Case Studies: Overcoming Adversity

Overcoming Adversity a case study by:

Brendan Crosby & Amy Therrien ARC G350 | Prof. Daniel Hewett Northeastern University School of Architecture

D4 Residence: a project by D4 Limited Partnership

D4 Residence South End, Boston MA a design project by: D4 Development Limited Partnership a case study by: Brendan Crosby & Amy Therrien

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special acknowledgement to: Kamran Zahedi, President, Urbanica Ltd. Mark Baranski, Partner, Orange St. Developers John Herbert, Ellis Neighborhood Development Committee for their time and help in better understanding the process and coordination of the D4 development.

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Introduction

Abstract & Learning Objective

The process of design starts as a specific, well laid out plan, agreed upon by the client, and the architect/development team. The design is conceived, manipulated, and finalized to a stage desired by the client and conceptually/financially feasible by the developer. Most often, unanticipated changes occur to the intended plan, including finances, material cost, labor cost, market trends and team changes. The most successful project depends on the ability of the team to recognize that changes are inevitable and adapt their intended plans to respond to these unanticipated project “realities.�

This is a case study of how a development team responded to several of these changes throughout the design and construction process and a critique of their ability to adapt.

How can project team members successfully adapt when

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Project Summary After its closing in 2001 the former D-4 police station, a Georgian Revival style building built in 1932 on the corner of Berkeley St. and Warren Ave. in Boston’s South End, was put up for sale and redevelopment by the Boston Redevelopment Authority. The existing 24,498 square foot building was designated by the BRA to be transformed into a “complex that provided quality homeownership opportunities to the residents of the city across a variety of income ranges... while preserving the architectural character of the neighborhood.”

A final request for proposal was answered in April of 2003 by eight development teams each rooted in the neighborhood and vying for the job. Ultimately, D4 Developers; comprised of South-End based Urbanica Ltd., lead by President Kamran Zahedi, and development partners George & Panos Demeter of Demeter Development Group won the bid. Their design partner, Yoo Ltd., founded by world famous, trendy designer Philippe Starck, promised to bring a new and unique luxury loft style design to Boston that was both elegant and modern.

faced with unanticipated project realities?

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Table of Contents Choosing the Right Team & Strategy 28 The Others The Candidates - Chart

Introduction 8

Project Team Introduction

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History of the Site

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The Candidates - Chart 2

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The Decision

32-33 34-35 36

Starck “Antics” Introduced to The South End 40

Bringing Luxury Design to Boston 18 The Location

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The Concept and Design of D4 in the South End Learning Objectives on “Project Realities”

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Yoo Team Structure

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Starck’s Design Intentions for D4

Learning Objectives on “Project Realities”

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Who are Yoo?

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Problems on the Horizon 70

D4 Ltd: A Partnership That Does It All 50 Forming the Partnership

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Urbanica Inc.

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Demeter Development Group

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The Construction Teams

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Marketing and Sales Teams

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Converting the Old to New 60 Design Descriptions Floor Plans Building Elevation Learning Objectives

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Changes Made Between the RFP and the Small Project Review

Proposed and Actual Timeline 72-73

BRA Meeting Minutes Tell the 74 Story

January 20, 2005 Meeting with the BRA

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May 31, 2007 Meeting with the BRA

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January 10, 2008 Meeting with the BRA

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Was the Community Opinion Ignored?

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Cutting Prices

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Additional Hardships

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Learning Objectives

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The Architectural Team

Project Outlook as of December 21, 2004

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64 67 69

References 70 7

Introduction Project Team Introduction

OWNER/DEVELOPER D4 Development Ltd. Partnership: George Demeter Panos Demeter Kamran Zahedi c/o Urbanica, Inc. 142 Berkeley Street Boston, MA 02116 T (617)_654-8900 F(617)_654_8901 DEVELOPMENT CONSULTANT Urbanica Inc. Kamran Zahedi, President Stephen Chung, AIA, Design Director 142 Berkeley Street, No. 402 Boston, MA 02116 T (617)_654_8900 F (617)_654_8901 Firm Description: PROJECT MANAGER FOR URBANICA Thomas J. O’Malley & Associates Thomas O’Malley 79 Boylston Street Boston, MA 02116 T (617)_821_8435 8

DESIGNER Yoo Ltd. Philippe Starck John Hitchcox 2 Bentinck Street London, UK W1U 2FA T +44 (0)20 7009 0100 F +44 (0)20 7009 0200 Urbanica, Inc. Kamran Zahedi, President Stephen Chung, AIA ARCHITECTS The Architectural Team Liviu Marza, AIA Michael Benet, AIA 50 Commandant’s Way Chelsea, MA 02150 T (617)_889_4402 F (617)_889_

Demeter Development Group 163 Newbury Street Boston, MA 02116 T (617)_262_1020 F (617)_424_8581

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Introduction History of the Site 2000 Census Data

South End

City of Boston

LandArea:

1.03 sq. miles

48.4 sq. miles

Population:

28,160

589,141

Population Density:

27,339/sq. mi

12,172.3/sq. mi

Foreign Born Pop:

20.6%

25.8%

Race - Caucasian:

12,751

290,972

Hispanic Pop:

4,578

85,199

Poverty Rate:

23.9%

19.5%

Unemp. Rate:

6.9%

7.2%

Median Income:

$41,590

$39,629

Housing Units:

15,261

251,935

Occupied Housing:

93.6%

95.1%

Median Gross Rent:

$707

$802

Occupation Service:

14.4%

17.8%

Occupation Mgmt:

55.6%

43.3%

4.8% of the population resides in 2.1% of its total land area.

Density is greater than twice the average density in the resst of the city of Boston. The South End is primarily densely packed blocks of Victorian row houses as well as sprawling housing projects, creating the dense fabric.

45.2% of South End residents identify themselves as Caucasian. This is the largest demographic in the neighborhood. 49.2% of city of Boston residents identify themselves as Caucasian. The South End is consistent with city of Boston data in this category.

45.2% of South End residents identify themselves as Caucasian. This is the largest demographic in the neighborhood. 49.2% of city of Boston residents identify themselves as Caucasian. The South End is consistent with city of Boston data in this category.

median income by race White: Afr. Amer.: Native Amer: Asian Pacific: Other: Multiracial: Hispanic:

$68,649 $20,560 $13,750 $19,384 $16,616 $22,292 $16,923

These numbers show the enormous disparity between whites and minorities in the South End. The area is very rich and very poor at the same time.

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The history of the South End tells a story of an artist’s community of illegal loft housing, and its demise into one of the city’s least desirable places to reside.

Presently, the neighborhood is seeing an urban revival unlike any other in Boston.

Originally a tidewater location, Charles Bullfinch created the original plans for the neighborhood after the South End was filled–in the 1850s (see map on right; original land before infill is on the right side of the image, slightly grayed).

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Building History

Introduction

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History of the Site

1884 Cyclorama

1931 Tremont St

625-627 Tremont St

1876 Tabernacle on Tremont St

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Introduction History of the Site

Below: Boston College originally began as a church and one college building on Harrison Avenue in Boston’s South End neighborhood.

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Shortly after the area was infilled, a boom of construction projects began in the new neighborhoods that had been created. In the South End, Reverend John McElroy purchased land on what is now Harrison Avenue. In April of 1858, ground was broken on the site for the construction of a church and a college building. Additional buildings followed, and five years after he had begun, McElroy was given an official charter by the State of Massachusetts to run his school, which was afterwards called Boston College. The South End remained the campus for Boston College until its relocation to Chestnut Hill in 1913.

The South End was originally conceived as a new area for the wealthy.

However, after a short time living in the neighborhood, many were attracted to new housing in the Back Bay and nearby Roxbury. This left the South End with a large immigrant population.

In the 1930s, a flood of Canadians came to Boston and settled in the South End area. By the mid 20th century, the area had grown into an artistic location for immigrants, homosexuals, artists, and middle class African Americans.

Right: Atelier 505, one of the South End’s newest and most expensive condominiums, located directly South (across Warren Avenue) from D4.

Far Right: Castle Square apartments, located on the southeast corner of the intersection of Tremont Street, Warren Avenue and Berkeley Street, diagonally from D4.

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Introduction History of the Site

A map of the South End highlights the neighborhood’s well integrated public housing projects (such as Cathedral Housing and Villa Victoria, pictured at right).

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In the next twenty years, despite the formation of the South End Historical Society, the safety and desirability of the neighborhood declined and most landlords abandoned their buildings. This resulted in the South End’s reputation in the mid 20th century as one of the poorest and most dangerous areas in Boston.

In 1973, the neighborhood was listed on the National Register of Historic Places, as the “largest urban Victorian row house neighborhood in the country”, and ten years later it gained designation as a Landmark District.

In 1994, rent control ended in Boston, which led to a flight of African American, West Indian, and Latino

South End residents, and an increase of white young professionals. Despite the gentrification in the 1990s (continuing in present day), the South End holds its ethnic diversity. This is due largely in part to a large concentration of housing projects in the area including Methunion Manor, Cathedral Housing, Villa Victoria, Tent City and Castle Square Apartments.

Together with the high income residents in the South End, the area continues to be a diverse mix of many cultures.

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Bringing Luxury Design to Boston The Conceiving of D4 and the BRA designation process

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The South End is contained on the northwest by the Orange Line T, on the southwest by Melnea Cass Boulevard, on the southeast by Route 93, and on the northeast by Route 90.

Representing an area of 1.32 square miles, the neighborhood is small and diverse. The density of the South End in 2007 was 20,377 people per square mile, which is significantly more dense than Boston’s average of 12,166 people per square mile.

The South End has over 20 neighborhood associations, each responsible for a variety of tasks in their specified area.

As seen in the map on the following page, the Ellis Neighborhood Association (highlighted) is one of the largest groups in the South End neighborhood, and includes the former area D4 Police Station.

Interestingly, the neighborhood associations taper off around Massachusetts Avenue, which is often considered to be a vague dividing line of the South End

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0

0

5

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Bringing Luxury Design to Boston The Conceiving of D4 and the BRA designation process

between the struggling area to the southwest and the area experiencing revitalization to the northeast.

The Ellis Neighborhood is contained by Route 90, Tremont Street, West Canton Street, and Columbus Avenue. Like the rest of the South End, this neighborhood is home to several blocks of Victorian brick row houses. The southern part of the designated area, including Tremont 20

Street, is experiencing perhaps the most significant revitalization, renovations, and new construction efforts in the South End. The former Area D4 police station is located at the corner of Warren Avenue and Berkeley Street. After the station’s relocation in 2001 to a larger facility on 650 Harrison Avenue in the South End, the former building remained empty.

The Boston Redevelopment Authority (BRA) was put in charge by the city of Boston to sell the property to a redeveloper who would renovate the building into condominiums.

In 2003, the BRA released a draft Request For Proposals (RFP) to the public.

By the time the deadline for submittals 21

Bringing Luxury Design to Boston The Conceiving of D4 and the BRA designation process

Key Players Involved in the Conception and Designation The Boston Redevelopment Authority One City Hall Square Boston, MA 02201

The Ellis Neighborhood Association P.O. Box 961 Boston, MA 02117

Director Mark Maloney

President: Norine Shults

Senior Project Manager Sonal Gandhi

Development Committee Chair: John Herbert

www.bostonredevelopmentauthority. org

was reached in July of 2003, eight teams of developers had assembled proposals for the site. Each saw the potential of the site, strategically located in what is arguably Boston’s newest up-and-coming area.

The Concept and Design of D4 in the South End After the relocation of the District 4 Police Headquarters to Harrison Ave in the South End, the Warren Street building and its property were left in the hands of the City of Boston and the Redevelopment Authority to determine what the area most needed and how the building would be best occupied. Under Mayor Menino’s stewardship, the city and the BRA were working hard at the time to meet the city of Boston’s needs for housing at the same time to continue the revitalization of the South End. Development objectives proposed by the BRA were to make a positive contribution to the neighborhood and City and to revi-

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talize the under-utilized vacant building, making it available to a developer to provide much needed housing opportunities.

In a dated memorandum from the Boston Redevelopment Authority, the plan for the proposed redevelopment was required to meet several important goals including:

concept was to provide a higher standard of living. They sought a renovation which would provide affordable housing and market rate units and at the same time provide the South End with an intimate community of luxury that would draw a certain type of trendy resident to the area.

• Contributing to the continued revitalization of the neighborhood by creating residential uses that provide quality homeownership opportunities to the residents of the City across a variety of income ranges and sizes • Maintain the streetscape by sensitively blending the redevelopment of Parcel SE-126 with nearby structures that would ensure a high quality of urban design • To preserve the architectural character of the neighborhood through the rehabilitation and renovation of the parcel.

The Atelier 505’s high-end residence was proposed as a leveraging factor against the non-profit theater company. Were there market trends on the brownstones (housing market different than the condo market?) that could have had a determining factor in the feasibility of selling even more high end in such a dense area of the South End?

In an area of the South End that had recently seen the construction of the high–priced Atelier 505 with its wide range of concierge services and the $5.2 million brownstones in the area, the BRA’s

In March of 2003, the BRA had issued its finalized draft of the RFP and set a final meeting date with the public for April of 2003. Included in the requirements of the RFP were: • A minimum of ten percent of the total housing units in the project were to be made available to moderate income and 23

Bringing Luxury Design to Boston The Conceiving of D4 and the BRA designation process

middle income households. Moderate households are those that earn up to 80% of the Area Median Income for the Boston Standard Metropolitan Statistical Area. Middle incomes are households, which earn between 80% and 120% of the AMI for the Boston SMSA. โ ข The maximum floor area ratio (FAR) is 4.0 and maximum allowable building height is 70 feet. However this RFP requires that the current height of the Warren Avenue and Berkeley Street elevations be maintained. There is an opportunity for addition infill development of the Gray Street faรงade, which shall not exceed the height of existing buildings along the southern side of Gray Street.

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• A minimum of 0.7parking spaces per dwelling unit is required under the code. Consideration should be given to excluding residents in the redevelopment from participation in the Boston Transportation Departments Residential Parking Permit program. • Access to the site via Warren Avenue, a one way residential roadway with additional access via Berkeley St (a one-way three lane major roadway). All proposals shall limit the entry to an exit from the garage including cars deliveries, and trash removal solely to Berkeley Street.

While the proposed designs were to relate well to the neighborhood buildings around it, they also had the opportunity to feature a signature style that makes the renovation 25

Bringing Luxury Design to Boston The Conceiving of D4 and the BRA designation process

a unique and unconventional addition to the community.

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of Starck to display his work.

Bringing together the history and rich tradition of the former police station site with a fresh and vital design approach to create a unique concept of urban living in Boston’s most desirable neighborhood was a large driving factor promoted by the BRA. The image of the South End was spun, by the city and developers alike, as a place unlike any other where one can experience the culture, art, theatre, fine dining and shopping within a five-minute walking distance.

The community responses to the development of the D4 station were mostly positive and open to the addition of a unique housing proposal with only minor concerns on the heights of the building and the amount of light that was to be blocked on the Grey Street façade. With its prime location in the Ellis neighborhood and unique architecture, the building is both a lucrative development opportunity and critical to the continued revitalization of the neighborhood says Andrew Rapp of the South End News.

Situated in the heart of Boston’s most lively neighborhood, it will offer the best location in the city for living well. Set in the tight knit fabric comprised of historic townhouses, tree lined side streets and charming squares on one hand and the best of contemporary architecture on the other. It is precisely the juxtaposition of the best of the old and new that provides the ideal setting for the renowned talents

Preservation of the building, which is particularly welcome on the Warren St side of the building which looks out onto the least attractive side of an increasingly unattractive building the new Atelier 505 development. The agency would be well advised to take advantage of this unique opportunity for community harmony. Andrew Rapp – South End News Since the height of the Atelier 505 was

such a controversial topic and concern of the Ellis community, the height restrictions of the new development seemed to be the main concern of the public.

The concept of the union of the old and the new was a large part of the marketing and the uniqueness of the police station site.

Learning Objectives on Project “Realities” Should the inception of a high-end residence been more closely looked at? Should the needs of the residents of the south end more thoroughly thought out?

Were the BRA’s expectation and requirements for the RFP exactly what they wanted in the area?

What were the reasons behind the requirements that were laid out?

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Choosing the Right Team & Strategy The Design Approval and Permitting Process

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Choosing the Right Team & Strategy The Design Approval and Permitting Process

Key Players Involved in Design Submissions and Team Building OWNER/DEVELOPER

DEVELOPMENT PARTNER/ FINANCE

D4 Development Ltd. Partnership: George Demeter Panos Demeter Kamran Zahedi

Demeter Development Group Panos Demeter

c/o Urbanica, Inc. 142 Berkeley Street Boston, MA 02116 T (617)_654-8900 F(617)_654_8901 DEVELOPMENT CONSULTANT Urbanica Inc. Kamran Zahedi, President Stephen Chung, AIA, Design Director 142 Berkeley Street, No. 402 Boston, MA 02116 T (617)_654_8900 F (617)_654_8901 PROJECT MANAGER FOR URBANICA Thomas J. O’Malley & Associates Thomas O’Malley

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79 Boylston Street Boston, MA 02116 T (617)_821_8435

163 Newbury Street Boston, MA 02116 T (617)_262_1020 F (617)_424_8581 DESIGNER Yoo Ltd. Philippe Starck John Hitchcox 2 Bentinck Street London, UK W1U 2FA T +44 (0)20 7009 0100 F +44 (0)20 7009 0200

Before the project itself can be analyzed, an investigation must be done into the other candidates for the project.

Why did the D4 Development Team win the competition and how was their design alike or different from the other submittals?

The Boston Redevelopment Authority received seven additional proposals from Wabash Construction, Trinity Financial Inc., New Boston Housing Enterprises, Sea Dar Real Estate, Hines Raymond LLC, Orange Street Partners LLC and Abbey Group.

Boston developer for 20 years. Educated as an architect at MIT, his firm is one that focuses on design specifically. Stephen Chung is the company’s design director and is responsible for the schematic design and design development of every Urbanica Inc. project. As a result, Urbanica Inc. typically hires an architect of record to complete construction sets, but does not require that any design input is given by the firm.

The following chapter will outline each team and plan briefly so that comparisons can be made between the proposals that were not chosen and the proposal that was.

Mr. Zahedi believes that his architectural background and attention to detail and quality set Urbanica Inc. apart from other development firms in Boston. The architect also operates his own construction company, Turnkey Construction. Because of his varied background in architecture, real estate, and construction, Kamran believes his firm has the edge that a project like D4 called for.

From the start, D4 aimed high. Urbanica, Inc. is the initiating force behind the Yoo Ltd. proposal. The company is owned by Kamran Zahedi. Kamran has been a local

The following page will illustrate objective strengths and weakness of the seven other design proposals for the former police station.

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23

41

41294

34921

Yoo Ltd.

24

26

38860

28689

Sea Dar Real Estate

36

35

42650

Hines Raymond LLC

27

24

40539

Orange Street LLC

27

26

39159

32938

Wabash Construction

24

30

42900

26000

Trinity Financial

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27

39172

29000

Abbey Group

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#o

New Boston Housing Enterprise

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#o fu nit s

The Candidates

The previous chart highlights the standout number in each of the categories. These represent factors which could have made each particular submittal special, unique, or more desirable than the other seven competitors. It could have pushed the BRA to choose one of the designs over another. This information is, however, objective, and does not take into consideration other subjective matters such as previous historic preservation experience, community support, or overall design intent, to name a few.

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The Design Approval and Permitting Process

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Choosing the Right Team & Strategy

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on ati cre job

#a

ffo rd

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un i ts

on t

o foo tag er ati sq ua re .845

3 (13%)

200 FT/PT

14 Months

.738

3 (13%)

60 FT

18 Months

5 (13.8%) 70 FT

12 Months

3 (11.1%) 60-70 FT

10 Months

.841

3 (11.1%) 30-35 FT

15 Months

.606

4 (16.6%) 40 FT

12 Months

.740

7 (20%)

10.5 Months

38 FT

• highest number of proposed parking spaces in an area of the South End that desparately needs additional parking • greatest proposed efficiency • highest number of proposed job creation

• highest number of proposed units for development.

Beneficial for those that wish to live in the South End.

• shortest construction time allows quick selloff and occupancy. Beneficial for neighborhood (less construction intrusion)

• highest gross square footage. Not as important as total net square footage or gross to net ratio. However this option will assumedly have a large amount of common space, which could be desirable

• highest percentage of affordable units. Beneficial to lower income Boston residents. Beneficial for the BRA, which desires a high percentage of affordable housing units to improve their image.

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The Candidates

The Design Approval and Permitting Process

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Choosing the Right Team & Strategy

New Boston Housing Enterprise

Important to the project focus: accurate exterior restoration 23 41 41294 34921

Yoo Ltd.

Important to the project focus: sensitivity to materials, vocab of 24 26 28689 existing and adjacent buildings, preserve and 38860 enhance exterior while implementing a state of the art interior

Sea Dar Real Estate

Important to the project focus: Middle-market aim rather than 36 42650for maximum luxury, full exterior restoration, fill-in 35 existing building number of units, meet desire of new South End homeowners who can’t afford current luxury.

Hines Raymond LLC

Important to project focus: of exterior and 27 Respectful 24 restoration 40539 interior, addition of 14,000 sf that will reflect the character of the building.

Orange Street LLC

Important to the project focus: Bring new residents to the area, 27 of the existing 26 39159sensitive 32938 preservation of the integrity structure, addition to Grey St. streetwall, harmony of scale and material, enhanced and restored elements of public sidewalk on Warren Ave.

Wabash Construction Trinity Financial Abbey Group

Important to the project24 focus: Reflect segments 30 manyfilldifferent 42900 26000 that make up the South End neighborhood, in the courtyard Important to project focus: Respect and preserve visual character 35 volume27 39172 29000 with an appropriately scaled of new construction that blends seamlessly, landscaped open space in center to enhance quality of life for residents.

Important to project focus: Not sure yet. 11 Units so it must have been aimed at fulfilling luxury living in the South End.

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• highest number of proposed parking spaces in an area of the South End that desparately needs additional parking • greatest proposed efficiency • highest number of proposed job creation

the “generic approach”

.845

3 (13%)

.738

3 (13%)

200 FT/PT

the “best of both” 60 FT

the “middleman”

5 (13.8%) 70 FT

14 Months 18 Months 12 Months

the “14000 sf where?”

3 (11.1%) 60-70 FT

• highest number of proposed units for development.

Beneficial for those that wish to live in the South End.

10 Months

• shortest construction time allows quick selloff and occupancy. Beneficial for neighborhood (less construction intrusion)

the “sensitive harmoneous lovely reflection”

.841

3 (11.1%) 30-35 FT

.606

4 (16.6%) 40 FT

.740

7 (20%)

15 Months

the “how are you going to do •that?” highest gross square footage. Not as important as total net square 12 Months

footage or gross to net ratio. However this option will assumedly have a large amount of common space, which could be desirable

the “residents first”

the “”

38 FT

10.5 Months

• highest percentage of affordable units. Beneficial to lower income Boston residents. Beneficial for the BRA, which desires a high percentage of affordable housing units to improve their image.

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Choosing the Right Team & Strategy The Design Approval and Permitting Process

As the charts on the previous pages show, the Yoo Ltd. project, later known as D4, did not present any outstanding numbers in any of the categories outlined.

It does not have the highest number of units, parking spots, net/gross square footage or affordable units. It does not claim to provide the highest number of jobs or have the shortest construction time line.

There is, however, one factor that the chart was not able to provide.

The majority of the projects were not forthcoming in the original RFP with information regarding the selling price per square foot.

Yoo D4 Urbanica and Abbey Group were

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at the top of this range, aiming to sell their properties in the area of $1000/ft2. This number was well above the South End’s most expensive new project, located just across the street, the Atelier 505.

The choice came as a particular surprise to the Ellis Neighborhood Association.

The head of development at the association believed that Urbanica showed how inexperienced they were during the duration of construction.

He believes that another development group could have steered the project in a more successful direction. At the same time, however, the Ellis Neighborhood Association admitted that they were excited to work with whichever developer was chosen for the renovation of the former police station.

Why, then, was Urbanica chosen by the BRA as the developer of the project?

The Yoo D4 Urbanica Ltd. team had a few key members that were responsible for the formation and structure of the entire team.

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Choosing the Right Team & Strategy The Design Approval and Permitting Process

DM Berg and Company Structural

Marketing & Branding

Architecture & Design Services The Architectural TeamConstruction Docs

Yoo Ltd. London

Carol R Johnson Landscape Arch.

Philippe Starck NE Engineering MEP Services

Coldwell banker URBANICA INC.

Sales

Consruction Services

D4 Limited Partnership

Turnkey Construction

Payton Construction

Thomas J O’Malley Develop .Consultant

Wainwright Bank & Trust Company

BOSTON REDEVELOPMENT AUTHORITY

Demeter Development Group Ellis Neighborhood Association

FInancing

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Permiting & Approval Process

Choosing the Right Team & Strategy Learning Objectives What differences might the project have experienced if a different team had been chosen to develop the property?

Should the BRA have been more careful to choose a project with a short timeline? In hindsight it’s easy to say the project might have sold more quickly if it had been completed before the market crash, however completion time might not have been a consideration before this happened.

Was Urbanica and Yoo Ltd.a good fit? If given the choice again, who would Urbanica keep and eliminate from the original project team?

Would other projects such as Abbey Group, which proposed 11 units, or Sea Dar Real Estate, which proposed 36 units, have sold more quickly in the South End? Did Urbanica aim at the right market for the area?

How did the BRA feel about the high price tag?

Did they feel the project would be able to live up to the hype?

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Starck “Antics” Introduced to The South End Celebrity Design and The Branding of a Product

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Who Are Yoo? “Yoo is a strong international lifestyle brand that is synonymous with design excellence and exclusive quality developments.” - Yoo Ltd. website Everyone on the design team at Yoo believes passionately that design with boldness and integrity adds inherent value to developments. It can shine up new potential in the most neglected urban spaces.

It can turn forgotten buildings into icons of modern living. It can change the way people want to live. Yoo has successfully accomplished this design approach in several international projects and has established a strong global identity through high-profile corporate marketing.

Working with Yoo Ltd., designers are able to reinvent their style with each new project and each new area. With the uniqueness of transforming an existing police station to loft-style residences, Philippe Starck, cofounder and designer for Yoo Ltd., saw the opportunity to bring

his quirky design antics to Boston’s South End. The appeal of the Yoo brand for most developers is introducing to their project the spark and attractiveness that world renowned designers like Philippe Starck, Jade Jagger and Marcel Wanders bring to the table. For these clients, the ability to market and sell their properties becomes much easier. With the success of the thousands of projects involving Yoo’s touch, who could argue against this branding technique?

Included in some of Yoo’s most recent success stories are: • Dwell95 in New York which was 50% occupied prior to launch.

• yoo Toronto which was 66% sold within 5 hours of launching.

• Downtown by Starck (his first residential project in New York) was 90% sold within 21 days of launch.

• yoo Punta del Este was 85% sold one month after launch and are selling 20% higher than rival developments.

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Starck “Antics” Introduced to The South End Celebrity Design and The Branding of a Product

Key Players Involved in the Design and Marketing of D4 DESIGNERS

MARKETING AGENTS:

Yoo Ltd. co-founders: Philippe Starck John Hitchcox

Gibson Domain Domain Brian Perry Mary Kelleher

2 Bentinck Street London, UK W1U 2FA T +44 (0)20 7009 0100 F +44 (0)20 7009 0200

540 Tremont Street Boston, Massachusetts 02118 T 617 426 6900 F 617 451 7537 Coldwell Banker

Philippe Starck Ubik 18/20 , rue du Faubourg du Temple 75011 Paris FRANCE T + 33 (0) 1 48 07 54 54 F + 33 (0) 1 48 07 54 64

Right: Yoo Inspired by Philippe Starck designs for Downtown by Starck in New York City, a Loft style high end residence. Examples of how Starck incorporates his Nature and Urban design schemes into his projects.

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“Good design gets good press (yoo get a lot of good press). And the media buzz makes potential buyers more confident, more likely to buy.� - Yoo website Kamran Zahedi, partner in the D4 development, from project inception was eager to bring Starck onto the project.

His hopes were that his aura and spark would bring to Boston and the South End something that had never been introduced, a different and unique style of living within a traditional building and neighborhood. Zahedi also hoped that Starck’s involvement would benefit him in the long run with the ability to sell the units at top dollar just as adjacent Atelier 505 had done.

As preliminary design was being completed and model unit designs were being shown to the public, another Boston project was showing just how lucrative the Philippe Starck touch could be for developers. Parris Landing, a re-branded condominium building in the Charlestown Navy Yard where Starck infused 43

Starck “Antics” Introduced to The South End Celebrity Design and The Branding of a Product his magic on the common areas, designing crazy oversized sculptures such as a duck, a pacifier and a tea-cup and saucer was selling at a rapid pace. Here, Starck provided optional design packages for condo units but his main idea of “seeing the home as an oasis” was portrayed in the atrium space with his sculptures.

Parris Landing generated approximately $100 million in sales by June of 2005 after marketing began in September of 2004.

Within 18 months of marketing, 310 of the 367 units were sold.

Over the last five years, John Hitchcox and Philippe Starck’s Yoo brand has earned a reputation as one of the most innovative and visionary property developers in the world. The Yoo name has redefined the conventions of residential design and property marketing, and as dexinger newsletter describes, they are “injecting verve, wit and personality into every project the company takes on.”

There are now over 4000 Yoo apart44

ments, over $2 billion worth of development, worldwide and partnerships under way in many different cities and countries including, Moscow, Boston, Miami, Tel Aviv, New York, Sydney, Seoul, Germany, Austria, Madrid, Melbourne, Argentina, and Phuket Thailand.

Over the past ten years, the world has seen an influx of celebrity endorsement into the design and fashion industry.

The lure of these products causes some consumers to pay double the price of the non-endorsed regular items. Why buy an ordinary perfume when you can buy a celebrity fragrance? Why buy a designer coat when you can buy a celebrity designer coat? This has proved that celebrity endorsements are mutually beneficial because the relationship between the brand and celebrity is easily understood by the consumer.

Just as many famous celebrities have entered into the world of fashion, putRight: Yoo Inspired by Philippe Starck completed these modern designs in the restaurant of super conservative Peninsula Hotel in Hong Kong.

ting their brand name to clothing apparel, fragrances and home decor, the appeal of celebrity branding is spreading to the housing and design market. Clients are willing to pay more for a living space or workspace that has been endorsed by a celebrity architect. Some believe that this is a large emerging trend and that celebrity branding and design will spread to more of the creative fields involving consumerism. Some also believe that the trend can be described as “styling a long term investment.”

Philippe Starck the Ultimate Modernist “Philippe Starck is motorcycles, sunglasses and glam hotels, the rock star-like bad boy who can design your home.” –Yoo Ltd Starck rarely needs an introduction. He is one of the most celebrated designers in the world and is the creative mind behind everything from Ecole Nationale Supérieure des Arts Décoratifs in Paris to Peninsula Hotel Restaurant in Hong Kong. His surrealist brand of modern45

Starck “Antics” Introduced to The South End Celebrity Design and The Branding of a Product ism is instantly recognizable and yet he brings an element of surprise to each project.

Together with John Hitchcox, Starck founded Yoo Ltd. in 1999 with the concept that the design of a building takes place from the inside out. Their mission was to transform undesirable spaces into the hottest addresses in town, and through design-centered philosophy create a completely new approach to living.

Starck’s Design Intentions for D4 For the large name and media frenzy that Starck was to bring to Boston and the D4 development project, his design contributions were planned to be minimal. Kamran Zahedi of developer Urbanica Inc, brought Starck on to the project to infuse his celebrity, his personality and his style upon the development of D4. However, Yoo Ltd. and Starck were only brought onto the project as design partners. Steven Chung AIA, designer for Urbanica, was to spearhead, the lead design for the 46

NATURE “Nature is wild and free. Organic. Healthy. Fresh” “In Nature you are surrounded by organic, feel-good materials. No hard edges, just comfortable, soft and textured finishes, Sun-filled spaces, where you can breathe in the fresh air. Green and yellow are the colors of choice, naturally. Dream of the outdoors.” quoted from YooD4’s marketing brochure by Gibson Domain Domain.

Key Materials:

Caramel Bamboo Wood

Hansgrohe Faucets

Cervaoile White Marble

FSB Door Handles

Wool Carpet Textures

Flos Feature Lighting

Yellow

URBAN “Urban is smooth, white and tranquil. Pure and simple.”

“URBAN. A retreat. A place of calm in the city. White and tranquil. Pure and simple. Sophisticated. Set amidst the chaos of city life, URBAN is your retreat. Sometimes you just want to be here on you own. Its a blank canvas that allows you to be surrounded by your own thoughts. Solitude. Peace and Quiet.” - Marketing brochure by Gibson Domain Domain Key Materials:

White Oak Flooring

Honed Granite Surfaces

White

Omnia Door Handles

Blanco Faucets

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Starck “Antics” Introduced to The South End Celebrity Design and The Branding of a Product building’s composition while Starck was to put his touch on the interior living spaces and common areas.

Starck designed two interior options for buyers: • The ‘’Nature” option has bamboo floors, teak kitchen cabinets, and raised porcelain sinks in the bathroom. Marble tile is now de rigueur in luxury bathrooms, but Starck did it bigger and bolder, selecting one-foot-square Cervaiole marble from Tuscany.

• The less expensive ‘’Urban” option is white on white: white oak floors, white laminate cabinets, white ceramic tiles, and white walls.

While in Boston for the sales and marketing launch of the units, Starck was interviewed on his design interventions by the Boston Globe. The following is an excerpt from that interview: Q: You’re a partner in a London development firm, so why did you take on such a 48

small project with only 26 condos?

A: Because the size doesn’t matter. Big is not a quality. The quality is the spirit you put in it. The tenderness, the intelligence you apply. If it’s big, it’s big. If it’s small, it’s small. You can make a jewel.

Boston is sophisticated. The area is very refined and the scale of the building is perfect for this area. If it’s just to make business, I don’t want it and I don’t need it.

Q: The building was a police station. Did its past appeal to you?

A: I don’t care. It’s a bleak building in the right location and there’s no vibration.

Police aren’t the worst thing in the world.

I’m very happy because this will be a very atypical project. I’ve never heard them speak about money. They come to London every three months and say, ‘how can we make it better?’

Q: Local architects Urbanica had some wild ideas for the project that they thought would appeal to your sense of humor, you didn’t like it.

A: I don’t want to make a crazy project.

There is a huge difference between public spaces and private ones. A hotel, a restaurant, people stay between three minutes and three days. You have a duty to make something very strong to make that a memory. I am a specialist at that. I am THE specialist at that. But for a home, the only duty you have is to protect these people. A floor plan can change your life. We’re here to help you have a better life.

Learning Objectives on Project “Realities” The slower housing market is partially responsible for lagging sales. In the current market, home buyers are different than those in prosperous times. They pay attention to detail. Does Philippe Starck have the expertise to appeal to a down market?

Price reductions were also achieved by converting interiors from Nature to Urban.

Unit 14, initially designated as a Nature unit, was priced at $1.27 million but sold as Urban for $1.1 million. How easy was it to convert the units from Nature to Urban? Was it easy enough to keep the units profitable amid a changing/falling market?

Agents contrast YooD4’s sales to the strong sales at Atelier | 505 across the street. These units sold out before the project was completed. What fundamental design choices and differences were there between Atelier | 505 and YooD4?

Why was YooD4 designed differently based on Atelier | 505’s success?

Was Starck overexposed in Boston by heavy 2005 marketing of his other local project, Parris Landing in the Charlestown Navy Yard? What could Urbanica Inc. and their marketing team along with Starck have done to create a different appeal with the D4 project to distinguish it from Parris Landing?

Should Starck’s design choices have been made optional? Would the units have appealed to more buyers if the finishes were able to be modified?

Above, clockwise from top left: Rendering of “Nature” living room lofted space on fourth floor unit; “Urban” dining room and kitchen rending; bedroom wall niche; proposed marble finish in bathrooms.

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D4 Ltd: A Partnership That Does It All Budgeting and Financing a High–End Residential Project

Turnkey Construction Corporation

Turnkey Construction Corporation

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The senior members on the project included Yoo Ltd. (outlined in the previous chapter), Urbanica Inc., Demeter Development Group, and Thomas J. O’Malley Associates.

These four entities came together to form a partnership. On December 4, 2003, the group requested authorization from the BRA for the tentative designation of D4 Development Limited Partnership as the redeveloper of the former D-4 Police Station and addition of 38,360 square feet into twenty-four residential units, of which three would be affordable, and twenty-six parking spaces, and open space improvements located at 7 Warren Avenue.

The BRA granted this approval, as well as subsequent approvals for extensions of this partnership designation as the project continued and began to experience delays.

51

D4 Ltd: A Partnership That Does It All Budgeting and Financing a High–End Residential Project

Kamran Zahedi is the owner and founder of Urbanica Inc., an urban development company that has completed a variety of projects including historical preservation and residential construction projects and renovations.

He was educated at MIT and graduated with a degree in architecture and civil engineering. He has also received a certificate of achievement from the Center for Real Estate, also located at MIT. 52

In addition to his expertise, Stephen Chung, an architect with his degree from Harvard, provides the architectural design for Urbanica.

Urbanica also has a full time construction supervisor, Wojciech Bankowski, and a financial consultant, Cheryl Simpson.

The company sometimes provides construction management services on their own projects, rather than using an outside source.

Panos Demeter, and his father George Demeter are the men behind Demeter Development Group, which specializes in adaptive reuse and historical preservation projects.

Panos is a real estate investor and has been the Chairman of the Board of Mercantile Bank and Trust Company since 1997, when he was named the board’s youngest member. His father is a cofounder of the local Boston bank.

George Demeter has been involved in real estate development since the 1960s when he developed his first property at 61 Brookline Ave. He is also the founder of Mercantile Bank and Trust Company.

He holds the position of Chairman of the Mercantile Capital Corporation.

Working in partnership with his son, they embark on various real estate investment ventures together. George is very involved in property management, owning a variety of buildings in the Back Bay. 53

D4 Ltd: A Partnership That Does It All Budgeting and Financing a High–End Residential Project

The Architectural Team is a prominent firm in the Boston area that has completed many projects and received various awards for historic preservation and renovation projects.

Kamran had never worked with this team before but chose them based on their reputation for excellence in the areas that the project would require.

The architecture firm provided architect of record services including the drawings and completion of the construction set 54

Turnkey Construction Corporation

Martini Construction was the general contractor and construction management company named on both the submission to the BRA (in response to the RFP) in 2003, as well as on the Small Project Review Application, submitted one year later in July of 2004.

The company has built a reputation in the area for commitment, safety and dedication, receiving various awards of excellence from associations including OSHA and the Associated General Contractors of America.

Payton Construction Company was founded in 1986. The company has completed a variety of successful projects in all building categories throughout its 20 year history.

In 2005, the company was forced them to file for bankruptcy. In 2007, Payton had to close their doors for failing to properly reorganize after filing for Chapter 11.

Currently, however, their website lists current projects and awards, so it appears the business has reopened.

Turnkey Construction Company was founded in 1996 by Kamran Zahedi. He owned and operated the general contracting and construction management corporation until founding Urbanica Inc., at which time Turnkey took a backseat to the real estate developer’s new company.

From time to time, Kamran relies on his original company for help with completion of development projects that he is working on, such as D4 called for Turnkey’s help part of the way through the construction of the project.

55

D4 Ltd: A Partnership That Does It All Budgeting and Financing a High–End Residential Project

Gibson Domain|Domain was founded in 1962 in Boston’s South End. Since it’s founding, the company has expanded and partnered with Sotheby’s real estate.

With its enormous success, Gibson Domain has remained a true local real estate company in Boston and especially in the South End for high end residential properties.

As someone that Kamran had used on previous projects, Gibson seemed a natural choice for the marketing and selling of the South End project.

56

Coldwell Banker was founded in 1906 and is a more widespread, franchised real estate firm. With no particularly strong ties to Boston or the South End, Coldwell was the fallback for the D4 project.

Coldwell Banker advertises on television and the internet, and caters to a wider audience than Gibson Domain.

When Gibson Domain’s contract expired and there were still units to sell, Kamran turned to Coldwell Banker to finish the job.

Project Outlook as of December 21, 2004 At one of the first meetings held with the BRA, the D4 Development Limited Partnership requested an extension of the time period of the tentative designation of their partnership as the redeveloper of Parcel SE-126 located at 7 Warren Avenue. The partnership needed this designation due to an extended amount of time necessary for completion of the provisions set forth in the Tentative Designation Resolution in December 2003.

At this point, the project proses 26 units with 3 of those units priced below marketrate for individuals making less than 80% of the average median income in the area. The partnership has given a vague number of parking spaces, between 27 and 32, depending on whether or not the use of vertical lifts are employed.

By this initial meeting on December 21, 2004, the BRA has issued certificate of

approval confirming that the project has complied with Article 80 requirements, Small Project Review. This is an important certificate for the D4 Development Limited Partnership to receive, as it is the green light to go ahead with project design, preparation, specification and permitting.

The pre-construction phases of the project are, at this point in time, expected to be completed by February 28, 2005. Construction is proposed to begin immediately thereafter with a timeline of between fourteen and eighteen months.

As per an initial pro forma developed by the limited partnership, the total development cost of the project from inception to completion is estimated at $17,500,000.

A construction loan of $15,000,000 has been acquired by D4 Development Limited Partnership, with the rest of the development costs (estimated at $2,500,000) to be provided by the redeveloper’s equity. This equity comes from a combination of money from Kamran Zahedi, Panos 57

D4 Ltd: A Partnership That Does It All Budgeting and Financing a High–End Residential Project

Demeter, George Demeter, and a private investor sought out by Mr. Zahedi.

There is a note in the meeting minutes from December 21, 2004 stating that “an estimated amount approximately equal to 10% of the expected net profit from the sale of the twenty-three (23) market-rate units and the parking spaces, will be paid to the BRA as units are sold and following repayment of the construction loan.”

This appears to be an agreement that was not widely publicized, and is of some interest to those questioning the reason behind the BRA’s decision to choose D4 Development Limited Partnership as the redevelopers of the former area D4 police station. The partnership proposed one of the highest-end proposals of the eight received by the BRA. By this point, the BRA had already received Certificate of Design Approval from the South End Landmark Commission giving the developers permission to historically and with a preservationist ap58

proach, restore the integrity of the original police station’s exterior while renovating its interior with the [sometimes] outlandish designs of Philippe Starck.

Stated in these meeting minutes, the project construction is expected to begin by early winter 2005. This is somewhat contradictory to a statement earlier in the same document that said the preconstruction phases are estimated to be completed by February 28, 2005, with construction commencing immediately thereafter.

In the Development Team section of the minutes there is no general contractor or construction company named in the list of team players. Martini Construction, who had been listed on both the response to the RFP and the Small Project Review Application, had also created a project timeline estimating the construction to begin by April 12, 2004 and be completed by March 28, 2005. However, by December 21, 2004, it seems as if had been omitted from any mention by December 2004.

D4: A Partnership That Does it All Learning Objectives Did Urbanica originally choose Burt Hill and Frederick Stahl as the Architect of Record because of Stahl’s Lifetime Achievement Preservation Award? Did they use it to their advantage during the BRA’s initial selection process?

Was Urbanica Inc. too inexperienced in the ins and outs of project contracts, financing, and managing?

What were the original team choices based on?

What agreements could have been made in addition to the project contract to ensure a strong team formation (in order to avoid project delays and cost increases)?

59

Converting the Old to New The Architectural Design and Detailing

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Design Descriptions Interior Renovations D4 was designed to accommodate 26 residential units, ranging from one to three bedrooms in size. Three of the units were designated as affordable to first time home buyers. All of the units were designed to maximize light and ventilation, wrapping around a common glass roofed courtyard which was to be featured as a shared function space for all the buildings tenants. This space, conceived by Starck, was to be filled with lemon and orange trees to engage the senses. Ivy was to be draped on the inside walls of the courtyard. Together, these elements were intended to create a unique and tranquil setting.

The courtyard was also to bring light and air into the building, while the roof was designed to conform to “green� building concepts. The passive solar glass covering the courtyard was designed to regulate harmful sun rays and the roof mostly covered in grass or similar vegetation

was created to reduce storm water runoff, protect and extend the lifespan of the waterproof membrane, insulate the building interior, reduce the heat island effect and provide added habitat for birds and beneficial insects. These elements were intended to reduce the energy consumption of the building, and additionally debris from demolition would be recycled and reused on site.

Site Access and Parking The main street-level pedestrian and accessible entrance to the building remains on Warren Avenue. The existing police station garage located underground was renovated to supply parking for 26 vehicles (or one for every unit) and is accessed via an alternating ramp from the Berkeley St. side. The existing entry to the garage on Warren Avenue was closed in efforts to eliminate any dangerous and heavy traffic areas for pedestrians. The Right: Photo of the communal courtyard space furnished with decor specified by Philippe Starck 61

Converting the Old to New The Architectural Design and Detailing

Above: Lower Level Parking Plan

Warren Street facade rendering after rehabiilitation of masonry, replacement of windows and redesigned hardscape.

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surrounding sidewalk conditions were also enhanced and curb-side parking is provided for South-End resident permit holders.

Urbanica concluded and conveyed to the community that ultimately the redevelopment of D4 into residential units would have less of an impact on traffic than retail or office use. Since residents in the area generally commute on foot or by public transport to work, peak traffic times would also be minimally affected.

The existing Grey St. facade was open with a courtyard unit designers proposed this infill and enclosed interior courtyard

Above: First Floor Plan 63

Converting the Old to New The Architectural Design and Detailing

Left: Second and third floor plans showing unit layout and open courtyard and Fourth Floor Plans showing green roof and glass skylight as well as the four top floor units

64

Exterior Historic Rehabilitation The integration of the old and the new was one of the main philosophies behind the rehabilitation of the D4 building and something that Urbanica was extremely experienced and good at.

Before an estimate on the construction could be made, a field survey of the exterior of the existing structure had to be done to determine to what extent the building, built in 1931, had to be repaired.

It was concluded that the materials, brick, cast-stone, & granite, were to be cleaned, repointed, routed, patched, regrouted, disassembled and anchored as necessary.

All metal-frame windows and doors were also to be removed and a paint study done to determine the original frame colors that were chosen when the police station was built.

Above: Sketch of Proposed Gray Street facade infill depicting channel glass, railings and metal panels.

At the same time the windows and doors would be removed, treatment of all lintels would be done, while flashing was removed and re-detailed.

65

Converting the Old to New The Architectural Design and Detailing

Gray Street Addition The largest intervention to the existing building was implemented on the Gray Street side of the building. The existing one and two story elevations were designed to have a two and three story addition so that the building height would be consistent with the cornice line of the abutting structures.

The infill addition in the center of the Gray St. facade was constructed using translucent channel glass, glass guard rails and metal panels. The height of the Atelier 505 was a controversial topic of concern in the Ellis community, and the height restrictions of the new development seemed to again be the main concern of the public.

This infill addition was among the only few community questions raised regarding the proposed construction plans. Surrounding Left: Second and third floor plans showing unit layout and open courtyard and Fourth Floor Plans showing green roof and glass skylight as well as the four top floor units 66

metal-frame windows and doors to be removed and a paint study done to determine the original frame colors. new lintels and metal frame windows were installed brick, cast-stone, & granite, were to be cleaned, repointed, routed, patched, regrouted, disassembled and anchored where necissary.

original bronze police station entry doors were cleaned and reused as the main pedestrian entry

67

Converting the Old to New The Architectural Design and Detailing

Above Clockwise from top right: Photos of furnished units along the Grey Street facade. These units were new construction designed to be “Nature inspired units� by Starck. Living room, Kitchen, Master Bedroom, and guest bathroom.

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property owners on Gray St. were concerned that their property values would decrease due to the obstruction of light that would potentially reach their already low lit alley way. Through multiple community meetings, Urbanica made a point to assure the residents that the proposed construction would adhere to the local zoning and not pursue a variance to build higher and that the addition would be consistent with the surrounding buildings.

Converting Old to New Learning Objectives Was the community satisfied with their communication and design input with the developer and Yoo Ltd.?

Could Urbanica Inc. have done any more to ensure cooperation with the community and surrounding neighbors?

Should the finishes and unit sizes have been scaled back or reconsidered based on impending market changes?

If unit sizes remained the same, could finish materials have been changed or reconsidered to maintain the project budget?

Could the project have been more successful if the renovation consisted of a higher number of units (smaller square footage each)?

69

Problems on the Horizon The Construction Process in an Unstable Economy

70

Original RFP - June 2003

Small Proj. Review - July 2004

Units: 24

Units: 26

Parking Spaces: 26

Parking Spaces: 28–35

Unit Types: (8) 1 Bedroom (8) 2 Bedroom (8) 3 Bedroom

Unit Types: (7) 1 Bedroom (18) 2 Bedroom (1) 3 Bedroom

Gross Square Footage: 38,860

Gross Square Footage: 41,806

Net Square Footage: 28,689

Net Square Footage: 32,592

Changes Made Between the RFP and the Small Project Review After being chosen by the BRA as the developer for the former D4 police station, Yoo D4 Urbanica began their Small Project Review Application. This document was submitted to the BRA in July of 2004, eight months after the candidate selection.

Between the original submittal and the Small Project Review Application, some minor objective and programmatic changes took place with the project, as seen in the chart to the left.

In addition to these basic programmatic changes, other additions and cuts were made to the project. In the original submission in response to the RFP, Yoo D4 Urbanica named Frederick Stahl at Burt Hill Kosar Rittelman Associates as the architect of record on the project. The proposal noted “an award winning architecture firm, Burt Hill Kosar Rittelmann with Fred Stahl at Burt Hill as one of the most

respected preservation architects...�

In the Small Project Review Application, the architect of record had been changed to The Architectural Team.

When asked about the switch from Burt Hill to The Architectural Team, developer Kamran Zahedi responded that the original architect of record wanted to be highly involved in the design process, whereas Zahedi wanted only his company, Urbanica, as well as Philippe Starck to be the only members with design input in the project.

Another change to be noted between the original submittal and the Small Project Review Application is the project timeline.

The original timeline on the response to the RFP stated that the project timeline would be 18 months, which, as seen in the graph on page *********, was longer than the other submittals.

12 months, with an estimated completion of November 2005.

The timeline on the following pages illustrates important dates and also the instances in which the construction schedule fell behind.

By the time the Small Project Application was submitted, the timeline proposed by Martini Construction had been reduced to

71

EXTENDED CONSTRUCTION PROPOSED TIMELINE

Novembe Septem

October 2003 - Schematic Design Complete

October 2005- Certificate of Occupancy Certificate of Completion December 2003 - Design Development Complete December 2003 - Utility and Property Survey Complete February 28 2008 - All Permits (except bldg.) Approved

March 2004 - Construction Documents Complete March 2004 - Specs Complete October 2005 - Construction Complete April 1 2004 - Small Project Approval (Atricle 80) Completed

Sept 24 2003 Community deadline for comments on 8 submittals

April 162003 - BRA holds meeting to discuss RFP with community

Nov 18 2003 - Community voices frustration at BRA’s choice of Urbanica as D4’s developer

August 7 2003 - South End News prints article with detailed info and renderings from eight proposals

July 15 2003 - Deadline for response to RFP. Receipt of 8 proposals from local developers

Sept 24 2003 BRA begins review process of eight proposals

July 15 2003 - Deadline for response to RFP. Receipt of 8 proposals from local developers

Nov 18 2003 - BRA chooses D4 Development from a pool of eight bidders for the former D4 Police Station rehab

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Nov 6 2003 Community voices support for New Boston Proposal for D4 Site

October 2007 - Actual Certificate of Occupancy Issued

Feb 1 2008 - Four of seven remaining condos on the market reduce asking price by $100,000

January 23 2007 - Exterior work completed and scaffolding has been removed. Sales are proceeding

er 2006 - Developer projects occupancy by Spring 2007 mber 2006 - Condo prices cut in cooling market June 2005 - Boston Homes Newspaper reports marketing begins on D4 condos. At this time, occupancy is set to begin in fall 2006.

January 2007 - Coldwell Banker introuces marketing relaunch of D4 after Gibson Domain contract expires

March 26, 2007 - Ellis Neighborhood Association Requests Reopening of public sidewalks surrounding D4

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Problems on the Horizon The Construction Process in an Unstable Economy

BRA Meeting Minutes Tell the Story

January 20, 2005 Meeting with the BRA

During the course of the project, the D4 Development Limited Partnership held regular meetings with the BRA in order to keep the Boston Redevelopment Authority informed as to the progress and changes made within the project.

During the January 20, 2005 meeting between the BRA and D4 Development Limited Partnership, the redeveloper listed Payton Construction as the general contractor. This was changed from the initial documents in which Martini Construction was listed as the general contractor.

According to the redeveloper, the general contractor was changed from Martini to Payton because of advice received from the lawyer for the partnership. The lawyer and one of the general partners advised the redeveloper to change to Payton Construction because a mutual friend of the partners had previously worked with Payton and developed a strong relationship with the company.

The developers were careful to stay within the boundaries initially set forth by the BRA in the Request for Proposal, however, many changes did occur.

The following three meetings that will be expounded upon in this chapter call out key dates at which certain players were part of the project, and dates when these players were no longer involved in the development of the former D4 police station. By deriving these changes from the dates, the puzzle can begin to be pieced together that will tell the story of the development of the project from beginning to end.

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As of the January meeting, D4 Development LP had agreed on a maximum construction price of $9,069,221 with Payton Construction. The contract between the two parties was still under negotiation at

the time of the BRA meeting.

At this time, the working drawings and specifications were submitted for approval by the BRA. The redeveloper demonstrated the financial ability to complete the project in January of 2005 as well.

Gibson Domain|Domain was the real estate agent and was in charge of the marketing of D4 from the project’s inception through this meeting. They continued to provide real estate and marketing services to D4 until their contract expired, at which time another real estate agent took over the operations.

May 31, 2007 Meeting with the BRA By the time this meeting was held, the project was a year and a half over the original time schedule laid out by Martini Construction.

Payton Construction had informed the

redeveloper that construction would not cost $9,069,221 as was agreed upon, but instead would cost over $16 million to complete. In addition to a nearly doubled budget, Payton said they could not complete the work in the specified time that they had initially agreed upon with D4 Development LP. When the redeveloper was told of these circumstances, he immediately released Payton Construction of their duties, and took over the general contracting of the D4 project by using his company, Turnkey Construction, as the contractor instead.

A BRA document states that, “In the best interest of the project, the redeveloper had to replace Payton Construction who proceeded to go bankrupt”.

Turnkey Construction was Kamran Zahedi’s original company before he founded Urbanica Inc. The redeveloper was fortunate to be able to fall back on his experience and skills as a general contractor 75

Problems on the Horizon The Construction Process in an Unstable Economy

during a time when the D4 project was facing major delays.

Because of the delays, the project was not completed on schedule in November of 2005. At the same time that the project was supposed to be completed, the housing market began to fall sharply. Facing budget shortages because of delays and because of the housing market, D4 Development LP was determined to forge ahead to complete the project as quickly as possible without sacrificing the original design and quality intent.

By this time, because of the unexpected delays, the contract between D4 Development LP and Gibson Domain|Domain had expired. Coldwell Banker began marketing the units for immediate sale. The expected completion date of the project at this time was June 2007, only a month after the meeting was held.

At the meeting, the D4 Development LP 76

asked the BRA to issue partial completion certificates for units two through twentyfour. The BRA granted this request and the sale of the units slowly continued.

January 10 2008 Meeting with the BRA A month before the January 10 2008 meeting with the BRA, the redeveloper notified the Authority that the project had a $3 million financial gap because of construction delays, higher than anticipated construction costs and unforeseen housing market conditions. As a result, the developer requested that the BRA allow them to market one-less affordable housing unit in the D4 property (two instead of three).

To partially make up for not meeting the minimum requirement for affordable units, the D4 Development Limited Partnership asked the BRA if it would be acceptable to contribute $150,000 to the Upton Street Pine Street Inn Single Room Occupancy

$9,068,221 to $16,457,281. units. The $150,000 would pay for the construction of two single occupancy rooms and would help to offset the homeless population in the South End, while allowing the D4 Development LP to gain more profit on the sale of one of the previously designated affordable units.

The BRA agreed to the proposal, and the project was completed with 23 market rate units, and two affordable units.

The final unit sizes ranged from 770 square feet to 3,500 square feet, a large jump from the initially proposed 700-2000 square foot residences proposed.

At the conclusion of the project, and stated in the January 10 2008 meeting with the BRA, the redeveloper released the figures of the project, stating that the original development cost of $17,259,328 had been far exceeded, reaching $27,464,385. The original construction budget had almost doubled from

The BRA meeting minutes summarize the project in one short paragraph as follows: “As a result, the D4 Development Limited Partnership has a financial gap of approximately $3,000,000 after being delayed over a year by Payton Construction, the unforeseen housing market conditions, and a substantial increase in the cost of construction materials and labor. The delays in the D4 project resulted in huge soft cost legal costs, and marketing strategies that resulted in spending substantially more time and money on marketing the units.�

Was the Community Opinion Ignored?

Due to many unforeseeable changes in the project, including aforementioned market crashes and construction delays and cost increases, the D4 Development LP was forced to cut prices of the condos in order to sell them.

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Problems on the Horizon The Construction Process in an Unstable Economy

In 2003, when the decision making process was still in the hands of the BRA, community members voiced their opinions for their developer choice at various meetings held with the neighborhood, the BRA, and the redeveloper. In an article from the South End News, residents asked about affordable housing issues. “Why not do more? Which units were affordable? What about what one man called the ‘disappearing middle class in the South End,’ who aren’t eligible for affordable housing but can’t afford $500 a square foot?”

If the community was concerned about residences being sold for the high price of $500 per square foot, why didn’t the BRA listen? Why instead, did they choose a developer who set the price tag at nearly $1000 per square foot?

An excerpt from a South End News story reads, “The BRA will evaluate the developers on several important criteria, including how close the team come to the RFP’s guidelines, the creation of home 78

ownership opportunities and maximization of the affordability component, how the developer can finance the bud, whether it’s financially feasible, and if their past projects have been successful.”

If these were the guidelines by which the BRA made their decision, how did they ignore the proposal which offered 20% affordable units? And why did they choose the developer with one of the highest price per square foot estimates?

Cutting Prices An article in the Boston Globe from September 16, 2006 is titled “Starck Team Cuts Prices in Cooling Condo Market”.

The article reports that the project was “struggling to sell their luxury units in a stagnant market and have dropped their asking prices an average of 12% and hired a new real estate agent.” It reads, “The Boston project faltered amid a cooling real estate market, construction delays, and criticism by brokers that the

prices were too high.” As of September 16 2006 when the article was written, there had been two sales out of the reported 26 units in the building. In an article from the Boston Globe written in May 2006, the writer reported that the development had buyers interested in purchasing six of the units, while none of the six agreements were contractual. This article was written after an article from June 25, 2005, in which the Boston Globe reported that four of the six originally released units for sale by Gibson Domain|Domain had deposits on them. “Dan LaBarre, a South End agent...said D4’s main problem was always the unit prices. With some priced as high as $950 per square foot, they were well above prices even in the trendy South End.” As the new listing agent, Coldwell Banker plans to reduce the price of one of the penthouse units from $1.77million to $1.71 million. Another unit will be reduced from $670,000 to $600,000.

The lack of sales by Gibson Domain|Domain might not have been through any fault of the company, who claims that they recommended price reductions of between 15% and 18% to the redeveloper.

Despite the hardships experienced during development and construction, the D4 remained popular in the community, gaining the title of Favorite New Boston Condo Development in an article written on May 13, 2007. At this time, there were eight condos remaining for sale.

Two months later, on July 23 2007, the same website reported that there were six units still for sale. However, on August 27, 2007, while reporting that the dumpsters outside the former D4 Police Station had finally been removed, the article

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Problems on the Horizon The Construction Process in an Unstable Economy

said there were eight units remaining.

It is unclear whether two of the pending sold units fell through or whether the data in the article is inaccurate, however the sales of the final units after the initial marketing push seemed to be slow.

On October 17, 2007, seven condos remained for sale, priced between $669,000 and $3,200,000 (for the penthouse).

An article from The Boston Condo Blog, dated October 7, 2008, is titled “Only One Left at D4”. Ten months after their final meeting with the BRA, there was still one unit on the market for sale. The article states that the condos at D4 saw several price reductions over the summer. Additionally, 285 Columbus Lofts was completed, introducing heightened competition for the former police station renovation.

Shortly after the October 17 report of seven condos remaining, the Boston Condo Blog reported that three of the seven remaining units reduced their prices.

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The penthouse is down from $3.2 million to $2.9 million, nearly a 10% reduction.

Two other units decreased their prices.

The unit on the left of the building (unit 6) has enormous garage windows where the garage on the police station used to be located. Originally priced at $1,385,900, the price was reduced to $1,299,900.

The third unit, number one, is a first-floor corner unit with the only private entrance in the building, located on Berkeley Street. This unit dropped in price from $1,399,900 to $1,299,900.

On December 1, 2007, it is reported that the “development team chopped prices” on two units. Both units 5 and 13 dropped $100,000 in price, reducing the price of each to just over $600 per square foot.

Due to the price reduction in the two units, the parking spaces that belonged to each were no longer included in the purchase.

Instead, these parking spaces are being offered separately for $70,000-$90,000 each. At this time, the penthouse unit was reportedly under agreement for purchase

after it’s earlier price reduction in October.

Interestingly, in the same posting, the Boston Condo Blog reported that the 270 Clarendon Street condos saw a $200,000 price increase despite the units having been on the market for over 500 days total. Also, 143 Beacon Street, a five unit development increased their priced by $400,000.

On February 1, 2008, the Boston Real Estate Observer wrote that seven condos were still available at D4, and four of them were reduced in price by $100,000. This, again, was largely due to the removal of parking spaces from the listings. The Boston Condo Guy reported that at this time, the units have been on the market for between 97 and 450 days, far over the amount of time that any of the development team had expected.

A short excerpt on May 14, 2008 reports that the D4 development is down to three remaining units.

And five months later, on October 7, 2008, the last remaining unit is on the market. A 1,426 square foot unit with two bedrooms and two bathrooms, the price was listed at $835,000, or $586 per square foot. This number is significantly lower than the original estimates of nearly $1000 per square foot.

Although it may seem that the sales of D4 had finally come to an end, only one month later, on November 5, 2008, the Boston Condo Blog reported that the first resale unit at D4 was up for sale. Unit 11, a 798 square foot one-bedroom, onebathroom condo, was priced at $729,000 ($914 per square foot). This price does not include condo fees of $651 per month.

Additional Hardships One of the unclear aspects of the D4 project was its relationship with the Parris Landing project in the nearby Charlestown Navy Yard. When the developer was 81

Problems on the Horizon The Construction Process in an Unstable Economy

asked in an interview whether he brought on Starck and Yoo Ltd. because of the Parris Landing project and its success, Zahedi replied that the developer of that project took his idea of bringing Starck on after the D4 project was begun.

However, a Boston Globe article written on May 9, 2006 reads “Another theory is that Starck was overexposed in Boston by heavy 2005 marketing of his other local project, Parris Landing in the Charlestown Navy Yard. Of 367 units at Parris Landing, 310 sold in 18 months, said the broker, Boston-based Otis & Ahern. Parris Landing was Starck Lite: Starck provided an optional design package for condo interiors, but his primary contribution was to common areas, where he included sculptures such as the lobby’s oversized rubber duck.”

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Problems on the Horizon Learning Objectives Did the project initially do enough research into the future housing market? Or was the unfortunate timing a result of the construction delays?

If construction had not been delayed for over a year because of Payton Construction, would the units have sold more quickly?

Would they have gone under as many price reductions as they did?

Real estate agents said that because the project was initially overpriced, it missed out on the sizzling 2005 condo market. Developers typically raise prices as a project attracts interest during construction and builds sales momentum. But some of YooD4’s asking prices have been lowered since last summer. The highest-priced unit, 22, is currently on the market for $1.71 million, down from $1.77 million in July, according to downtown real estate listings. The price of the two-bedroom Unit 13 was cut $200,000, to $1.1 million.

Could the units have been marketed earlier in the project to sell them before the market cooled?

What was the profit margins on the units? Could the initial prices have been lower to still generate a profit and maximize sales? Lowering prices often insinuates that there is a reason the units are not selling, lowering overall interest, and hurting initial sales.

Was the change from 3 affordable units to only 2, and the additional money donated to Pine Street Inn. an acceptable change for the developer to make when faced with a budget deficit during a project.

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References References Keith, John. “Remaining Homes in South End’s D4 Condo Development Repriced”. The Boston Real Estate Blog. September 17, 2008.< http://www.bostonreb.com/2008/09/remaining-homes-in-south-ends-d4-condo-development-repriced/ >.

Boston Real Estate Observer. “Exclusive D4 Condo Photos”. The Boston Condo Blog. October 18, 2007. < http://www.boston-condos-for-sale.com/2007/10/18/exclusive-d4-condo-photos/ >.

Blanton, Kimberly. “Starck Team Cuts Prices in Cooling Condo Market”. The Boston Globe. September 16, 2006. < http://www.boston.com/business/globe/articles/2006/09/16/starck_team_cuts_prices_in_cooling_condo_market/ >.

“Designer Moves Beyond ‘Fancy Architecture’”. The Boston Globe. July 17, 2005. < http://www.boston.com/business/globe/ articles/2005/07/17/designer_moves_beyond_fancy_architecture/ >.

Cassidy, Tina. “Arresting Development: Brand Name Design is the Key to Selling Pricey Condos Now Taking Shape in Former Boston Police Station”. The Boston Globe. June 26, 2005. < http://www.boston.com/news/local/massachusetts/articles/2005/06/26/br… ling_pricey_condos_now_taking_shape_in_former_boston_police_station/ >.

Jackson, Marilyn. “Marketing Begins for YooD4 by Starck”. Boston Homes: The Complete Guide. June 18-24 2005, p. 1, 16.

Palmer, Thomas C. Jr.”From ‘Under Arrest’ to Possibly Arresting”. The Boston Globe. August 29, 2003. < http://www.boston.com/ business/globe/articles/2003/08/29/from_under_arrest_to_possibly_arresting/ >.

Hector, Wendy. “South End Surgery”. Scene Magazine. Feb-March 2004, p. 24-25.

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Reidy, Chris. “City Back Designer’s Proposal”. The Boston Globe.November 19, 2003. < http://www.boston.com/business/globe/ articles/2003/11/19/city_backs_designers_proposal?mode=PF >.

“Mayor Thomas M. Menino Releases “Request for Proposals” for old Bates School”. Boston Redevelopment Authority. May 28, 2003. < http://www.bostonredevelopmentauthority.org/press/PressDisplayFriendly.asp?TPressID=164 >.

“BRA Taps Developer for Area D4 Police Station”. Boston Business Journal. November 18, 2003. < http://boston.bizjournals.com/ boston/stories/2003/11/17/daily21.html?t=printable >.

Meeting Minutes. Ellis Neighborhood Association, Open Board Meeting. November 28, 2006. YWCA Residence - 40 Berkeley Street.

Meeting Minutes. Ellis Neighborhood Association, Open Board Meeting. January 23, 2007. YWCA Residence - 40 Berkeley Street.

Meeting Minutes. Ellis Neighborhood Association, Open Board Meeting. March 26, 2007. YWCA Residence - 40 Berkeley Street.

Meeting Minutes. Boston Redevelopment Authority. Board of Directors’ Meeting. August 5, 2004.

Meeting Minutes. Boston Redevelopment Authority. Board of Directors’ Meeting. December 4, 2003.

Meeting Minutes. Boston Redevelopment Authority. Board of Directors’ Meeting. December 21, 2004.

Meeting Minutes. Boston Redevelopment Authority. Board of Directors’ Meeting. January 20, 2005.

Meeting Minutes. Boston Redevelopment Authority. Board of Directors’ Meeting. May 31, 2007.

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References

Meeting Minutes. Boston Redevelopment Authority. Board of Directors’ Meeting. January 10, 2008.

“D4 Luxury Boutique Condominium Set to Begin Closings Next Week”. Back Bay Blogger. October 5, 2007. < http://www.artrawding.com/blog/2007/10/05/d4-luxury-boutique-condominium-set-to-begin-closings-next-week/ >.

Jackson, Marilyn. “D4 Police Station Has 26 Condos, A Winter Garden”. Boston Homes; The Complete Guide. September 30-October 6, 2006, p. 1, 36.

“First Resale at D4 Condos”. The Boston Condo Blog. November 5, 2008. < http://www.boston-condos-for-sale.com/tag/warrenavenue-condos/ >.

Blanton, Kimberly. “Designer’s High-Concept Condos May be Too Hip for Hub”. The Boston Globe. May 9, 2006. < http://www.boston.com/realestate/news/articles/2006/05/09/designers_high_concept_condosmay_be_too_hip_for_hub/ >. “$100k Price Changes at D4 Condos”. The Boston Condo Blog. February 1, 2008. < http://www.boston-condos-for-sale. com/2008/02/01/100k-price-drops-at-d4-condos/ >.

Baird, Susanna. “Police Station Transformation; Eight proposals submitted for old D4 building”. The South End News. July 31, 2003, p. 1, 10-11.

Baird, Susanna. “Old D4 Station Debated; Public questions potential developers”. The South End News. September 11, 2003, p. 3, 8.

Tucker, Franklin B. “Developers Line up For Chance at D4”. The South End News. May 1, 2003, p. 2.

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Baird, Susanna. “Best Face Forward; Developers tout their Warren Avenue Proposals”. The South End News. August 7, 2003, p. 1, 7.

Rapp, Andrew. “Good Choices for Old D4 Station”. The South End News. November 6, 2003, p. 6.

Baird, Susanna. “BRA taps Yoo/Urbanica, New Atlantic for South End Redevelopment Projects.” November 20, 2003, p. 1, 13.

Meeting Minutes. Boston Redevelopment Authority. Board of Directors’ Meeting. January 10, 2008.

“D4 Luxury Boutique Condominium Set to Begin Closings Next Week”. Back Bay Blogger. October 5, 2007. < http://www.artrawding.com/blog/2007/10/05/d4-luxury-boutique-condominium-set-to-begin-closings-next-week/ >.

Jackson, Marilyn. “D4 Police Station Has 26 Condos, A Winter Garden”. Boston Homes; The Complete Guide. September 30-October 6, 2006, p. 1, 36.

“First Resale at D4 Condos”. The Boston Condo Blog. November 5, 2008. < http://www.boston-condos-for-sale.com/tag/warrenavenue-condos/ >.

Blanton, Kimberly. “Designer’s High-Concept Condos May be Too Hip for Hub”. The Boston Globe. May 9, 2006. < http://www.boston.com/realestate/news/articles/2006/05/09/designers_high_concept_condosmay_be_too_hip_for_hub/ >. “$100k Price Changes at D4 Condos”. The Boston Condo Blog. February 1, 2008. < http://www.boston-condos-for-sale. com/2008/02/01/100k-price-drops-at-d4-condos/ >.

Baird, Susanna. “Police Station Transformation; Eight proposals submitted for old D4 building”. The South End News. July 31, 87

References 2003, p. 1, 10-11.

Baird, Susanna. “Old D4 Station Debated; Public questions potential developers”. The South End News. September 11, 2003, p. 3, 8.

Tucker, Franklin B. “Developers Line up For Chance at D4”. The South End News. May 1, 2003, p. 2.

Baird, Susanna. “Best Face Forward; Developers tout their Warren Avenue Proposals”. The South End News. August 7, 2003, p. 1, 7.

Rapp, Andrew. “Good Choices for Old D4 Station”. The South End News. November 6, 2003, p. 6.

Baird, Susanna. “BRA taps Yoo/Urbanica, New Atlantic for South End Redevelopment Projects.” November 20, 2003, p. 1, 13.

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