Jim Stergios: Time to stop Boston mega-project mania

 

One of Goya's Titan paintings.

BOSTON

Last year it was a billion-dollar expansion of the Boston Convention and Exhibition Center, with an embedded $110 million giveaway to a hotel developer. This year it was the recently abandoned Boston 2024 Olympic bid. Now we’re talking about digging a tunnel to connect North and South Stations. Boston has a mega-malady, and it is a love affair with mega-projects.

Modern-day Massachusetts is acquiring a variant of French political sophistication, whereby Boston (Paris) is the showpiece and the rest of the state (France) is relegated to flyover status. Here are three quick facts to waken us from our dangerous flirtation with economic development in the grand continental style. The MBTA — buried under nearly $9 billion in debt and interest, and with a maintenance backlog of more than $7 billion — should focus on avoiding a replay of last winter’s horror story. A new tunnel does not make the MBTA’s list of top priorities.

Often lost in the heated discussions of particular parcels is the bigger question of what kind of a city we want to be. Cost realism has in the past reined in Boston’s appetite for megaprojects. In essence, that is what happened when the governor and legislative leaders commissioned a third-party evaluation of the Boston 2024 effort.

Former Gov. Michael Dukakis argues that the North-South Rail Link should be buildable for $2 billion, not the estimate of $8 billion. It should cost less, but it will cost more. We just learned that the Green Line extension is $1 billion over budget. No one has forgotten that the Big Dig was supposed to cost $2.8 billion, but ultimately broke the $15 billion sound barrier.

Cost estimates aren’t the only problem. Project benefits are routinely oversold. Exhibit A: The unrealistic pictures painted by convention center feasibility studies are legendary. The BCEC is doing between 30 and 40 percent of the business it was projected to do. Exhibit B: The Greenbush commuter rail line. Instead of, as projected, taking eight passengers off highways for each one lured from the MBTA’s South Shore commuter boat service, nearly half the current customers previously took the ferry. When those who rode other commuter rail lines are added in, more than 60 percent of Greenbush riders were already using public transit.

Rather than Boston’s mega-project megalomania, we need to return to a good old American sense of fair play. When Gov. Charlie Baker pulled the plug on the proposed BCEC expansion, he created an opportunity to do just that. Each year, tourism-related taxes generate tens of millions of dollars to underwrite the Massachusetts Convention Center Authority. Between now and 2034, these taxes will provide the MCCA with $30 million more annually than it needs to operate. After 2034, when the bonds sold to pay for the construction of the BCEC are paid off, that amount will more than double.

Anyone who has spent time in Massachusetts cities outside Boston knows that they have significant infrastructure needs, including roadways, retail spines, bridges, and sidewalks. For years the Big Dig left these cities starved of investment; it takes no sophistication to understand that the litany of Boston mega-project proposals would continue that trend.

Cost estimates aren’t the only problem.Project benefitsare routinely oversold. Infrastructure upgrades will not, by themselves, refashion the futures of Massachusetts’ cities. But together with reforms to public schools, policing, and economic policies, state investment can go a long way toward making them more attractive places to live and work. In fact, creating an infrastructure fund for these cities to leverage needed reforms would prove a powerful urban revitalization strategy.

Greater Boston needs its fair share of infrastructure investments — and right now MBTA upgrades are what can do the region the most good. State government must keep in mind, however, that more than half of the state’s population is outside Route 128. Forgoing an $8 billion Boston mega-project would allow infrastructure upgrades across Massachusetts.

Jim Stergios is executive director of the Pioneer Institute, a Boston­-based think tank. This piece originated in The Boston Globe.

Charles Chieppo: Boston convention centers follies

  By CHARLES CHIEPPO

BOSTON

Rarely is Massachusetts state government’s dysfunction on display more than in the waning days of a legislative session. This time around, exhibit A is the rush to approve a $1.1 billion expansion of the Boston Convention and Exhibition Center (BCEC) despite enough red flags to fill the quarter-mile-long building.

Apparently the $620 million the Massachusetts Convention Center Authority claims the BCEC and the Hynes Convention centers pumped into the local economy last year makes it easy to set aside doubts. But a closer look at how the MCCA arrives at that estimate makes you realize why there are no real numbers in the convention industry.

Convention centers are designed to attract people from outside the area who wouldn’t otherwise spend money here. But one thing the industry doesn’t want you do know is that about half of convention attendees — whether in Boston or elsewhere — are generally locals who’d be spending their dollars at a nearby mall if they weren’t eating in a Seaport District restaurant. It’s no accident that the number of hotel room nights generated by the BCEC and the Hynes is less than the number of people who attend events at the facilities; many of the attendees sleep in their own beds at night.

Yet when Pioneer Institute obtained a description of the methodology by which the MCCA derives its economic impact number, we discovered that it includes a “dollars saved” category and assumes “the in-state attendee would have attended the event regardless of location.” Believe it or not, the MCCA actually pretends that every local attendee at a BCEC or Hynes convention would still have gone if it were held in Las Vegas or Orlando, and the authority includes the savings as part of its “economic impact.”

Did that $620 million number just lose a zero?

The economic-impact follies are just the latest in a line of troubling revelations about the expansion proposal. First came word that, contrary to MCCA claims, taxpayers would indeed pay a price for expansion. Receipts from taxes that flow into the Convention Center Fund and support the authority could revert to the commonwealth’s general fund once BCEC bonds are paid off in 2034. Expansion of the facility would keep that money flowing to the MCCA until about 2050, siphoning off at least $5 billion from state coffers.

Next we learned that the expansion bill doesn’t require the MCCA to go back to the Legislature if it wants to take more money from the Convention Center Fund. The waiver is akin to a blank check when it comes to the hefty public subsidy that will be needed for the 1,200 to 1,500 room headquarters hotel that is part of the expansion plan.

Finally we learned that the legislation exempts the project from state procurement and public disclosure laws. That means we might never find out how large a subsidy that new hotel will require.

Thankfully, as the Herald recently reported, Senate Bonding Committee Chairman Brian Joyce (D-Milton) thinks the BCEC expansion question requires more thought and deliberation. Let’s hope this is one time when lawmakers won’t pass a bill to find out what’s in it.

Charles Chieppo is a senior fellow at Pioneer Institute.  He is a former vice chair of the Massachusetts Convention Center Authority.