= Rose Kennedy Greenway: Creating Long‐Term Value MARCH 2010 HR&A ADVISORS, INC. utile Prepared for The Boston Redevelopment Authority 1 1 Urban transformations taking place across North America. 2 Transportation corridors repositioned as civic assets The High Line, New York City 3 Transportation corridors repositioned as civic assets Embarcadero and Ferry Building, San Francisco 4 Energizing downtowns Millennium Park, Chicago 5 Energizing downtowns Discovery Green, Houston 6 Energizing downtowns Fountain Square, Cincinnati 7 This transformation creates local and regional value. 8 The City remains competitive, and public costs are mitigated. Urban development reduces environmental and municipal costs over time. • 5‐20% on local roads • 8‐15% on water and New recreation space for sewer services urban dwellers • Reduce greenfield development 9 New value is created in surrounding districts Toronto: growth contained by the Expressway and GO Transit Lines 10 New value is created in surrounding districts San Francisco: development oriented away from Embarcadero and waterfront. 11 New value is created in surrounding districts New York City: High Line creates real estate value. 12 New value is created in surrounding districts 10‐15% incremental value 85 new development projects Complete/ in construction New York City: High Line creates real estate value. Planned 13 New value is created in surrounding districts Hudson River Park Millennium Park Toronto Don River Naturalization 20% of increase in Greenwich Village 25% of incremental residential value in 1‐3% property value increment property values from 2002‐2005. the surrounding district in the first 10 increases property value by years ($1.4 billion) $200‐400 million 14 The Greenway’s value creation to date. Methodology 15 Measuring the Greenway’s contribution. Approach: • Evaluate change in assessed values from 1995 through 2009. • Control for exogenous real estate trends including new real estate development. • Assess magnitude of pipeline development and land speculation. • Control for variations in the data set. 16 Public infrastructure development timeline Planning and Early Construction Heavy Greenway Creation Construction 5 0 5 0 5 0 198 199 199 200 200 201 1985: FEIS is 1991: Construction 1999: Big Dig 2004: Elevated 2007 & 2008: Parks approved. on “Big Dig” begins. is 50% complete. Central Artery opened along Rose is dismantled. Kennedy Greenway. 17 Cyclical nature of real estate market obscures incremental value analysis. 1990s 2000s 18 Comparing growth rates controls for market fluctuations. Planning Construction Greenway Creation 1990s 2000s 19 HR&A compared growth rates of the Greenway Study Area to the Central Business District. CENTRAL BUSINESS DISTRICT PRIMARY AND SECONDARY GREENWAY STUDY AREAS 20 The Greenway’s value creation to date. Findings 21 Greenway district exceeds CBD in value. 2005 Assessed Values per Square Foot 2009 Assessed Values per Square Foot Commercial, Commercial, $101 $290 Greenway Greenway Residential, Residential, $162 $553 Commercial, Commercial, $84 $245 CBD CBD Residential, Residential, $152 $493 $‐ $50 $100 $150 $200 $‐ $100 $200 $300 $400 $500 $600 22 Speculative bubble: Greenway growth above CBD. 5 0 5 0 5 0 198 199 199 200 200 201 1985: FEIS is 1991: Construction 1999: Big Dig 2004: Elevated 2007 & 2008: Parks approved. on “Big Dig” begins. is 50% complete. Central Artery opened along Rose is dismantled. Kennedy Greenway. 200% 180% +81% 160% +58% 140% CBD Greenway Study Area 120% 100% 80% 1995 2000 23 Pain of construction: Greenway district lags significantly. 5 0 5 0 5 0 198 199 199 200 200 201 1985: FEIS is 1991: Construction 1999: Big Dig 2004: Elevated 2007 & 2008: Parks approved. on “Big Dig” begins. is 50% complete. Central Artery opened along Rose is dismantled. Kennedy Greenway. 200% 180% 160% 140% +38% CBD Greenway Study Area 120% +9% 100% 80% 2000 2005 24 Greenway era: Accelerating rate of growth as district catches up. 5 0 5 0 5 0 198 199 199 200 200 201 1985: FEIS is 1991: Construction 1999: Big Dig 2004: Elevated 2007 & 2008: Parks approved. on “Big Dig” begins. is 50% complete. Central Artery opened along Rose is dismantled. Kennedy Greenway. 200% 180% 160% +47% 140% +36% CBD Greenway Study Area 120% 100% 80% 2005 2009 25 Greenway era: High commercial concentration drives higher rate of growth. 5 0 5 0 5 0 198 199 199 200 200 201 1985: FEIS is 1991: Construction 1999: Big Dig 2004: Elevated 2007 & 2008: Parks approved. on “Big Dig” begins. is 50% complete. Central Artery opened along Rose is dismantled. Kennedy Greenway. Commercial Residential 200% 200% 180% 180% 160% 160% +50% +49% 140% 140% 120% 120% +20% +18% 100% 100% 80% 80% 2005 2009 2005 2009 26 Value of Greenway Investment: Increased rate of commercial property value growth between Construction Era and Greenway Era. 180% 160% % 140% 0 5 + 9% 4 CBD 241% + 120% Greenway % +15 100% +6% 767% increase in growth rate 80% 2000 2005 2009 27 Increase in growth rate of commercial properties generated $3.1 B in property value. 180% 160% 140% CBD 120% Greenway 100% 80% 2000 2005 2009 28 Transformation of value is long‐term. 29 Reorientation of development to capture value takes time. 13 YEARS West Side Highway, New York City 173‐176 Perry Street, New York City 30 Reorientation of development to capture value takes time. 12 YEARS Embarcadero, San Francisco Ferry Building Marketplace, San Francisco 31 Incremental future tax revenue will be generated by incremental value and new investment. 180% 160% 140% CBD 120% Greenway 100% 80% 2000 2005 2009 … 2025 32 Strong investment to date. CURRENT AND ONGOING GREENWAY DISTRICT INVESTMENT 4M SF $1.4B FUTURE DEVELOPMENT ENVELOPE 3-5M SF 33 Placemaking activities will bolster long‐term value creation. 34 Create and activate the open space asset 35 Create and activate the open space asset Workers Residents Tourists 36 Create a complementary urban district. 37 Attain an adequate standard of O&M 38 Attain an adequate level of O&M funding State Funding General Fund Capital financing Corporate Sponsorships Dedicated Tax Assessment Philanthropy Business Improvement District Concessions Developer Fees Events City and StateGreenway District Greenway 39 = Rose Kennedy Greenway: Creating Long‐Term Value MARCH 2010 HR&A ADVISORS, INC. utile Prepared for The Boston Redevelopment Authority 40 40.