Counsel, July 2, 1984) and over participation in a Boston Properties bid for the Coliseum (letter to Steven Polan of November 9, 1984). In a response to Mr. Selsam's memo of July 2, Steven Polan on July 11 wrote: "Except under the circumstances that you might represent Boston Properties in some case, proceeding or application before MTA, there would be no potential conflict of interest in your employment by Boston Properties." Notwithstanding that Selsam did seek specific permission from M'IA general counsel to work on a "possible Boston Properties Coliseum ap.plication" (letter to Steven Po.lan of November 9th, after Selsam was at Boston Properties); and notwithstanding his contention that his involvement in subway improvement plans for Columbus Circle was minimal; and keeping in mind that Mr. Polan's second response to him contains no legal analysis, the following is clear: (2) A. An RFP process in which Selsam acted as a project manager for the applicant, Boston Properties, before the MTA, is an "appli~ation," and therefore falls under the Public Officers Law. B. Selsam's involvement in the design of the subway component of the RFP while at the MTA was not insignificant and Selsam worked at the MTA with Boston Properties for a year·on station improvements for its building at 599 Le~ington Avenue. C. Selsam had direct personal and professional relation ships with panel members Polan, Boyle, Sturz and Boepple and admits in his testimony to the Committee that one of his chief responsibilities was to be liaison to governmental bodies-the same governmental bodies he had been employed by--and most particularly the selection panel. While the investigation finds no indication of any intentional violation of any law by Mr. Selsam, and while Robert Selsam did seek WTitten opinion of counsel with respect.to a) accepting a.job offer from Boston Properties and b) participating in the Coliseum bid, we question the prudence and form and content of the con~ent he was given and maintain that, willfully or· unwill fully, his participation violates the intent of the Public Officers Law. We maintain that his..-participation was wrong, should have been precluded and· is part of a set of circumstances that compromised the integrity of the selection process and, thereby, the public interest. 2, MTA GENERAL COUNSEL STEVEN POLAN ACTED IMPRUDENTLY AND ARBITRARILY; HIS INCONSIS'f.ENT -INTERPRETATIONS OF THE PUBLIC OFFICERS LAW SO AS TO NOT PRECLUDE SELSAM'S PARTICIPATION ARE INEXPLICABLE. POLAN DID NOT SEEK OUTSIDE REVIEW WHEN THERE WAS A POTENTIAL CONFLICT OF INTEREST AND HE GAVE NOT ONE, BUT TWO OKAYS TO SELSAM, SOMEONE HE KNEW WELL PROFESSIONALLY, AND THEN WENT ON TO PARTICIPATE AS A PANEL MEMBER OF THE COMMITTEE THAT ULTIMATELY SELECTED SELSAM'S FIRM. Mr. Polan's review of Mr. Selsam's involvement, as expressed in his two Selsam~solicited opinions, and as explained in his testimony before the (3) Committee,become in total most qu_estionable. Background: • In his first communication of July 11, 1984, Mr. Polan defines the only possible conflict he could see with Mr. Selsam's employment: · "Except under the circumstances that you might represent Boston Properties in some case, proceeding or application bef~re the MTA, there would be no potential conflict of interest in your employment by Boston Properties." (In other words, unless Selsam participates in an application, case or proceeding before the MTA 2 there is no problem,) • Then on January 3, 1985 Mr. Polan, in a three-sentence letter incorporating no legal analysis, citing no cases, giving no indication of his reasoning and reviewing no facts, gave sanction to a Selsam involvement in a Boston Properties bid for the Coliseum • • In Manhattan Inc. magazine, (January 1986) ·Steven Polan justified his ruling to reporter Jonathan Greenberg: Asked about his opinion, Polan explains that "the sale of the Coliseum was not a case, proceeding, or application, and if it's not, this law doesn't apply." • Polan was questioned about his reasoning on 'the second day of the Committee's hearings. A key excerpt follows: ASSEMBLYMAN STEVEN SANDERS: Thank you Mr. Polan. In your letter, your first letter to Robert Selsam. on July ll, 1984, to which you have just eluded to, your letter emphasized by underlining the words case proceeding or applicati~n. Is it your testilDony that Mr. Selsam should not have been dis qualified from participation on the Coliseum project because his participation with the MTA was so limited in terms of what he did that would effect the RFP or affect the selection process, or what may be pending before the MIA wa,neither a case proceeding or application? MR.. POLAN: Okay. Let me be clear. The Coliseum, at such time we issued an RFP and we received proposals, obviously was an application. It was an ~pplication for us to take some .action. So, it's not as if the matter didn't eventually, become an application. It did. The question as to why I gave the opinion I did is you have to look at the totality of circumstances. You have to look at the nature of his limited involvement, the timing of that involvement, whether that involvement gave him any insider information, whether he was directly concerned and personally partici pated 1n it, and whether it was material and substantive to the decisions at hand within the agency. You can't say it was because of this I gave the opinion and not because of that, but you have t~ look at the totality of the circumstances. And, based on the totality of circumstance, I gave him the opinion that I did. Analysis: Polan's arguments are neither logical nor consistent. First he stated it wasn't an application; then he stated it was. Then, after deeming it an application, he suggested issues of timing, though the Public Officers Law puts a two-year hold on participation at agencies and in the private sector with respect to such applications. And finally, Selsam's key role in subway improvements at the Boston Properties development at 599 Lexington Avenue on behalf of the MTA and his role in the Coliseum RFP subway component are totally ignored. It is most illustrative that Mr. Polan thought it prudent to advise Mr. Selsam in his July ii,1984 letter~ to participate "in matters involving NYCTA pertaining to 599 Lexington Avenue for a period •• of two years to the extent that they might represent a case, proceeding or applicat~on" on the one hand, but gave no similar caution with respect ____ ;- - specifically to the Coliseum. On the contrary, Polan sanctioned--without study, _case review or citation, or analysis--the Selsam involvement with the Boston Properties Coliseum application pending before the MTA. 3. CHARACTERIZATIONS OF THE CIRCUMSTANCES SURROUNDING THE HIRING OF ROBERT SELSAM AWAY FROM THE MTA BY BOSTON PROPERTIES ARE NOT CREDIBLE, AND EXPLA· NATIONS THAT HIS HIRING HAD NOTHING TO DO WITH A PENDING BOSTON PROPERTIES INVOLVEMENT IN A COLISEUM BID DEFY BELIEF. Background: lobert Selsam joined the MTA as director of planning in 1978, having previously been at the Department of City Planning as ,,1rector of its Transportation Division. Mr. ,Selsam has a masters degree in urban planning from Columbia University and studied economics at the University of Pennsyl vania. Bis well-known specialty was in the area of subways. He described his work this way to the Committee~ "As Director of Planning for the MIA, I had responsibilities for both short and long range planning, One of my areas of responsibility was for negotiations with private developers for subway station improvements. I helped to develop programs that brought in substantial private fund ing to improve subway stations throughout Manhattan." Selsam did not have a background in either real estate development or financial analysis. Indeed, he was quite respected in his field of specialization--sub way station improvement and design. In 1984, Selsam worked at the MTA on developing plans. for the linkup of the IRT 5lst-and-Lexington and IND 53rd-and-Third subway stops that was to be part of the development package fo.r 599 Lexington Avenue. It was through his work on that· development where Selsam says he first got to know Boston Properties. In June ~f 1984, Selsam recalls being invited for a drink by Ed Linde, president of Boston Properties, at which time a job offer was made to him to become vice president. Mr. Selsam says he had not even met Mr. Linde before. This varies with the testimony of Mr. Linde, who says they had met during the 599 Lexington Avenue negotiations, adding that he had been impressed with Selsam's perform ance at those meetings. In the months preceding the job offer, Selsam had also been involved in what he says was a limited way regarding "what ought to be required of developers who undertake the development of the Coliseum site." It was no secret that the Coliseum property would be developed shortly after the opening ~f the Javits Center. Meetings Selsam participated in directly related to the nature of subway improvements that would be required of Coliseum developers and indeed, a few months.later, the Coliseum RFP included very stringent guidelines for developers on the nature of aif'design requirements for such subway improvements at .Columbus Circle. In fact, the subway improvement section of the development criteria is far and away the most elaborately detailed aspect of the entire RFP, with the most pages devoted to it. The attractiveness Robert Selsam would have to a private.developer with an eye on satisfying the most preci"se tastes of people at City Planning and the MTA with repsect to a Coliseum bid is obvious: • Why else would Boston Properties have hired him? • Selsam was made Project Manager on the Coliseum application • • Selsam was the liaison between Boston Properties ud government agencies during the approval process. "I would be the person to contact for all aspects during the public approval process ••• " he said in his testimony • • Having arrived at Boston Properties, Selsam concedes that he was amazed at what went into a building and that he had to teach himself to do financial analysis on a computer. "At Boston Properties, I spent the first few months trying to learn as much as I could about the development process. I learned to use a personal computer and became quite expert iri financial analysis ••• " Oddly enough, Selsam was unfamiliar with the negotiations with respect to the change in bids of Boston Properties, and deferred to Linde, who testified the second day. (7) Selsam was clearly of enormous and prejudiciai value to Boston Properties. He knew and worked with many of the members of the panel. He was the point man. fie was "Mr, Subways" in a project re'liew where subway improvements and bid prices transcended use, impact, long-range revenue and all else. There is no reasonable explanation for why he was hired by whom he was hired and when he was hired except for the very special value his name and repu tation would have for the Boston Properties proposal. Knowingly or not, Selsam was placed where he was most useful. It is not as if he had other professional credentials or development experience. He was more informed than anyone as to MTA and City requirements for the subway component, and he had personal relationships highly advantageous in the review, His hiring and subsequent position as Project Manager is clearly violative of the spirit and perhaps the letter of the Public Officers Law, 4. BOSTON PROPERTIES WAS GIVEN SPECIAL INFORMATION AND BENEFITED FROM SECRET COMMUNICATIONS IN A WILLFUL EFFORT TO GIVE FAVORED TREATMENT TO THEIR APPLICATION, THOUGH ITS PROPOSAL HAD NO SPECIAL DISTINCTION. Boston Properties' original bid was for $353 million, The project contained no residential component. There was an unnamed prime tenant. By June 10, Boston Properties had been coached.and induced in private off-the- record communications kept secret at least from some members of the screening panel (Con Howe and Philip Schneider on behalf of Planning Commissioner Sturz) to bring its bid up closer to New York Land's $477 million offer. Testimony of Marsilia Boyle, Steven Polan, and Abe Biderman reveals that Biderman was.,working to induce Boston Properties to up its bid dramatically. Boston Properties was assured that its proposal would be accepted if its offer was satisfactorily sweetened, notwithstanding that City Planning was leaning to the Silverstein proposal. (8) While the selection panel was ostenstibly considering five finalists who,_ had ...,. equal opportunity to make preserttations of their proposals in meetings held May 14, 15, 16, 20, 21, in fact, Boston Properties was being given unusual coaxing and consideration. s. BOSTON PROPERTIES Al.ONE WAS GIVEN NOT ONE BUT SEVERAL OPPORTUNITIES TO CHANGE THEIR BID, AND WAS GIVEN 2½ WEEKS VS, FOUR DAYS FOR NEW YORK LAND. Background: The five finalists were by no means given equal consideration, and special efforts were made on behalf of Boston Properties/Salomon only. They were urged and helped during a two-and-a-half-week period into drastically increasing their original bid--by the tune of $100 million. This was accomplished without any of the other bidders' knowledge, without the sharing with them of any of their competitors' bids. Boston Properties was given the all important advantage of being cajoled into getting their bid up to the magic number that would seal its approval. The other finalist (after five semi finalists had been narrowed to two)--the New York Land Company--was given only one opportunity and only four days to rebid, this occurring after the private, unauthorized, secret negotiations with Boston Properties had re sulted in their enormously upped second bid, bringing their bid to within striking range of New York Land's $477 million. Analysis: It cannot be overstated that the favoritism to Boston Properties was bold and extreme. In fact, Boston Properties was given all the dme it wanted ,or needed to get its bid within ballpark range. Secret nego~iations began immediately afte~ the May 22nd meeting, and Boston Properties finally came through on June 10th with its $453.1 million offer. Only on that date, June lOth,upon the panel's receipt of the $100 million--boosted Boston (9) Properties bid, was the other finalist, New York Land, officially invited - to make a new bid of its own. This was its first and only opportunity to rebia. It was given not two-and-a-half. weeks, but four days to rebid, with a deadline of June 14th. So, while on the one hand Boston Properties was coached into its new bid and given as -long as- it needed to ,J,do the number crunching and thinking leading to the introduction in its proposal of 350 condominiums (to justify the substantial increase over the first bid of $353 million), New York Land on the other hand, presumably, was supposed to -~rethink its bid and do similar computations and design changes in just four days. There has been no believable explanation for the favoritism to Boston Properties/Salomon Brothers. It is because there is no explanation that one can only wonder what private considerations or relationships may be the key to this. and this indeed does become conjectural. Suffice it to say that it is a fact that Boston Properties was treated in a favored way, was given plenty of time and opportunity to rebid, and was, in fact, manipulated into the-winner's circle. 6. BOSTON PROPERTIES ALONE WAS PERMITEED TO MAKE A RAD1'CAL CHANGE IN ITS PROPOSAL. The introduction of 350 condominiums to Boston PropertieslSalomon's proposal represented a major alteration of their first offering. Only they, not any of the other applicants,W6re permitted to make such an adjustment. This change was a follow-through on meeting the privately communicated price hike in their bid; the new residential component would justify the high bid that was being covertly arranged with them. No one from the selection committee ever approached Silverstein, Trump or Kalikow, about changing the configuration of their proposals. ,, n\ Because the Silverstein proposal had been considered by both the City . . Pl~g Department and ~y some member~ of the community to have had elements more appropriate for the site than the other proposalsa the question was posed several times at the hearings as to why it was not invited to rebid or to modify its submission. In the following exchange between Steven Polan and Assemblyman Gottfried, Mr. Polan was questioned about why Silverstein, if not also others of the five semi-finalists,weren't invited to rebid: ASSEMBLYMAN GOTTFRIED: First, just a couple of questions on the selection process. The five final proposals were New York Land, Boston Properties, Trump 1 and Trump 2, and the fifth was -- MR. POLAN: Silverstein. ASSEMBLYMAN GOTTFRIED: Now, the reason you didn't offer Trump 1 and 2 an opportunity to up their bid was partly that you felt it was not likely to get through the approval process? MR. POLAN: That was one reason. ASSEMBLYMAN GOTTFRIED: Okay. What was. the reason for not making the phone call to Silverstein's people and inquiring of them? MR. POLAN: Mr. Silverstein has stated before -- and again, there were lots of reasons. One reason was the concern which he had stated that he could never match the purchase price of someone who was seeking, who was going to build while keeping the existing improve ments on the site. ASSEMBLYMAN GOTTFRIED: So, his statement had already indict,ted that he had gone as far as he could go? MR. POLAN: Be never said that. He said that he could never achieve the purchase price of someone who was retaining the existing improvements. ASSEMBLYMAN GOTTFRIED: Okay. Although since he didn't know the bids from those people, he could be wrong. MR. POLAN: Theoretically. ASSEMBLYMAN GOTTFRIED: It just seems to me that in the same number of days that 1~ took to have this conversation with Boston Properties, you could have had similar conversations with Silverstein and let him take a crack. MR. POLAN: Well, there were, from the City's perspective, there was nothing particularly interest ing or special about the· Silverstein proposal by way of tax revenues, by virtue of prime tenants, etc., that would merit additional considerati01of Silverstein. (11) From MTA's perspective, again, we were focused in on achieving a sales price. We didn't think that he would be able to achieve that. · Moreover, we thought that by opening up the process at that point in time, we ran the risk of New York Land dropping their proposal. ASSEMBLYMAN GOTTFllIED: So, giving Boston Properties the opportunity to come up with the extra $100 million didn't run the risk of upsetting ~he apple cart, but in the same time frame, no extra time for New York Land to have second thoughts, in the same time frame, making a second phone call -- MR. POLAN: There was always the risk. There was a risk with Boston Properties. There was that risk. The reasoning is most certainly disingenuous. Asking Silvers~ein or Trump lCalikow to make a new offer would take no more time and run no more risk than asking Boston Properties. The notion that New Yo.rk Land might have just walked away from the whole thing is patently ridiculous, as is· the argument, which Polan fails to even maintain, that dealing with Bosto_n Properties alone ran no such risk. 7. NO FINANCIAL ANALYSIS WAS DONE. 8. NO ASSESSMENT OF ENVIRONMENTAL IMPACT OF THE PROPOSALS, COMPARATIVE OR OTHERWISE WAS CONDUCTED. In one afternoon, at the \neeting of May 9, 1985, 15 proposals were narrowed down to five. The occurred barely a week after the submissions were ma.de. Notwiths-randi.Ag:taat City Planning apparently eliminated three during the week for not complying in substance or form with submission guidelines, bringing the 15 down to 12, the key decision to just look a1: t_he top five was simply agreed upon. 15 became five, just like that. So much·for review. At the core of the mystery surrounding the inexplicable preferent:f;al treat ment given to .Boston Properties, is the.fact that the five semi-finalists were never assessed in terms of long-range financial benefit to the· City or appropriateness of their particular components. The selection panel members concede this largely, and no effort .is made to conceal that all that was looked at were the bids. But the panel abused the public trust in either respect, first, because the long-range revenue picture of these proposals should be taken very seriously before rushing to award a site to a developer whose bid may be unnaturally high but whose project would not be in the long-range benefit. Secondly, the contention that bid price alone mattered is blown apart because only one applicant was manipulated into upping his price and altering his pro posal in whatever way needed to sustain it. The total disconcern with the enviromnental impact of an enormous project like the one proposed on Clinton, Midtown, the Upper West ~ide and Central Park is an outrage, and shows the ranking of urban planning considerations in the minds of th~ public agencies that conspired to just throw this jewel of a site to, presumably but not in fact, the high bidder. There has been no consideration of the effects of this proposal in conjunction with other large-scale developments going up in the vicinity, and no assess ment of the•• traffic or air quality implications of the project for Columbus Circle itself. The work of the Tri-Board Task Force of Community Boards 4, 5 and) goes into great detail on this score. Another conspicuous and dangerous omission in the review process was the absence of any consideration as to the impact this enormous proposal would have on Central Park. The vast numbers of new users coming from the new building pose an unquantified threat to the City's.finest recreational and natural resource. Furthermore, the shadow effect on the park and the environs has been only casually studied. (13)