Monday, September 19, 2005

how THE MAN keeps it up

All summer I've made sure my interns do more than just answer phones and hand out leaflets. I've had them probe city hall for information so they can discover how their government works, and we can expose the workings of the machine, and how THE MAN keeps us down, to the gain of the rich and the suburban workers.

Today's episode brings us to the BRA project at 422-424 Massachusetts Avenue. First of all, I try to be as conservative as possible in my numbers, always giving the city, the developer and the BRA the benefit of the doubt. For example, I believe 10 units were built but I only have sales figures for 9 units so I just use those 9. So, the profits were probably greater than I state.

The BRA was not forthcoming in giving out information about the compliance with the Boston Jobs Policy so I taught 16 year old Jamie from the O'Bryant school how to do a FOIA request (Freedom of Information Act) and we finally received the information last week. My summer intern Jeff obtained much of the other information from the building department and the BRA and from real estate services.


422-424 Sales $ 5,680,000

BRA payments 216,000
Construction Costs 3,200,000
broker 260,000
Estimated soft costs 1,000,000

Net profit 1,004,000

This is an annual return on money of about 50% based on the 1,000,000 of equity they indicated they were putting in the project. This is an excellent rate of return. Usually anything above 10% is considered good. Also, take into consideration that in the soft costs are usually a "developers fee" where they get paid for their effort to manage the project. So, they basically double their money in two years and draw a salary for their effort.


The Boston Jobs Policy indicates that 50% of jobs should go to Boston residents. 25% of the jobs should go to minorities, and 10% should go to women. We obtained the job breakdown through our freedom of information request, since the BRA wouldn't give it to us from a phone request.

Boston Residents 16.4%
Minorities 13.1 %
Women .8%

This means that on a Boston Redevelopment Authority Job, more than 4 out of 5 jobs went to people who do not live in the City of Boston, and only 1 in 7 jobs in this 50% minority city went to minorities.

In addition, all the building permits were obtained by contractors outside the city. Sprinkler work from Hopedale, MA, Plumbing from Hingham, MA, Electrical work from Salem, NH, and security from Norwood, MA. General Contractor from Wakefield. This means that the owners of the companies, who usually make the most money, were all from outside the city.

When one looks at the numbers in more detail, there are further irregularities. A general rule of thumb in construction is that half of the costs are materials, and half the cost is labor. For the purpose of analysis, we will give the benefit of the doubt and say that in this case, only 25% of the hours are labor and 75% materials. This leaves $800,000 in labor costs. The BRA compliance sheets indicate that there were 11,462 hours worked on the job. This would come out to an average hourly wage of around $69 dollars an hour which is clearly out of line with what the typical construction worker makes.

Reasons for this could be that the BRA paperwork is not accurate, that somehow the developer built the builiding without much labor, or that the builder overpaid his building permit. The latter two reasons do not make physical or economic sense. Reasons for the BRA paperwork to be not accurate is that the contractor may not want to indicate all the workers hours to the BRA because the compliance figures would be even lower, or the contractor was sloppy in his paperwork, or the BRA was not vigilant or knowledgeable about collecting data. It is typical on city jobs to make sure you log all minority, women, and resident jobs in order to maximize your percentages. Therefore it is likely that the percentages on the project were even lower than reported.

For example, on this approximately 10,000 square foot brick building only 461 man hours of time are reported for masonry work. It is hard to believe that three men built all that masonry in less than 3 weeks time.

Community Benefit

The developer promised $50,000 to the abutters for the upgrade of the back alley. This was never done. I have an email into the BRA's Christine Colley who is supposed to check up on compliance by developers. I have no answer yet, but it was sent recently. The project was finished earlier this year.


The original building permit was for $3,200,000. After two years of work (where the price of building materials increased dramatically, in part due to the Iraq war), and switching general contractors the project only went $8,810 over budget less than 1% of costs. This is very, very impressive or they are shortchanging the money owed the building department.

Conversations with the BRA

What brought this analysis on is that the City is about to put out an RFP for Parcel 3 in Roxbury and I and many residents are very concerned that the jobs and economic benefit from this Parcel will benefit the community. The BRA has said the jobs policy is always in effect, but I and others have questioned whether it will be enforced.

I spoke to Kairos Shen to what if anything was done about the lack of compliance on the project. He asked me to check with Christine Colley who passed me to complaince officer John Redd. John called me today and admitted that they had some problems on that project. He admitted that no fines were levied against the developer. He tried to explain some arcane process about how it was decided to fine people that wasn't put in place on this project. The summation is that the jobs went predominantly to white male suburban workers while the BRA was in full knowledge of it, and didn't find the inequities important enough to do anything about it.


Last week at a Mission Hill Ward meeting, I spoke about this project and the lack of resident, minority and women hiring in the city, and the lack of compliance with the rules in the City. I do not think I was very articulate, in fact, one reporter was nice enough to tell me that I was rambling. I apologize.

But, after my speech a John LaCroix an attorney for the city in the Boston Employment Commission came up to me and handed me his card. He told me that the job I was talking about was a BRA job, not a city job. (I knew this, but didn't say it in my speech) He then told me that the Boston Jobs Policy was "JUST A GOAL, NOT A POLICY" and that if I had any questions I could call him.

I am flabbergasted. I wish they would tell contractors that this is just a goal, we wouldn't work so hard to try and comply by it (those of us who do try, anyway). When the general counsel who represents the Mayor says that it is just a goal, you can begin to understand why the Mayor has 7 of his 8 paid campaign staffers being white and they clearly only give lip service to making sure Boston Jobs and our tax dollars go to Boston workers.

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