Developer Don Chiofaro has raised the possibility of receiving a tax break from the city to help subsidize the two-tower development he has been trying for years to build on Boston’s downtown waterfront, according to e-mails obtained by the Globe.  The tax break was broached during a meeting in July with Boston Redevelopment Authority officials on his plans to replace the Boston Harbor Garage with a hotel, residential, and office complex. The discussion was detailed in an e-mail sent by a senior BRA official, one of 2,500 messages the Globe obtained through a public records request.  “We met with the Chiofaro team last week and they believe they can make a project work with the height and FAR [floor area ratio] proposed with tax incentives,” BRA waterfront planner Richard McGuinness wrote in an e-mail to colleagues and consultants retained by the city.  BRA officials later confirmed a tax break was discussed.  The meeting came several weeks after the city proposed new zoning that would dramatically increase the allowable size of new development on the property from current rules — but would not permit Chiofaro to build the 1.3 million-square-foot project he has been planning.  Don Chiofaro’s megaproject would redefine one of the most prominent stretches of the waterfront.  The proposed zoning would still let Chiofaro build a 600-foot tower, and an overall development of 900,000 square feet. But the developer told officials that, at that size, he would be left with a “budget shortfall of $30 million” that a city tax break would apparently help close, according to the e-mail from McGuinness.  Boston has often awarded tax breaks to developers of some of the city’s largest projects. The redevelopment of the Filene’s block in Downtown Crossing, where a tower of luxury condominiums is under construction, received a $7.8 million incentive to help lure stores and office tenants to the complex.  Still, Chiofaro’s request could complicate decision-making for city officials amid public pushback on using tax dollars to support private developers.  A spokeswoman for Chiofaro Co. declined to comment specifically on the tax break and financing issues. In a statement extolling his development, Chiofaro said “our concepts have evolved continuously” based on input from neighbors and others, and he promised to deliver “an economically viable project that is responsive to planning objectives and community feedback.”  A spokesman for the BRA said in a statement that “the idea of a tax incentive is a significant request, and, at this early stage, it is not something that we have even begun to consider.”  Most of the 2,500 e-mails about the Harbor Garage are discussions among BRA staffers, or letters from residents who support or oppose the project. Few are from Chiofaro himself, and those are very short — typically, requests to meet with city officials in person or to speak on the phone.  Even so, the documents hint at the remarkable turn of events for Chiofaro, who for years was effectively shut out of City Hall because the late mayor Thomas M. Menino strongly opposed the developer’s plan. With the election of Martin J. Walsh, Chiofaro has a receptive audience at City Hall, and the e-mails indicate he and his team have had numerous meetings and frequent correspondence with public officials.  One message from Chiofaro shows the developer trying to keep information he would share with city officials from becoming public. In an e-mail last December to BRA director Brian Golden, Chiofaro offered to give city officials “full access to our material,” but added, “we expect that it will remain confidential until it is put into the public domain if ever.”  Such behind-the-scenes negotiating is not unusual; BRA officials say the practice improves development proposals, smoothing the public process later on.  Chiofaro has published a website and released images of the complex at the 1.3 million square feet size, showing a pair of glass buildings, one 600 feet tall that would include a hotel and residences, the other a 400-foot office tower.  But that was before the BRA released the new proposed zoning for the property in June. E-mails among BRA staff indicate Chiofaro has since agreed to keep the overall size of his project under the proposed 900,000-square-foot limit.  Those new guidelines were widely seen as friendly to Chiofaro, since they would give the developer much of the building room he has been seeking. The current zoning for the Harbor Garage is a 200-foot height limit and overall size of 430,000 square feet.  Unlike Menino, the Walsh administration has been outspoken about wanting a big development to replace the garage — just not as big as Chiofaro wants.  Even so, Chiofaro has been lobbying BRA officials to relax other size constraints, specifically limits on volume that would influence the buildings’ height, width, and footprint.  Consultants from Boston planning and design firm Utile Inc., who were hired by the city to help draft the zoning guidelines, have strongly advised the BRA against relaxing those limits, according to the e-mails. Without the proposed volume limits, the resulting buildings would be “too bulky” and create “heavy barriers in terms of skyline views and presence,” Utile principal Matthew Littell wrote.  The city guidelines have not been finalized. BRA officials said they were unlikely to significantly change them, citing the arguments of the Utile consultants.  The Chiofaro spokeswoman said the developer remains concerned about the volume cap, which she argued was based on erroneous assumptions about current design trends.  The e-mails also show BRA officials disputing Chiofaro’s assertion the complex needs to be as large as 1.3 million square feet to generate the profits necessary to draw investors willing to finance such a big undertaking. The BRA’s financial consultant concluded a smaller project would still get financing.  But a consultant hired by Chiofaro, W. Tod McGrath, a Massachusetts Institute of Technology lecturer and real estate expert, said the BRA analysis fails to consider how complex the waterfront project is to build, and that the developer would lose substantial parking revenue during construction.  “It’s much bigger than a typical project and it will take three years to build, so there are no cash inflows for a longer period of time,” McGrath said in an interview. “These things add to uncertainty, and capital markets don’t like uncertainty. The higher the uncertainty, the higher the expected rates of return have to be to compensate investors for the risk.”
Chiofaro has quietly signaled to City Hall that he is willing to scale back his skyscraper plan to 900,000 square feet of floor area — though he is still campaigning against proposed restrictions on the project’s overall size.