COMMUNITY BANK CONFERENCE
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OCTOBER 29, 2015
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THE
FINANCIAL
www.bankerandtradesman.com
WEEK OF MONDAY, SEPTEMBER 21, 2015
SERVICES
AND
REAL
ESTATE
WEEKLY
FOR
MASSACHUSETTS
A Publication of The Warren Group RATES ON THE RISE
Residents Claim Rate Increases Unjustified Group Calls For Data To Support Homeowners Insurance Rate Increases BY JIM MORRISON BANKER & TRADESMAN STAFF
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hanks to last winter’s record snowfall and cold, insurance companies shelled out a lot of money to resolve claims related to ice dams and frozen pipes. Now many are asking the state to approve rate increases to help offset those losses, but one watchdog group is pushing for more information. Peter Fullerton is the spokesman for the Massachusetts Division of Insurance. In an email, he said the state received 39 homeowners insurance rate filings, 12 of which were rejected. Of the 27 that were authorized, 14 have seen no change in rates, Fullerton said. Fullerton said the division is planning public informational hearings and listening sessions to gather input and concerns from all interested parties and will announce the dates soon. The hearings are not required by law and not typically held. Continued on Page 8
RISING SEAS
HIGH AND DRY? Developers Putting Resiliency On The Radar BY STEVE ADAMS BANKER & TRADESMAN STAFF
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early half of the 12 acres at the Clippership Wharf development parcel in East Boston are under water. Developer Lend Lease wants to make sure the rest remain as dry as possible. It’s pursuing an aggressive climate resiliency strategy as it designs 477 condos and apartments in four buildings within a stone’s throw of Boston Harbor. Lend Lease sacrificed rentable space on the ground floor and moved its floor plates 3 feet higher than Federal Emergency Management Agency flood maps recommend. It’s planning to install flood-proof doors and gates to protect ground-floor common areas and retail spaces from storm surges. On the waterfront, it will fortify thousands of feet of seawall with riprap and plant a living shoreline covering 7,000 square feet to provide a buffer against surges. “That’s the new normal relative to how these waterfront sites need to be designed,” said Nick Iselin, general manager of development for Lend Lease. “Sea levels will rise. We think it’s important to be a 100-year project rather than a 25-year project.”
The development’s design is also the exception, say developers and planners, despite a steady drumbeat of warnings about the potential damage that extreme weather could pose to some of the region’s priciest real estate in coming decades. A study by Watertown-based Sasaki Assoc. identified $14 billion worth of commercial properties in Greater Boston that would be at risk during a major storm in 2050, when the mean sea level in Boston Harbor is projected to be 2 feet higher than today. But there’s still little financial incentive to build structures designed to withstand the next few decades, planners and developers say. “How do we say to a tenant, ‘It’s going to cost a little bit more in the short term, but in the long term the building is going to retain its value?” said Emily Keys Innes, an urban planner with The Cecil Group of Boston.
Lend Lease, an Australian construction manager that is dipping its toe into the development game in Boston, New York and Chicago, sees an opportunity to build a model for waterfront sustainability on a long-vacant industrial pier at Jeffries Point.
Living With Water
The conflict between short-term profits and long-term sustainability is a key Continued on Page 10
NO ACCOUNTING FOR TASTE
Accounting For Loan Losses On Niche Lines, Low-Risk Loans
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here are certainly worse problems to have than a lack of loan losses, but a perfectly performing loan portfolio can actually pose some difficulties when accounting for potential losses – more so if your bank is trying to break into a specialty lending line in an effort to stand out from the crowd. Much ink has been spilled about the boom in commercial real estate lending, and C&I lending has also taken off at many Massachusetts banks. As of June 30, commercial and industrial loans made by Massachusetts-headquartered banks totaled about $12.4 billion, about 28 percent higher than the $9.7 billion booked by that time a year ago, which in Continued on Page 9
Developer Lend Lease elevated ground floors and will plant native species to create a “living shoreline” along the East Boston waterfront to mitigate potential future flooding at Clippership Wharf, a 477-unit condo and apartment complex expected to break ground by early 2016.
Rendering courtesy of Lend Lease
BY LAURA ALIX BANKER & TRADESMAN STAFF
Photo by Steve Adams | Banker & Tradesman Staff
New FASB Rules Could Complicate The Picture
Climate change studies predict sea levels in Boston Harbor could rise more than two feet by 2050, but developers are just starting to incorporate floodresilient designs.
CONTENTS Points ....................................................................... 4
Banking & Lending .................................................. 9
Classified Sections ................................................. 17
By The Numbers ....................................................... 6
Commercial & Industrial ........................................ 10
Records Section...................................................... B1
In Person .................................................................. 7
SPECIAL SECTION
Residential .............................................................. 8
Fast 50 ................................................................... 13
SUPPLEMENTS