Office market blues | Big news from Contrarian Boston | Tip toeing around Covid’s origins? | Iconic Hancock tower gets boost | Newspaper chain plays loser’s game | State watchdog takes on the T | Healey tries her luck on Beacon Hill |
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New state watchdog has message for the T: Open your books!
A bit of a maverick during her time on Beacon Hill, Diana DiZoglio won election as state auditor on a pledge to keep state government on its toes.
Now DiZoglio has found one of her first targets, and it’s a juicy one: the MBTA.
DiZoglio tells Contrarian Boston that her office is gearing up for an intensive probe of the troubled transit agency, having sent an engagement letter to the T, the first step in the process.
The news comes amid yet another T mess, with a failed transformer killing power at downtown stations Tuesday and throwing the morning commute into chaos. That was followed on Wednesday by the collapse of an ceiling insulation panel at the Harvard Square T stop.
“We have literally had trains catching on fire,” DiZogilo said, noting her audit will “follow the money” and find out whether safety initiatives have been backed up by dollars and cents.
Keeping an eye on the T: State Auditor Diana DiZoglio
The former Democratic state senator from Methuen is also pushing a proposal to keep a closer eye on the transit agency, month in and month out.
To that end, she’s filed legislation with a pair of her former Senate colleagues for a T audit unit with the state auditor’s office.
“We don’t just need a one-and-done audit to help fix our broken transportation system,” DiZoglio said. “We need an ongoing process of accountability.”
ATTENTION Contrarians! Subscription option coming March 15
Sustainable news organizations like Contrarian Boston need support to deliver the kind of insider news you value. While some content will remain free, starting March 15th the majority of CB’s content will be available by subscription only. It’s a big step for us, and we can’t take it without you. We hope you will continue to be a Contrarian… just like us.
For a more detailed view of what we’re up to, see the piece at the end of today’s newsletter.
Tip of the iceberg? Owner of Back Bay office building in financial distress amid shift to remote work
When Columbia Property snapped up 116 Huntington Ave. for $152 million in 2015, the former owner offered up a bullish prediction.
“Columbia is going to do very well with this asset,” boasted the broker on the deal, calling the 15-story mid-rise next door to the Copley Place Mall a “trophy.”
Just over eight years later, the New York-based real investment firm is in danger of losing the 274,000-square-foot office building to its lender.
Columbia has defaulted on $1.7 billion in loans backed by the Back Bay building, which dates to the early 1990s, and six other properties in New York, according to Globe St, an industry publication.
And it is not likely to be the last Boston office property to face tough times, either, which could create a major problem for Boston. The city relies heavily on commercial property taxes to pay its bills.
116 Huntington Ave. in the Back Bay (by Chuck Choi Architectural Photography)
While prestigious, top-shelf towers are doing just fine, older and somewhat worn Class B office buildings could also face an uncertain future, said real estate executives at NAIOP Massachusetts’ “State of the Office” conference on Wednesday.
“The day of reckoning is coming,” said David Provost, senior vice president of leasing at Boston Properties. “The upper end of the market is doing great, but the bottom 30 to 40 percent is just not functioning.”
In fact, if what’s happening in New York is any indication, Boston could be in for a world of hurt before too long.
One of the Big Apple’s largest office building owners is gearing up to stop loan payments on several older properties, calling some “obsolete” in a post-pandemic world, according to a report in the Financial Times.
Hancock Tower to get posh new amenities floor as owner ups game in changing market
Speaking of the office market, a deluxe upgrade is in the works for Boston’s iconic Hancock Tower.
Boston Properties is taking over an entire floor at the 62-story tower and converting it into the “200 Club,” a riff on the tower’s official name, 200 Clarendon. (Sorry, it’s still the Hancock to us.)
The new amenities floor will feature a “spa quality” fitness center and a lounge with baristas serving java in the morning, to be replaced by bartenders at night, among other attractions, said David Provost, senior vice president of leasing at Boston Properties.
Boston’s iconic Hancock Tower (by Christian von Montfort)
The new club/amenities floor will also include large meeting rooms that companies can use for investor presentations, instead of having to rent out ballrooms at city hotels.
None of which will come cheap, with Boston Properties spending tens of millions on the work, Provost noted at NAIOP Massachusetts’ conference on the future of the office market.
“It is money well spent,” he added.
Yes, we may never know the exact origins of Covid-19. But let’s be clear just why that is.
That was Dr. Anthony Fauci’s take in the wake of revelations about a new government report that pegs the outbreak of the deadly virus to a lab in China.
“We may not ever know,” Fauci said Monday at the kickoff event for The Boston Globe’s Health and Biotech Week.
True enough. After all, there is still some mystery surrounding the origins of the 1918 influenza pandemic, though we do know now that it likely erupted at an Army camp in Kansas, not in Spain.
And maybe it will be impossible to ever nail down the exact pathway that Covid took before it erupted onto the world stage, and, in particular, whether it leaked from a lab in Wuhan or jumped from an animal to a human.
Yet it’s not a lack of scientific expertise that is preventing us from at least getting a fuller picture of the origins of the pandemic.
Rather, it’s because the virus originated in a country with an increasingly totalitarian government with no accountability to its own people, let alone the rest of the world.
Democracy is far from perfect. But does anyone truly think that if the same set of circumstances had happened in the U.S., we wouldn’t have by now have had innumerable federal, state, Congressional and criminal probes of the issue?
No to mention thousands of articles, TV news and radio reports, and probably a couple dozens books as well.
We don’t think Fauci, an honorable and upstanding public servant, is trying to cover anything up or purposely shield the government in Beijing, as the conspiracy theorists on the wacky right would suggest.
Was Fauci just trying to be diplomatic? Maybe. But the time is long past for tip-toeing around when it comes to the unaccountable and tyrannical government in Beijing.
Let’s just call things as they are.
Healey is channeling Baker with her tax break plan. Will she get the same treatment he suffered from Beacon Hill?
That’s one big question as Gov. Maura Healey pushes for legislative approval of her newly-minted $742 million tax break plan.
Baker proposed many of the same things, like tax cuts for low-income seniors, only to watch them go nowhere at the State House, with House and Senate chiefs consigning his tax break plan to a quiet death.
So will Senate President Karen Spilka and House Speaker Ron Mariano give their fellow Democrat a big win at the start of her first term?
We’ll see. The pair did their best to ignore many of Baker’s proposals, which, despite his popularity wasn’t all that hard to do, given the tiny contingent of Republicans in the Legislature.
It’s hard to see the two legislative leaders getting away with the same tactics with Healey, but party affiliation is no magic wand here.
Just ask former Gov. Deval Patrick, who struggled to get key pieces of his agenda enacted, and not always successfully.
As Gannett lays off reporters and shutters newspapers, the company’s lenders are making out like bandits
By Mark Pickering
There was a lot of talk about limiting newsroom layoffs when GateHouse Media bought Gannett at the end of 2019. Top executives spoke of the “efficiencies” that the pact would unleash. They expressed high hopes for the new business, which took the Gannett moniker.
But the cash-and-stock deal has, in fact, fallen far short of those expectations. Readers, communities, workers and journalism itself have been on the losing end of the deal, which created the largest newspaper chain in the country.
From the start, Gannett has been burdened by debt. Gannett still had, in early 2021, $1.5 billion in loans from the merger, USA Today reported at the time.
And the one clear winner in this situation: The lenders.
Michael Reed, Gannett chairman and CEO, said it quite well in the company’s earnings report for the second quarter of 2022. He said that management remains “focused on repaying $150 million to $200 million of debt in 2022."
Ultimately, Reed, who makes $7.7 million a year, fell a little short. Gannett’s recent earnings report said the company paid off $146.6 million of its debt in 2022.
The national newspaper chain also shelled out a whopping $108 million in interest payments.
All of which didn’t help the company either to turn a profit or keep reporters on the job.
Gannett’s cuts have been particularly savage here in Massachusetts.
Last spring, Gannett stopped printing about 20 weekly papers statewide. These included the Waltham News Tribune along with the Watertown, Newton and Brookline Tabs.
The company also got rid of most local content on those related websites. In effect, Gannett trashed the newspapers’ brands, which had been built up over several decades, and, in some cases, centuries.
So much for all those efficiencies Gannett was talking about. If there is a strategy - and it’s hard to detect one here - it’s simply slash, trash and burn.
Mark Pickering is a veteran of the local news business, having worked on the business desk and the opinion pages of the Boston Herald.
Why Contrarian Boston is launching paid subscriptions starting March 15
We launched Contrarian Boston in November 2021 with the hope of shaking things up a bit.
Tired of what we saw as oftentimes conformist local journalism, we were intent on filling a void in our local media ecosystem by offering critical, consistent, common-sense, and fair coverage of our local corporate, governmental, and media institutions.
At Contrarian Boston, we have focused our coverage on the issues that demand more thoughtful reporting. Reflecting our journalistic background, Contrarian Boston has indeed focused on regional development, real estate and housing issues.
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Our list of potential stories is overflowing with tips from readers, more than a few of whom we have gotten to know over the past 15 months. Our stories and reporting have been cited by The Boston Globe, Boston Herald, CommonWealth Magazine, and State House News Service.
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