As the end of the year rolls around it is time to consider annual appointments in town. One of the appointments the town’s leaders should give careful consideration to is that of town counsel.
Kopelman and Paige have represented the town for the past 22 years or so. Replacing a then controversial David Berman around 1982, the firm was a rather small operation. With only three municipal clients, Kopelman and Paige were promoting the idea of a firm that would basically concentrate on municipal law only. Since that time it has proven to be a successful strategy as Kopleman and Paige has now grown to the point where they represent more than 100 cities and towns. That number is over one third of the communities in the state.
Has that strategy been successful for Burlington? Do we have the same type of attention from a firm in which we were the second or third most important clients to now where we are simply one of the herd?
That question is debatable but there are other questions that should be examined more closely in determining whether or not we should continue to have them represent us. Those questions revolve primarily around the biggest issues the town has dealt with over the last 7 or 8 years. Quite frankly many of those issues have significant visible failures of counsel.
Take for instance the Sun deal. In that arrangement town meeting was told that Burlington would receive the state barn property on Cambridge Street as part of the deal. Here we are six or seven years later and we are told virtually nothing about what went wrong. Now we are told we need to pay for the land and it was not in the deal. Why is this? Who was conducting the negotiations? We had special counsel in Gloria Larson and Kopelman and Paige. Who told the town we were to receive the property and who was responsible for writing the contracts? Do they have mal practice insurance?
The chapter 40B snob zoning law has been a thorn in Burlington and the rest of the suburban communities side for years. We finally made the 10% threshold but one of the concerns of the town was that those affordable units would fall off in 15 years or when the financing ended. This has always been a primary complaint yet it took a single practitioner representing the Town of Wellesley to get this issue before the Massachusetts Supreme Court. The court ruled that as long as the developer had dense zoning that circumvented a towns zoning bylaw then those units had to remain as affordable. Why could a one-man law firm accomplish this yet a firm representing over a hundred communities could not? Has counsel taken steps to assure that our current properties remain affordable?
The military housing on South Bedford Street was acquired by the town partly as a result of the Trammel Crow deal. The town meeting was told by town counsel that the affordability of the housing would be protected by a covenant on the deed. Two years ago one of the units was almost foreclosed on and the affordability almost lost. We were then told it was the banks that were protected by covenant not the town.
The Sunrise project on Mall Road went before the Board of Appeals as a use variance. The building inspector had ruled against the developer yet the board of appeals over ruled him in favor of the developer. Why did town counsel allow this to happen? State law clearly prohibits use variances. Why wasn’t the building inspector’s opinion upheld and the developer referred to Town Meeting for a zoning change? Even more importantly, when the Selectmen met to discuss the appealing of the variance what were they told about counsel’s opinion?
One of the most egregious failures of counsel has been the land swap. Part of the deal was the town receiving of buildable lots behind the Grandview farm. After selling one of the lots last year for $500,000 we are now told that the lot is not buildable because of wetlands and the town will have to be an applicant before its own boards to rectify the situation. Are the other lots subject to the same problem? Who should have been responsible for the due diligence in the handling of such a complex land deal?
Three years ago the town was in negotiation for the Marion road conservation land adjacent to the Pine Haven cemetery. At the time the town was encouraged by management to hurry and acquire the site because it was in great demand. Yet after a substantial price was negotiated for the property and money appropriated by town meeting it became known that the title to the property was murky. Why wasn’t counsel doing this due diligence before a price was arrived at? Was the price lowered as a result?
At the same time we were being encouraged to acquire this land because of demand we were being told that we needed to give tax incentives to another deal in town because demand was so weak. Now two of those incentive deals are not in compliance yet we still have no resolution. What is counsels suggestion? Do we repeal the deal? Do we eliminate the tax break?
One of the more embarrassing results for town counsel was the infamous window at the high school. A teacher was denied a window in her office and subsequently took the town to court and won a $240,000 judgment. No negotiated common ground could have been found on this issue?
I will close on the issue in the police department. Over two years ago an officer was disciplined and demoted within the department. This issue has significant financial ramifications as well as morale and departmental tranquility importance. Yet here we are two years after the initial decision still without a final resolution.
These are but a few of the issues that counsel has had less than stellar performance on. In all of these cases the town has suffered financially and might have had a better result had we had a more attentive representative. Perhaps it is time to see if someone in the legal community might place more value on the relationship.
Monday, December 27, 2004
Tuesday, December 21, 2004
Brady is human!
With the end of the year in sight and the annual holiday slowdown underway I took the liberty of staying up very late to watch the Patriots versus the Dolphins last night. I had no preconceived notions of this being a blow out because I have seen to many Dolphin/Patriot confrontations in the past to be lulled into complacency.
Even though this was supposed to be a walk over I wanted to watch every minute of it because a team like the Patriots and their current streak of excellence doesn’t come along to frequently. The two Super Bowls in three years and the incredible winning streak and the Brady/Belichik 60 game record of 46 and 14 is going to rank high in NFL history. So it was with that in mind that I settled in for the evening.
There were a number of things which should have been indications for the prudent bettor to stay away from this game. The Patriots were double digit favorites, the game was in Miami instead of the frigid Northeast and the 2 and 11 Dolphins had absolutely nothing to lose. In addition the Patriots have already clinched a playoff spot and had a few distractions most notable is that offensive coordinator Charlie Weiss is now the head coach at Notre Dame. Everyone in the Patriot family is happy for Weiss I am sure but there is no getting around the fact that Charlie must be looking ahead a little to next year.
Despite all of this the Patriots were leading comfortably by 11 with 3:59 to go when Miami took the ball on their own 32 and proceeded to march down the field and score. The two point conversion failed but Miami had closed to within five. This appeared to be no problem since the Patriots took over on their own 20 with 2 minutes and seven seconds to go. Under normal circumstances we would expect to see the Patriots gain a first down and then run out the clock.
Strangely the first play from scrimmage was an incomplete pass that was both uncharacteristically dangerous and did not run much time off the clock. The second down play was a run by Corey Dillon for a 1 yard gain. With third down and a long 9 yards for a first down, conventional wisdom would have the team run a very conservative play and then punt the ball and allow the defense to close out the game. Inexplicably, a pass play was called and for the first time in a very long time Tom Brady looked human as he made an absolutely brutal mistake. In the clutches of Miami’s Jason Taylor he winged a pass out in the flat that was picked off and Miami had the ball on the Pats 21.
The defense stiffened and held them to 4th down and 10 on the 21 yard line when A.J Feeley hit Derius Thompson over Troy Brown for the winning score. The Patriots held the ball again with time enough to drive for a winning field goal when Brady was intercepted for the fourth time.
It’s hard to find fault with a team which is 14 and 2 and has played as well as the team has this year. It is a tribute to the coaching staff and the players that they very rarely have mental breakdowns, are always prepared from a game plan standpoint and seem to consistently give a full game physical effort. Last night may have been an aberration or perhaps it has exposed some cracks in the invincibility of the Patriots.
The most obvious problem is the defensive secondary. Tyrone Poole, Ty Law and Dexter Reid have all been injured. Two of the current corner backs, Earthwind Moreland and Randall Gay have held up but can they play playoff caliber defense against the likes of Peyton Manning and the flock of fleet receivers Indianapolis has? The Troy Brown experiment at defensive back is no longer a novelty, it is now a necessity with all the injuries in the secondary. It’s was no accident that the Dolphins went after Brown on the winning score.
So the playoffs are getting closer and we still have 2 games to work out the bugs. Time will tell whether this team and the Belichik/Brady combination have the magic to bring home another Super Bowl championship.
Even though this was supposed to be a walk over I wanted to watch every minute of it because a team like the Patriots and their current streak of excellence doesn’t come along to frequently. The two Super Bowls in three years and the incredible winning streak and the Brady/Belichik 60 game record of 46 and 14 is going to rank high in NFL history. So it was with that in mind that I settled in for the evening.
There were a number of things which should have been indications for the prudent bettor to stay away from this game. The Patriots were double digit favorites, the game was in Miami instead of the frigid Northeast and the 2 and 11 Dolphins had absolutely nothing to lose. In addition the Patriots have already clinched a playoff spot and had a few distractions most notable is that offensive coordinator Charlie Weiss is now the head coach at Notre Dame. Everyone in the Patriot family is happy for Weiss I am sure but there is no getting around the fact that Charlie must be looking ahead a little to next year.
Despite all of this the Patriots were leading comfortably by 11 with 3:59 to go when Miami took the ball on their own 32 and proceeded to march down the field and score. The two point conversion failed but Miami had closed to within five. This appeared to be no problem since the Patriots took over on their own 20 with 2 minutes and seven seconds to go. Under normal circumstances we would expect to see the Patriots gain a first down and then run out the clock.
Strangely the first play from scrimmage was an incomplete pass that was both uncharacteristically dangerous and did not run much time off the clock. The second down play was a run by Corey Dillon for a 1 yard gain. With third down and a long 9 yards for a first down, conventional wisdom would have the team run a very conservative play and then punt the ball and allow the defense to close out the game. Inexplicably, a pass play was called and for the first time in a very long time Tom Brady looked human as he made an absolutely brutal mistake. In the clutches of Miami’s Jason Taylor he winged a pass out in the flat that was picked off and Miami had the ball on the Pats 21.
The defense stiffened and held them to 4th down and 10 on the 21 yard line when A.J Feeley hit Derius Thompson over Troy Brown for the winning score. The Patriots held the ball again with time enough to drive for a winning field goal when Brady was intercepted for the fourth time.
It’s hard to find fault with a team which is 14 and 2 and has played as well as the team has this year. It is a tribute to the coaching staff and the players that they very rarely have mental breakdowns, are always prepared from a game plan standpoint and seem to consistently give a full game physical effort. Last night may have been an aberration or perhaps it has exposed some cracks in the invincibility of the Patriots.
The most obvious problem is the defensive secondary. Tyrone Poole, Ty Law and Dexter Reid have all been injured. Two of the current corner backs, Earthwind Moreland and Randall Gay have held up but can they play playoff caliber defense against the likes of Peyton Manning and the flock of fleet receivers Indianapolis has? The Troy Brown experiment at defensive back is no longer a novelty, it is now a necessity with all the injuries in the secondary. It’s was no accident that the Dolphins went after Brown on the winning score.
So the playoffs are getting closer and we still have 2 games to work out the bugs. Time will tell whether this team and the Belichik/Brady combination have the magic to bring home another Super Bowl championship.
Saturday, December 18, 2004
The trend is your friend
The “trend is your friend” is a common cliché used in the financial business to indicate what side of a trade or investment decision you should be on. This is certainly an appropriate catch phrase to be using to describe where you should be in the current interest rate environment. The trend is up and before to long it is going to be apparent in any number of interest rate sensitive areas of your life.
To put a rising interest rate environment in perspective we need to go back to the height of the end of the century booming markets. These markets gains were primarily as a result of huge investment and speculation in the Internet and telecommunications arenas and the feared Y2K bug. The stock market was riding high and the Federal Reserve fearing a return of inflation began to tighten short-term interest rates to the point where it inverted against long rates. The inverted yield curve meant that short-term rates were higher than long-term rates.
In March of 2000 at the height of the Dow which was 11, 600 and the top of the Nasdaq at 5100. On April 3rd the 90-day Treasury bill was yielding 5.87% and the thirty-year Treasury bond yield was 5.84%. The yield curve can be examined during this period at this site http://www.tmpages.com/tmp55.htm#TMDB_AA U.S. Treasury daily yield curve history.
As a result of a combination of unsustainable values, rising interest rates, and corporate fraud, the markets began to severely falter and the Fed attempted to turn things around by trimming rates. By April 1 of 2001 short rates were down to 3.75%. Shortly thereafter the events of September 11, 2001 dramatically altered the economic environment. The country was dealt a severe economic blow and the Fed responded by pumping liquidity into the system and cutting rates to levels we hadn’t seen since 1958. Short-term rates subsequently bottomed out in December 2003 at .75%
Since that time we have enjoyed the benefits of a low interest rate environment. This has manifested itself in two most obvious areas. Home mortgages have been at levels not seen in many years and other big-ticket consumer financing such as automobiles and boats have been low as well. Lower short-term rates have also resulted in some very reasonable credit card rates.
The result has been a dramatic rise in home construction and correspondingly in-home ownership. More people own homes now than at any time in American history. With more people having access to cheap capital the housing market has seen a tremendous increase in values. In addition people who had a great deal of built up equity in existing homes began to access that capital through various home equity products. Refinancing of existing mortgages also producing extra money in the home budget, which has resulted in a consumer led expansion of the economy since 9/11.
Added to that has been the enormous increase in credit card debt. With low interest rates have come the ubiquitous junk mail credit card offers. No interest for 6 months, lower rates in general, low or no rate transfers of existing balances have resulted in card juggling at a rate never before seen in history. To make matters worse is the checks that an existing account holder gets in the mail every other day with encouragement to spend spend spend!
Now here comes the trend argument. The Fed raised interest rates for the fifth time this year on December 14th and more increases are likely. Just as the financial markets of 2000 were not sustainable neither are the housing markets of 2004. Residential real estate in the region is so high that any increase in mortgage rates will slow the resale and likely sharply lower the price per unit.
More importantly than just the slowing of sales is the adjustable rate mortgage that has taken on popularity during this housing boom. As rates rise and place more pressure on the home budget we are likely to see this take its toll in the form of home foreclosures. This is inevitable, as lowered prices will prevent a homeowner from selling the property to get out from under the debt burden.
Of course credit card debt will have an enormous role to play as well. These rates may be low now but in most card agreements those rates can jump literally within a matter of days.
Finally we have the added burden of the demographics of the baby boomers. This group has generally wreaked havoc on the country at every level of their lives. Now they are about to make perhaps the most dramatic impact of all. Certainly social security is one example but so to is the northeast housing market. As these people enter their golden years and want to cash in their homes and head to sunny areas of the country we are going to see an enormous shift in property values. Where they leave will drop in value and where the end up will increase in value.
So kids, the trend is your friend. Lock in your variable rates, start paying down your debt as soon as possible and start looking at Florida and Arizona real estate.
To put a rising interest rate environment in perspective we need to go back to the height of the end of the century booming markets. These markets gains were primarily as a result of huge investment and speculation in the Internet and telecommunications arenas and the feared Y2K bug. The stock market was riding high and the Federal Reserve fearing a return of inflation began to tighten short-term interest rates to the point where it inverted against long rates. The inverted yield curve meant that short-term rates were higher than long-term rates.
In March of 2000 at the height of the Dow which was 11, 600 and the top of the Nasdaq at 5100. On April 3rd the 90-day Treasury bill was yielding 5.87% and the thirty-year Treasury bond yield was 5.84%. The yield curve can be examined during this period at this site http://www.tmpages.com/tmp55.htm#TMDB_AA U.S. Treasury daily yield curve history.
As a result of a combination of unsustainable values, rising interest rates, and corporate fraud, the markets began to severely falter and the Fed attempted to turn things around by trimming rates. By April 1 of 2001 short rates were down to 3.75%. Shortly thereafter the events of September 11, 2001 dramatically altered the economic environment. The country was dealt a severe economic blow and the Fed responded by pumping liquidity into the system and cutting rates to levels we hadn’t seen since 1958. Short-term rates subsequently bottomed out in December 2003 at .75%
Since that time we have enjoyed the benefits of a low interest rate environment. This has manifested itself in two most obvious areas. Home mortgages have been at levels not seen in many years and other big-ticket consumer financing such as automobiles and boats have been low as well. Lower short-term rates have also resulted in some very reasonable credit card rates.
The result has been a dramatic rise in home construction and correspondingly in-home ownership. More people own homes now than at any time in American history. With more people having access to cheap capital the housing market has seen a tremendous increase in values. In addition people who had a great deal of built up equity in existing homes began to access that capital through various home equity products. Refinancing of existing mortgages also producing extra money in the home budget, which has resulted in a consumer led expansion of the economy since 9/11.
Added to that has been the enormous increase in credit card debt. With low interest rates have come the ubiquitous junk mail credit card offers. No interest for 6 months, lower rates in general, low or no rate transfers of existing balances have resulted in card juggling at a rate never before seen in history. To make matters worse is the checks that an existing account holder gets in the mail every other day with encouragement to spend spend spend!
Now here comes the trend argument. The Fed raised interest rates for the fifth time this year on December 14th and more increases are likely. Just as the financial markets of 2000 were not sustainable neither are the housing markets of 2004. Residential real estate in the region is so high that any increase in mortgage rates will slow the resale and likely sharply lower the price per unit.
More importantly than just the slowing of sales is the adjustable rate mortgage that has taken on popularity during this housing boom. As rates rise and place more pressure on the home budget we are likely to see this take its toll in the form of home foreclosures. This is inevitable, as lowered prices will prevent a homeowner from selling the property to get out from under the debt burden.
Of course credit card debt will have an enormous role to play as well. These rates may be low now but in most card agreements those rates can jump literally within a matter of days.
Finally we have the added burden of the demographics of the baby boomers. This group has generally wreaked havoc on the country at every level of their lives. Now they are about to make perhaps the most dramatic impact of all. Certainly social security is one example but so to is the northeast housing market. As these people enter their golden years and want to cash in their homes and head to sunny areas of the country we are going to see an enormous shift in property values. Where they leave will drop in value and where the end up will increase in value.
So kids, the trend is your friend. Lock in your variable rates, start paying down your debt as soon as possible and start looking at Florida and Arizona real estate.
Thursday, December 16, 2004
So long Pedro
It was with mixed emotion I greeted the news of Pedro Martinez imminent signing as a free agent with the New York Mets. It is difficult to see Martinez leave the team after his being an integral part of the one Red Sox World Series championship team in my lifetime. That plus the seven seasons of purely brilliant pitching performances he provided us during his career here.
At the peak of his dominance he was pure artwork. Certainly he had over powering stuff but many have had physical skills in major league baseball and failed. He combined power and finesse with an equally impressive pitching strategy. When a batter faced Pedro they couldn't count on anything at any time. If a batter thought he might see the fastball then the nasty change up would be on its way. Similarly if the batter looked for a slider away a hard one inside might stand him up. Pedro had command of four pitches and he used them as he wished.
Breaking in with the L.A. Dodgers in 1992 for two appearances, his major league career blossomed in his final year of 4 seasons in Montreal in 1997. His stats were tremendous and resulted in a CY Young award. In 31 starts that year and 241 innings pitched, Pedro had 17 wins and 8 losses with 13 complete games, 305 strikeouts and an incredibly stingy E.R.A. of 1.90. That puts him in the same other world category as Gibson and Koufax.
In his 7 years in Boston he managed to win more than 17 on four occasions and incredibly had an E.R.A. of 1.74 in 2000. He never matched the complete game numbers only completing a high of 7 in 2000. If anything has been a chink in his armor it has been his durability in late innings. The fact that his E.R.A. has jumped to 3.90 over last year was a factor in the Sox decision making regarding a new contract.
No matter what happens in his new stint with the Mets, his career numbers of 182 wins, 76 losses and a career E.R.A of 2.71 coupled with 3 CY Young awards should be more than enough to get him into Cooperstown.
Despite all of this I think it is time for Pedro to move along. The negotiations although not particularly acrimonious took on the all to familiar trappings of today's players and agents. Respect is measured in dollars and the Mets respected Pedro with a reported 4 year guaranteed deal worth 53 million dollars. The Sox were only willing to ante up 3 years and 40 million.
Much can be said about this from both sides. Pedro is an aging super star who would have been able go out gracefully in Boston as his star dimmed. He has long been notorious for being a temperamental diva and the fans and media have given him a pass for the most part. This is not likely to happen in New York should he make a few trips to the disabled list, which would seem inevitable given his history of shoulder woes and the reported tear in his labrum.
The flip side of this of course is that we could suffer in the same way we did when the Sox let Clemens go in the "twilight" of his career. Of course Clemens has started 257 games since then and won 136 of them not to mention more CY Young awards and some championship rings. Clemens should thank the Sox for letting him go as it resulted in him getting a wake up call and finally getting himself in decent shape after his last four very mediocre years in Boston.
Clemens physically is a bull of a man while Pedro is much slighter. Can Pedro go on to complete a career in a similar fashion? My thinking is no. The Sox made a reasonable offer showing the both the respect and pragmatism appropriate for the situation. They have lost him but it certainly freed up a lot of money, which they have already put into play by signing Edgar Renteria away from the Cardinals. Edgar doesn't pitch but you can be sure Theo is busy putting to work another 8 or 10 million a year to find another pitcher or two.
Another clear indication of this being a prudent business decision was that the Mets are the ones who signed Pedro for this huge contract. This isn't the first time the Mets have signed a player past his prime and suffered the consequences. There is a distinct possibility that in the near future the Mets could be holding the bag for 50 plus million and the Sox will be gleefully fielding a cheaper and healthier pitching staff.
So the ink isn't even dry on the championship pennant and already we are suffering through another off-season of the mix and match of assembling a squad to face off against the evil empire. We may look back on this as another one of Theo's smart moves or perhaps we won't. Ain't it great?
At the peak of his dominance he was pure artwork. Certainly he had over powering stuff but many have had physical skills in major league baseball and failed. He combined power and finesse with an equally impressive pitching strategy. When a batter faced Pedro they couldn't count on anything at any time. If a batter thought he might see the fastball then the nasty change up would be on its way. Similarly if the batter looked for a slider away a hard one inside might stand him up. Pedro had command of four pitches and he used them as he wished.
Breaking in with the L.A. Dodgers in 1992 for two appearances, his major league career blossomed in his final year of 4 seasons in Montreal in 1997. His stats were tremendous and resulted in a CY Young award. In 31 starts that year and 241 innings pitched, Pedro had 17 wins and 8 losses with 13 complete games, 305 strikeouts and an incredibly stingy E.R.A. of 1.90. That puts him in the same other world category as Gibson and Koufax.
In his 7 years in Boston he managed to win more than 17 on four occasions and incredibly had an E.R.A. of 1.74 in 2000. He never matched the complete game numbers only completing a high of 7 in 2000. If anything has been a chink in his armor it has been his durability in late innings. The fact that his E.R.A. has jumped to 3.90 over last year was a factor in the Sox decision making regarding a new contract.
No matter what happens in his new stint with the Mets, his career numbers of 182 wins, 76 losses and a career E.R.A of 2.71 coupled with 3 CY Young awards should be more than enough to get him into Cooperstown.
Despite all of this I think it is time for Pedro to move along. The negotiations although not particularly acrimonious took on the all to familiar trappings of today's players and agents. Respect is measured in dollars and the Mets respected Pedro with a reported 4 year guaranteed deal worth 53 million dollars. The Sox were only willing to ante up 3 years and 40 million.
Much can be said about this from both sides. Pedro is an aging super star who would have been able go out gracefully in Boston as his star dimmed. He has long been notorious for being a temperamental diva and the fans and media have given him a pass for the most part. This is not likely to happen in New York should he make a few trips to the disabled list, which would seem inevitable given his history of shoulder woes and the reported tear in his labrum.
The flip side of this of course is that we could suffer in the same way we did when the Sox let Clemens go in the "twilight" of his career. Of course Clemens has started 257 games since then and won 136 of them not to mention more CY Young awards and some championship rings. Clemens should thank the Sox for letting him go as it resulted in him getting a wake up call and finally getting himself in decent shape after his last four very mediocre years in Boston.
Clemens physically is a bull of a man while Pedro is much slighter. Can Pedro go on to complete a career in a similar fashion? My thinking is no. The Sox made a reasonable offer showing the both the respect and pragmatism appropriate for the situation. They have lost him but it certainly freed up a lot of money, which they have already put into play by signing Edgar Renteria away from the Cardinals. Edgar doesn't pitch but you can be sure Theo is busy putting to work another 8 or 10 million a year to find another pitcher or two.
Another clear indication of this being a prudent business decision was that the Mets are the ones who signed Pedro for this huge contract. This isn't the first time the Mets have signed a player past his prime and suffered the consequences. There is a distinct possibility that in the near future the Mets could be holding the bag for 50 plus million and the Sox will be gleefully fielding a cheaper and healthier pitching staff.
So the ink isn't even dry on the championship pennant and already we are suffering through another off-season of the mix and match of assembling a squad to face off against the evil empire. We may look back on this as another one of Theo's smart moves or perhaps we won't. Ain't it great?
Monday, December 13, 2004
FourPoints shocking sale price
The sale price of the FourPoints hotel was made public last week and it is not very good news for the Burlington real estate market. The property, which last sold in 2000 for a reported 14 million dollars, has now changed hands at a reported price of $6,480,000. This will of course result in a reduction of taxation on this site but will also have the added negative effect of providing a comparable value against the other 5 hotel properties in town. That comparable value will provide the owners of these properties with a benchmark to use in any abatement requests they may have in discussions with the assessor’s office over disagreements on value.
In addition to the very depressed resale value it would appear on first examination that the local hotel tax option would reflect that the values are down because hotel revenue is significantly down as well. According to figures provided by the town accountants office the tax that is collected for the town by the state has dropped dramatically. The tax, which is 4% of the rental price, is as follows for the last five years on a fiscal year basis:
Fiscal
1999..... $1,032,514
2000....... 1,344,562
2001........1,534,562
2002....... 1,191,603
2003.......... 956,453
2004...........903,362
The reduction in tax yield from fiscal 2001 is close to 41% and is even more of a concern when you take into consideration that additional properties came on line during that period. In fiscal year 1998 the town’s room inventory consisted of the Marriot with 416 rooms and 179 rooms at FourPoints site that was Wyndham Gardens at the time totaling 595 rooms from which the town received $1,032,514 in fiscal 1999.
From 1998 to today the town added the following inventory of rooms. In 1999 came Summerfield Suites with 151 rooms, in 2000, Homestead with 141 rooms Staybridge in 2002 with 142 rooms and finally Candlewood in 2002 adding 149 rooms for a total of 583 new rooms added to the inventory.
The net result is that since 1998 we have almost doubled the number of available room rentals in the town yet since the 1999 tax year we have had a net reduction of nearly 10% in tax revenue generated. This along with the substantial amount that we will lose in the property tax as a result of lower values will mean a further shifting of the property tax burden to the resident.
If the same type of value phenomenon should affect our retail space over the next few years we will be looking at double digit tax increases on residential homes in Burlington. We should keep this in mind the next time we have a developer or their attorneys tell the town meeting how much more revenue we will generate as a result of meeting the demand of developer generated studies of property uses.
In addition to the very depressed resale value it would appear on first examination that the local hotel tax option would reflect that the values are down because hotel revenue is significantly down as well. According to figures provided by the town accountants office the tax that is collected for the town by the state has dropped dramatically. The tax, which is 4% of the rental price, is as follows for the last five years on a fiscal year basis:
Fiscal
1999..... $1,032,514
2000....... 1,344,562
2001........1,534,562
2002....... 1,191,603
2003.......... 956,453
2004...........903,362
The reduction in tax yield from fiscal 2001 is close to 41% and is even more of a concern when you take into consideration that additional properties came on line during that period. In fiscal year 1998 the town’s room inventory consisted of the Marriot with 416 rooms and 179 rooms at FourPoints site that was Wyndham Gardens at the time totaling 595 rooms from which the town received $1,032,514 in fiscal 1999.
From 1998 to today the town added the following inventory of rooms. In 1999 came Summerfield Suites with 151 rooms, in 2000, Homestead with 141 rooms Staybridge in 2002 with 142 rooms and finally Candlewood in 2002 adding 149 rooms for a total of 583 new rooms added to the inventory.
The net result is that since 1998 we have almost doubled the number of available room rentals in the town yet since the 1999 tax year we have had a net reduction of nearly 10% in tax revenue generated. This along with the substantial amount that we will lose in the property tax as a result of lower values will mean a further shifting of the property tax burden to the resident.
If the same type of value phenomenon should affect our retail space over the next few years we will be looking at double digit tax increases on residential homes in Burlington. We should keep this in mind the next time we have a developer or their attorneys tell the town meeting how much more revenue we will generate as a result of meeting the demand of developer generated studies of property uses.
Saturday, December 11, 2004
O Christmas tree, O Christmas tree
In almost thirty-five years of marriage, the Christmas holidays have always been a source of joy. Having young children growing up over the years and watching them at their first awareness of Santa Claus and seeing the excitement on their faces at viewing a wonderful light display or presents under the tree are a parents treasured memories.
The parties with friends and family offer an opportunity to renew old acquaintances and strengthen the bonds of family and community life. It is also a period of time at the end of the year to wind down the hectic pace of every day life and offer a time of reflection on times and people who perhaps have passed on. When concluded, the holidays can leave you refreshed and rejuvenated and ready to take on the challenges of a new year.
In my house there is only one thing that annually has the potential to threaten the tranquility of family life during the holidays. That one thing is putting up the Christmas tree. I just don’t get it. I am a semi intelligent guy with an ordinary but reasonable track record of achievement in life. Why is it that the Christmas tree poses such a monumental challenge?
It is not for lack of effort or even ingenuity in tackling the problem. I have had various stands and strategies and ropes and twine and fishing line. Yet still it has happened. It stands tall and sturdy and resists tests of shaking and bouncing and jumping. Yet when the bride gets it loaded up with all her beautiful and thoughtful mementoes of years gone by, she may come home to find it has toppled. This resulted in yours truly being on the bad LIST.
After a string of successes in previous years and a restoration of my confidence, last year brought about disaster. The tree tumbled and several keepsakes got crunched. It was remembrance of this event that filled me with trepidation about this years Christmas. I thought perhaps somehow nailing it to the wall in the family room might be the answer. Lo and behold Christmas came early this year. I arrived home from work one day this week to find that my nearly 80 year old beloved father in-law had gotten the tree and installed it in a few minutes, solid like a rock, like an ancient oak.
It is not the first time he has saved my bacon in home disasters over the years. Just last month I was midway through changing faucets when I had to send out an emergency call to him. When he came through the door with his acetylene bottle and torches I thought he might tell me that I should know better than to play with fire in the house without him. But no, not a word of criticism just a good-natured laugh at my current predicament.
Within a couple of days the bride got a call from a very close girl friend and a call from my sister. These two women are married to men I hold in high esteem. They can do anything around the house, from carpentry to plumbing and beyond. Unfortunately both of their trees fell over this year.
The parties with friends and family offer an opportunity to renew old acquaintances and strengthen the bonds of family and community life. It is also a period of time at the end of the year to wind down the hectic pace of every day life and offer a time of reflection on times and people who perhaps have passed on. When concluded, the holidays can leave you refreshed and rejuvenated and ready to take on the challenges of a new year.
In my house there is only one thing that annually has the potential to threaten the tranquility of family life during the holidays. That one thing is putting up the Christmas tree. I just don’t get it. I am a semi intelligent guy with an ordinary but reasonable track record of achievement in life. Why is it that the Christmas tree poses such a monumental challenge?
It is not for lack of effort or even ingenuity in tackling the problem. I have had various stands and strategies and ropes and twine and fishing line. Yet still it has happened. It stands tall and sturdy and resists tests of shaking and bouncing and jumping. Yet when the bride gets it loaded up with all her beautiful and thoughtful mementoes of years gone by, she may come home to find it has toppled. This resulted in yours truly being on the bad LIST.
After a string of successes in previous years and a restoration of my confidence, last year brought about disaster. The tree tumbled and several keepsakes got crunched. It was remembrance of this event that filled me with trepidation about this years Christmas. I thought perhaps somehow nailing it to the wall in the family room might be the answer. Lo and behold Christmas came early this year. I arrived home from work one day this week to find that my nearly 80 year old beloved father in-law had gotten the tree and installed it in a few minutes, solid like a rock, like an ancient oak.
It is not the first time he has saved my bacon in home disasters over the years. Just last month I was midway through changing faucets when I had to send out an emergency call to him. When he came through the door with his acetylene bottle and torches I thought he might tell me that I should know better than to play with fire in the house without him. But no, not a word of criticism just a good-natured laugh at my current predicament.
Within a couple of days the bride got a call from a very close girl friend and a call from my sister. These two women are married to men I hold in high esteem. They can do anything around the house, from carpentry to plumbing and beyond. Unfortunately both of their trees fell over this year.
Wednesday, December 08, 2004
Paradise for the political gadfly
The full impact of the Internet has not been truly gauged through out the American experience as of yet. It has been so pervasive it would seem difficult to tally up or even explain in detail the social, economic, educational, and political strides that have been made as a result of instantaneous access to information.
I will how ever endeavor to explore the impact on an average Joe who has an interest in local, national and even international politics and geo-political events. Just a few short years ago if you hoped to keep abreast of such things it required a very large subscription base of various journals that you had to wait for on a daily weekly or monthly basis. Not only were the subscription costs prohibitive so to were the space requirements. Just the daily, two weeklies and junk mail fills my recycling bin to the top. As those natural restrictions were in force so to then was the diversity of opinion a local political or current events enthusiast was exposed to. Inevitably if all you got was the Boston Globe, CBS News and Newsweek magazine then your own opinion was likely to mirror the biases of your data input.
All of that of course has now been dramatically changed. With high speed Internet access at work and a clunky dial up modem at home all the events of the world are at the touch of a keyboard. Not just reporting of events but also the huge and diverse body of opinion that traditional media has to offer but now also the smorgasbord of journalist wannabes (present company included) in the blogosphere.
The choices are so many now that one has to keep nipping and tucking the favorites list on his or her browser just to keep a top list for the purposes of economical use of time. So for the moment I have included two from my current list of “gadfly paradise” sites, which I consider absolute must reads at the beginning of each day and whenever additional recreational reading time is available.
Realclearpolitics.com. This is my pick as the top site for unbiased compilation viewing of political opinion. Everyday the operators of the site provide a selection of opinion pieces from across the nation. The opinions presented seem to represent the political spectrum and frequently feature a point counter point format with distinguished voices being heard on both sides of an argument. In addition to the compilation section there are also selected editorials each day from major publications. This by itself would be worth a visit but the site offers a whole lot more. The talk show section of the site has a daily log of the major opinion programs and the roster of guests as well as the transcripts of the entire program. Did you miss Meet The Press or face the Nation last Sunday? No problem, just go to the site and the entire goings on are right there.
As good as all of that is, the polling data and coverage of political races is even better. The amount of information and accuracy of that information available on the site during the national and statewide races was truly staggering. Every major polling organizations data was placed on the site for the national elections as well as senate, house and gubernatorial races with margin of error and projected results data.
The party convention coverage was equally impressive. Gavel to gavel coverage was available with all of the speakers schedules and presentations available for print out. All of this information was archived and maintained on the site through out the entire campaign season.
Refdesk.com The size of this site and the quality of its information is to immense to even begin to explain. Take a couple of days and surf the contents and you can BEGIN to understand just how much information is available here. For the purposes of time and space I will limit my comments to one simple link that is available. Under the references resources section there is a link, which is titled USA and world newspapers. Click on this section and you are immediately transported to a section that has every state listed and sub-links that connect you to every publication for every community newspaper in that state, which has a web site. Continue further on down and there is a link to each country with sub-links to major publications. Further on down is a list of both domestic and international news outlets. If something is going on in some obscure place in the world. This is the place to find it.
One can only wonder just what the possibilities are for this Internet thing over the time.
I will how ever endeavor to explore the impact on an average Joe who has an interest in local, national and even international politics and geo-political events. Just a few short years ago if you hoped to keep abreast of such things it required a very large subscription base of various journals that you had to wait for on a daily weekly or monthly basis. Not only were the subscription costs prohibitive so to were the space requirements. Just the daily, two weeklies and junk mail fills my recycling bin to the top. As those natural restrictions were in force so to then was the diversity of opinion a local political or current events enthusiast was exposed to. Inevitably if all you got was the Boston Globe, CBS News and Newsweek magazine then your own opinion was likely to mirror the biases of your data input.
All of that of course has now been dramatically changed. With high speed Internet access at work and a clunky dial up modem at home all the events of the world are at the touch of a keyboard. Not just reporting of events but also the huge and diverse body of opinion that traditional media has to offer but now also the smorgasbord of journalist wannabes (present company included) in the blogosphere.
The choices are so many now that one has to keep nipping and tucking the favorites list on his or her browser just to keep a top list for the purposes of economical use of time. So for the moment I have included two from my current list of “gadfly paradise” sites, which I consider absolute must reads at the beginning of each day and whenever additional recreational reading time is available.
Realclearpolitics.com. This is my pick as the top site for unbiased compilation viewing of political opinion. Everyday the operators of the site provide a selection of opinion pieces from across the nation. The opinions presented seem to represent the political spectrum and frequently feature a point counter point format with distinguished voices being heard on both sides of an argument. In addition to the compilation section there are also selected editorials each day from major publications. This by itself would be worth a visit but the site offers a whole lot more. The talk show section of the site has a daily log of the major opinion programs and the roster of guests as well as the transcripts of the entire program. Did you miss Meet The Press or face the Nation last Sunday? No problem, just go to the site and the entire goings on are right there.
As good as all of that is, the polling data and coverage of political races is even better. The amount of information and accuracy of that information available on the site during the national and statewide races was truly staggering. Every major polling organizations data was placed on the site for the national elections as well as senate, house and gubernatorial races with margin of error and projected results data.
The party convention coverage was equally impressive. Gavel to gavel coverage was available with all of the speakers schedules and presentations available for print out. All of this information was archived and maintained on the site through out the entire campaign season.
Refdesk.com The size of this site and the quality of its information is to immense to even begin to explain. Take a couple of days and surf the contents and you can BEGIN to understand just how much information is available here. For the purposes of time and space I will limit my comments to one simple link that is available. Under the references resources section there is a link, which is titled USA and world newspapers. Click on this section and you are immediately transported to a section that has every state listed and sub-links that connect you to every publication for every community newspaper in that state, which has a web site. Continue further on down and there is a link to each country with sub-links to major publications. Further on down is a list of both domestic and international news outlets. If something is going on in some obscure place in the world. This is the place to find it.
One can only wonder just what the possibilities are for this Internet thing over the time.
Monday, December 06, 2004
Not so ominous FourPoints update
The news today on the Wheeler Road FourPoints property is both good and bad. The good news is that the property has been sold by Grubarges-Burlington LLC to either Magna Hospitality group or a company that they are representing. There is no public selling price as of yet. The property is currently going through the liquidation of accessories and is scheduled for a major renovation. This information is according to the V.P of accounting Zita Ephrem in a telephone interview with her today. Ms. Ephrem went on to say that the new firm intends to open the newly renovated hotel sometime in mid 2005.
Magna Hospitality is located in East Greenwich Rhode Island and owns and operates 17 hotel properties in very strong hotel markets around the country. The company was formed in 1998 and is lead by William F. Burruss Jr. Although a young company it appears as though its roster of executives is loaded with veterans of the hospitality business. The entire company history and roster of executives can be viewed at www.magnahospitality.com
The bad news is that the current assessed value of the property indicates quite graphically what has transpired in this market place over the last several years. This 179-room property was last sold at a reported price of 14 million dollars in 2000. Since that time the property has had a steadily declining value on the assessor’s books to the current fiscal 2005 value of 7.6 million dollars. At the current commercial industrial rate of $28/1000 that equates to approximately $210,000 in property taxes. It certainly will be interesting to see what purchase price the property changed hands at this time around
Magna Hospitality is located in East Greenwich Rhode Island and owns and operates 17 hotel properties in very strong hotel markets around the country. The company was formed in 1998 and is lead by William F. Burruss Jr. Although a young company it appears as though its roster of executives is loaded with veterans of the hospitality business. The entire company history and roster of executives can be viewed at www.magnahospitality.com
The bad news is that the current assessed value of the property indicates quite graphically what has transpired in this market place over the last several years. This 179-room property was last sold at a reported price of 14 million dollars in 2000. Since that time the property has had a steadily declining value on the assessor’s books to the current fiscal 2005 value of 7.6 million dollars. At the current commercial industrial rate of $28/1000 that equates to approximately $210,000 in property taxes. It certainly will be interesting to see what purchase price the property changed hands at this time around
Sunday, December 05, 2004
An aberration or an ominous sign?
The recent announcement of the closing of the Sheraton FourPoints on Wheeler Road is not good news for the taxpayer in Burlington. The question is whether or not this is an aberration or is it a sign of more difficult times ahead?
Along with the replaced Howard Johnson on Middlesex Turnpike this location was the primary hotel in the town up until the construction of the Marriot on Mall Road in the early seventies. The Howard Johnson was knocked down and replaced by a Barnes and Nobel more as a result of age and obsolescence of the property and a more profitable replacement than it was an indication of the health of the hotel business.
The FourPoints is a different story however. This is the at least the fourth operator of the property including Holiday Inn, Days Inn and Wyndham Gardens on the site. Those entities struggled economically on the site even when there was little competition in Burlington. In fact at one time the property was in receivership. The Renaissance just across the town line in Bedford also has had a spotty history with a number of former operators as well.
After a renovation rejuvenated the property back to a very nice venue it was thought that perhaps that and increased development in the town would enable it to flourish. A combination of factors however has doomed it apparently over the past several years.
The primary reason would have to be the glut of rooms that have been added to the town in the last decade. The local hotel tax was viewed as an easy way for the towns to generate additional revenue. When the owners of the High Voltage site came in with a proposal to build Summerfield Suites it looked like killing two birds with one stone. It would be an important element of rejuvenating the site and it would generate additional property and hotel tax revenue.
Shortly thereafter the development community and the town apparently felt that if one new extended stay hotel was good then of course three more would be three times better. So we then ended up with Candlewood, Homestead and Staybridge Suites. Not to be outdone and equally interested in the local hotel tax option Billerica soon quickly added two new huge facilities right on the town line with Burlington.
The effect so far has been the exact opposite of what was intended. Instead of generating more revenue it is likely to drive revenues down even further. The values of the properties have dropped and so to have the revenues from the hotel tax as a result of competition dropping room prices and occupancy levels. This drop in values along with a substantial rise in residential property values has contributed to the substantial shift in taxation from the commercial industrial sector to the residential community.The result has been back-to-back 8% tax increases for the resident over the past two years.
If the FourPoints remains vacant for to long a period and the economy remains at its current pace that will only add to the declining revenue problem for Burlington’s budget over time. More importantly is the question as to whether or not the property is in need of a change in use. Since retail use is the current zone which the developers feel will bring the highest speculative return can we expect an attempt to re-zone the parcel? Or are we likely to see an attempt to turn the parcel into a highly dense permanent residential use?
Is this a one time only situation that might be remedied by a new operator or is it a sign that we have over built in the hotel market and that other closings are likely to follow? If others are to follow it might bring to fruition one town meeting member’s prediction that the building of extended stay hotels was only a sham to circumvent local residential zoning and that the converting of these buildings to permanent, highly dense rental housing units was inevitable.
If indeed that is the case then it is important for the town to have a plan of attack in place to control this transition . Anyone paying any attention to the aging of the population in the country knows that as the baby boomers continue to enter their sixties and seventies more age restricted, congregate, assisted living and nursing home facilities will be needed. The town should be very careful to examine any zoning change proposal on the basis of the needs of the town as opposed to the development du jour.
Along with the replaced Howard Johnson on Middlesex Turnpike this location was the primary hotel in the town up until the construction of the Marriot on Mall Road in the early seventies. The Howard Johnson was knocked down and replaced by a Barnes and Nobel more as a result of age and obsolescence of the property and a more profitable replacement than it was an indication of the health of the hotel business.
The FourPoints is a different story however. This is the at least the fourth operator of the property including Holiday Inn, Days Inn and Wyndham Gardens on the site. Those entities struggled economically on the site even when there was little competition in Burlington. In fact at one time the property was in receivership. The Renaissance just across the town line in Bedford also has had a spotty history with a number of former operators as well.
After a renovation rejuvenated the property back to a very nice venue it was thought that perhaps that and increased development in the town would enable it to flourish. A combination of factors however has doomed it apparently over the past several years.
The primary reason would have to be the glut of rooms that have been added to the town in the last decade. The local hotel tax was viewed as an easy way for the towns to generate additional revenue. When the owners of the High Voltage site came in with a proposal to build Summerfield Suites it looked like killing two birds with one stone. It would be an important element of rejuvenating the site and it would generate additional property and hotel tax revenue.
Shortly thereafter the development community and the town apparently felt that if one new extended stay hotel was good then of course three more would be three times better. So we then ended up with Candlewood, Homestead and Staybridge Suites. Not to be outdone and equally interested in the local hotel tax option Billerica soon quickly added two new huge facilities right on the town line with Burlington.
The effect so far has been the exact opposite of what was intended. Instead of generating more revenue it is likely to drive revenues down even further. The values of the properties have dropped and so to have the revenues from the hotel tax as a result of competition dropping room prices and occupancy levels. This drop in values along with a substantial rise in residential property values has contributed to the substantial shift in taxation from the commercial industrial sector to the residential community.The result has been back-to-back 8% tax increases for the resident over the past two years.
If the FourPoints remains vacant for to long a period and the economy remains at its current pace that will only add to the declining revenue problem for Burlington’s budget over time. More importantly is the question as to whether or not the property is in need of a change in use. Since retail use is the current zone which the developers feel will bring the highest speculative return can we expect an attempt to re-zone the parcel? Or are we likely to see an attempt to turn the parcel into a highly dense permanent residential use?
Is this a one time only situation that might be remedied by a new operator or is it a sign that we have over built in the hotel market and that other closings are likely to follow? If others are to follow it might bring to fruition one town meeting member’s prediction that the building of extended stay hotels was only a sham to circumvent local residential zoning and that the converting of these buildings to permanent, highly dense rental housing units was inevitable.
If indeed that is the case then it is important for the town to have a plan of attack in place to control this transition . Anyone paying any attention to the aging of the population in the country knows that as the baby boomers continue to enter their sixties and seventies more age restricted, congregate, assisted living and nursing home facilities will be needed. The town should be very careful to examine any zoning change proposal on the basis of the needs of the town as opposed to the development du jour.
Wednesday, December 01, 2004
Crime of the century?
With Dan Rather's recent announcement of retirement from the CBS news anchor desk will come a great deal of discussion, reminiscing about and examination of his career. The bulk of that talk should rightly focus on the job he performed in following Walter Cronkite as "America's most respected newsman".
Just as there should be plenty of room for accolades from his supporters, so to should Mr. Rather's detractors have an opportunity to discuss his many short comings in the performance of his job. Central to that might be the puff piece interview he did with Bill Clinton as well as the confrontation less face to face interview with the mass murderer Saddam Hussein. Additionally from an industry standpoint and business perspective a complete analysis would include why Rather's program has dropped the "Tiffany" network into a distant third place in news ratings.
Most importantly however from an historical standpoint the country needs to know what if any involvement Mr. Rather had in what might have been the crime of the century. That crime could have unfolded this way. The country is involved in an extremely close race to determine the next leader of the nation. In an attempt to alter the course of history a person knowingly forges government documents to portray one of the candidates in a way which would embarrass the candidate. That person then conspires with others to release that information through a national media outlet with huge exposure to the electorate hoping to do maximum damage to the candidate.
The implications for such an event would be multitudinous. The fundamental foundation of American democracy would be severely undermined. The press as an independent institution of governmental over sight and accountability would be forever tarnished.
This of course didn't happen because the results were not affected but just as if a bank robbery had been attempted but the bandits got away without any money wouldn't there be an investigation and prosecution? Where is the public outcry over the memogate documents? A crime of some sort is at the heart of this matter. Are we all satisfied that an industry self examination is going to be sufficient to expose what if any wrong doing was done here?
This isn't about red states or blue states or any of the other myriad of social, religious, economic or foreign policy issues which divide us as a people across the street or across the nation. This is about fundamental fair play in how we go about selecting the person to lead our nation. Only a full investigation of the events will act as a deterrent to others who might attempt these shenanigans in the future
Just as there should be plenty of room for accolades from his supporters, so to should Mr. Rather's detractors have an opportunity to discuss his many short comings in the performance of his job. Central to that might be the puff piece interview he did with Bill Clinton as well as the confrontation less face to face interview with the mass murderer Saddam Hussein. Additionally from an industry standpoint and business perspective a complete analysis would include why Rather's program has dropped the "Tiffany" network into a distant third place in news ratings.
Most importantly however from an historical standpoint the country needs to know what if any involvement Mr. Rather had in what might have been the crime of the century. That crime could have unfolded this way. The country is involved in an extremely close race to determine the next leader of the nation. In an attempt to alter the course of history a person knowingly forges government documents to portray one of the candidates in a way which would embarrass the candidate. That person then conspires with others to release that information through a national media outlet with huge exposure to the electorate hoping to do maximum damage to the candidate.
The implications for such an event would be multitudinous. The fundamental foundation of American democracy would be severely undermined. The press as an independent institution of governmental over sight and accountability would be forever tarnished.
This of course didn't happen because the results were not affected but just as if a bank robbery had been attempted but the bandits got away without any money wouldn't there be an investigation and prosecution? Where is the public outcry over the memogate documents? A crime of some sort is at the heart of this matter. Are we all satisfied that an industry self examination is going to be sufficient to expose what if any wrong doing was done here?
This isn't about red states or blue states or any of the other myriad of social, religious, economic or foreign policy issues which divide us as a people across the street or across the nation. This is about fundamental fair play in how we go about selecting the person to lead our nation. Only a full investigation of the events will act as a deterrent to others who might attempt these shenanigans in the future
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