Pot windfall up in smoke for prominent pol | Boston’s powerful development agency everyone loves to hate | Cost to attend local colleges hit heart attack levels | Wu looks to squeeze more tax revenue out of half-empty office buildings | Quick hits |
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Catastrophic timing? With tax hike proposal, Boston Mayor Michelle Wu courts another bruising battle with the city’s now beleaguered real estate industry
Michelle Wu’s already notoriously rocky relationship with Boston developers and office tower owners may be about to get even rockier.
Boston and other cities with large office markets are facing an impending tax revenue crunch amid the shift to hybrid and remote work, with often half-empty office buildings and towers worth much less now than they were before the pandemic.
In remarks last week at a WBUR forum, Wu declared she wouldn’t be turning to city homeowners to make up the difference through higher residential tax rates.
Instead, Wu said she is considering a proposal to make up for the projected revenue loss by attempting to squeeze more money out of commercial properties, including struggling office high-rises and hard hit retail buildings.
Now industry groups that represent Boston developers and other commercial property owners are pushing back, arguing that hiking taxes on already battered office buildings could backfire badly.
Wu’s plan would need state legislative approval in order to shift even more of the city’s tax burden onto commercial property owners - as it stands now, they pick up 75 percent of the bill.
And Wu has cited the late Mayor Thomas M. Menino’s ultimately successful 2003 push to get the Legislature to enable Boston to temporarily shift more of the tax load onto commercial property owners.
But the situation facing downtown Boston is much more dire than it was two decades ago, when the value of office buildings took a hit in the wake of the dot.com bust, noted Greg Vasil, head of the Greater Boston Real Estate Board.
And even then, Menino faced strong pushback from downtown office tower owners and developers, Vasil recalled.
“We have not seen the commercial [real estate] market in this bad shape in forty to fifty years,” Vasil said. “It’s going to hurt the market if she tries to get any more cash out of the commercial side - these are already distressed assets.”
Tamara Small, CEO of NAIOP Massachusetts, urged Wu to look at other sources of revenue and to also consider pulling back from the array of additional mandates she has imposed on developers and office building owners.
Wu has had a running battle with the real estate industry over a number of issues.
Major flashpoints are city plans to require developers to include a greater number of subsidized, below-market rate apartments and condos in each new building, and tough and costly new energy efficiency regulations.
While the Fed’s interest rate hikes have been a major culprit, Wu’s policies have exacerbated these trends, leading to a steep decline in new construction, including badly needed housing, critics contend.
Taking a step back on some of these new regulatory proposals could help some Boston projects get back on track and bring in badly needed new tax revenue, Small said.
“When we talk to our members and ask how many firms are planning to actually put a shovel in the ground this year, not a lot of hands go up, particularly in Boston,” Small said. “If you don’t have new growth happening, I would suggest a very hard look at the regulatory requirements put into place in the last two years.”
Not enough green: Marie St. Fleur and a former state prosecutor settle lawsuit against cannabis startup they contend cheated them out of a big payday
Marie St. Fleur was a rising Boston pol when she wound up at the center of one of the biggest flubs in state political history.
Tom Reilly, the Democratic candidate for governor in 2006, picked St. Fleur as his running mate, only to drop her just a day later after allegations emerged that she had failed to pay tens of thousands in student loans and $12,000 to the IRS.
A state representative from Boston, St. Fleur recovered handily, going on to serve in the Menino administration and then later launching a new career as a cannabis industry consultant.
But the road to cannabis riches has apparently been a rocky one at times for St. Fleur, according to court documents reviewed by Contrarian Boston.
On Monday St. Fleur and onetime Suffolk Assistant District Attorney Amy McNamee settled a two-year long court case against Union Twist, a cannabis company that has opened locations in Allston and Framingham.
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