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Menino needs a better case for tax breaks at Filene’s site

Mayor Menino marvels at the robust health of the downtown real estate market where “cranes crowd the city skyline because investors are bullish on Boston.’’ If that’s the case, why is the Menino administration contemplating tax breaks for the $630 million Filene’s redevelopment project in Downtown Crossing?

Two years ago, there was a collective sigh of relief when Millennium Partners took control of the Filene’s property and proposed to build a mixed-use development in this crucial section of the city. The site had been dormant for four years while under the control of Vornado Realty Trust of New York. Vornado had threatened to leave it as a hole in the ground unless the city came forward with tax concessions. Menino, to his credit, wouldn’t budge. But now Millennium is looking for tax concessions from the city, as well. And city officials appear amenable.

The public should be wary of this effort. The economy, for the most part, is improving. Office vacancies in Boston are among the lowest of all major cities. Commercial rents are on the rise, job growth is steady, and access to capital is better than it has been in a long time. That’s not the kind of climate that ordinarily calls for tax breaks to developers. And the fact that neither the city nor Millennium will reveal the size of the potential tax break creates even greater skepticism.

Anthony Pangaro, a principal for Millennium, argues that Downtown Crossing, while brimming with potential, cannot be viewed in the same rosy light as the Back Bay or Kendall Square. Attracting first-rate retailers to the site, he said, will require sweeteners, including affordable and predictable rents. Tax breaks, he said, would put the developer in a better position to negotiate long-term leases with commercial clients. Pangaro also emphasized that the city could expect to generate about $10 million in new taxes from the development’s 425 luxury residences.


Pangaro makes a sound theoretical argument. Retail is a tougher sell than residential in Downtown Crossing. But without knowing how much is at stake in tax concessions— and for how long — there is no way for the public to evaluate this effort. Perhaps a tax break makes sense at the beginning of the project. But once the residential and office components are fully leased, high-end retailers should follow of their own accord.


Millennium and the Menino administration need to put their cards on the table. The longer they conceal the details, the weaker the argument for tax concessions.