The Worst Land Deals in the City of Boston

As requested, and as promised, here is a synopsis of some of the worst land deals in the City. There are many others, of course, of various magnitudes but the bottom line is that the Mayor has been taking care of those that take care of him. Meanwhile, the residents are not getting their money’s worth for their assets. A business would not be run like this, nor would a household. I hope you take the time to read, and keep these in mind when you hear City Hall talking about how we have no money for educating our youth.

City Hall Plaza
In 1993, Menino held a design competition on what to do with the Plaza. In 1996, he let the BRA take the Plaza by eminent domain. He waived compensation. These 10+ acres of land are easily valued at $30 million an acre for a total of over $300 million dollars. Currently, the BRA owns all of the Plaza and the City taxpayers maintain it. The City’s treasury, which gives to the BRA but never gets from the BRA, has received nothing and will receive nothing from this deal. The City Council complains that they don’t get information from the BRA. If they simply refused to continue funding the BRA for items like maintenance of the Plaza until the agency was as transparent as they like, perhaps they could get some of the answers they seek.

Hayward Place

Hayward Place is an acre of City-owned land, lying fallow as a surface parking lot for years. It was slated for construction of the Quincy Upper School or for affordable housing. The BRA, again on Menino’s instruction, took the land by eminent domain without compensation. After a bidding process that wasted the time and money of several earnest developers proposing housing (one also included a school), which the BRA had encouraged to create a 24/7 lively neighborhood, the BRA let the Millennium Parners/Macomber Development (Tony Pangaro, a long-time friend of the Mayor), proposing an office building, “match” the high bid of $23 million offered by Lincoln Properties, who proposed a zoning-compliant 150’ building of 350 housing units plus a little park.

But the BRA never did sell the land to Millennium. They wrote a 10-year “lease” (expiring 2013) with a $13 million “prepayment” to be a deposit on an eventual purchase. The BRA put this deposit into an escrow account, allegedly for the Quincy School, but it has never been used. The developer can, at his option, have the money returned and walk away from the deal.

Meanwhile, the developer operates the parking lot and has been collecting the parking money, about $3 million a year according to the Finance Commission director. The developer operates this lot, free of property taxes or land rent. The lease lets the developer walk away after 10 years, and get back the $13 million deposit plus the interest, and gives him first right of refusal to buy the land for the original $23 million. What a deal!

The City could have had a school, library and housing, with the housing paying taxes. We could have at least had a lucrative parking lot. We have nothing. No tax revenue, no ownership, no parking revenue, and no control over what will be built. It is zoned for 150 feet, but I will be willing to bet it will get a 121A tax break and be allowed to build higher, and the citizens will get less in tax revenue.




Winthrop Square Garage

The garage occupies an acre of prime financial district land, used by City as a parking garage for years. The City’s leased operator let it deteriorate so most of it unusable, a safety hazard. Menino finally decided that’s where to put his 1000’ tower. Menino let the BRA take by eminent domain, without compensation, the leasing rights of the garage for temporary continuation of parking till developer designated. The BRA was to get the parking fees. The BRA also issued an RFP saying it would be the owner collecting land lease fees for the tower. There was only one bidder, the next door owner, who by combining it with his own parcel would make it hugely more usable and valuable. The Mayor’s office put out a press release saying it was worth $70 to $100 million dollars. Sam Yoon and Tom Menino worked out a back room deal with the BRA so that the parking money would go to the BHA. Two years later I contacted Yoon’s office to see if the BHA was getting the money and Yoon’s office told me that the BRA was stonewalling him.

Bottom line: the taxpayers of Boston get none of the millions from either the parking revenue or the eventual sale of the building.


One Beacon Street 121A

Ch. 121A is an urban renewal statute that provided for 40-year tax-exemption for new construction of affordable housing in blighted areas. The developer pays a lower negotiated state excise tax which is given back to the City as a Payment in Lieu of Taxes. Developments qualify for 121A tax agreements if the BRA declares the area "blighted" and then declares the project a “public purpose.” There are many of these agreements around the city.

Ch. 121A projects save one-third to one-half on their property taxes. In Boston, there are about two dozen 121As that are not affordable housing. The BRA has a practice of selling these tax breaks to each subsequent buyer of One Beacon Street. As if One Beacon Street is somehow a “Blighted” property. They sell or extort these tax breaks for $1 per square foot from each new buyer of the property, who is happy to give the BRA $1.1 million dollars because they save many millions more in property taxes, taxes the citizens of Boston do not receive.

For example:
One Beacon Street is a 1.1 million square foot tower. It was sold in 2000, 2004 and 2006. Each time, the BRA wrote up a Cooperation Agreement for $1.1 million to be paid to the BRA as a “voluntary contribution” by the owners for "affordable housing" and other purposes. Since 2000, One Beacon has been spared an average of $5 million a year in property taxes via the 121A. In short, the BRA, to rake in $3.3 million in kickbacks, has cost the City of Boston about $40 million in property taxes since 2000.

Dorchester Salvation Army Kroc Center

The Salvation Army decided to build the Kroc Youth Center in Dorchester. The Salvation Army wanted to assemble a large parcel. The Mayor instructed the Department of Neighborhood Development to give the BRA 24 parcels of City-owned land for the Center. The BRA got an appraisal for all the parcels, totaling $2.4 million, and sold it to the Salvation Army for that amount.
The City taxpayers got zero. The BRA got $2.4 million. If Menino wanted to sell this land to the Salvation Army, he should have sold it to them directly from the Department of Neighborhood Development and the taxpayers would have received the money for the land they owned.

Post Office Square

This site is almost two acres of City-owned land, which was used as a leased garage for years. It got a 121A tax exemption for the land, and the developers built themselves a fabulously profitable subgrade garage. They put landscaping around the ramps, and that’s what became Post Office Square Park.
The garage pays nearly nothing to the City despite all the promises. The 121A subsidy covers park maintenance multiple times over. The garage is assessed by the City at $74 million (although the real value is probably far higher), on which the normal commercial tax would be $2.2 million a year. No payments are being made, according to the latest City Collections Office document available. The land itself is valued by the City at $30 million – almost $1 million in taxes should be paid just for the land.