City still gives permits to developers without financing
Mayor Menino never kept the promises he made last August to require developers to prove they have financing before getting City approvals (“BRA weighs time-limit for starting OK’d projects”, Boston Herald, 22 August 2008).
Indignant that he and his development staff were misled by developers of large projects, Menino last summer vowed to require proof of financing on every major venture thereafter.
But BRA officials now admit that the new rules they drafted to relieve the Mayor’s anger went nowhere. The BRA Board hasn’t adopted any new regulations. No new written procedures or forms are being used. No one in City Hall is enforcing Menino’s promise to strictly verify 100% funding before City permits get issued.
The closest thing to an official policy is just an unwritten concept that is verbally mentioned by BRA Economic Development Director Brenda McKenzie to some BRA staffers and a few developers. But neither her concept nor her remarks are in writing. And reminding developers that they need money to build doesn’t tell them anything that they don’t already know full well, so there’s no evidence that project reviews now are any stricter, or that fiscal data is checked any more closely.
BRA spokeswoman Jessica Shumaker said that since last August all large projects have been subject to more stringent financing criteria, but she was unable to identify any such projects by name, or to specify the tighter requirements.
Since 2007, four major developers claimed they had financing, began major excavation, and then halted work because they ran out of funds and couldn’t get any more cash, leaving gaping craters that hurt the City’s image:
• The $2,500,000,000 Fan Pier halted construction at its half-way point.
• The $800,000,000 Columbus Center air rights complex halted in March 2008.
• The $700,000,000 One Franklin tower halted work in November 2008.
• The $300,000,000 Longwood Center biolab halted work in November 2008.
To get approval for One Franklin, a 32-story tower and Boston’s largest downtown revitalization proposal ever, the owners told Menino and his development staff that they had 100% financing. Today, an open crater sits where the historic Filene’s department store stood for decades. Filene’s is gone, construction is halted, and there’s no schedule for resuming.
Most of the blame for One Franklin lies not with its owners, but with Menino and his development staff, who were so desperate to issue quick permits that they ignored zoning limits, waived required developer filings, and didn’t collect the required financial interests statement (“Rushing to a standstill; City allowed developers to skirt requirements in stalled $700m Downtown Crossing project”, Boston Globe, 26 March 2009). If the new rules Menino described last August had been in effect in 2007, One Franklin would never have received a building permit.
It’s unclear whether the new rules that Menino threatened to introduce were even necessary, because prior to their drafting, the BRA had previously sought financial data from developers, and had required formal financing plans. The difference, according to BRA Director John Palmieri last summer, is that the new rules would require stricter proof of funding, and not just hopes or plans to find future capital. But no new rules were ever published, and none are available today.
Menino spokeswoman Dot Joyce says the mayor does hope to ask developers more about their financing in the future, but he won’t require proof. “He doesn’t want developers discouraged by slow permitting,” she said.
BRA spokeswoman Jessica Shumaker says that there is a policy, but “it’s verbal, not written. Developers are invited to explain their plans, but there’s no new regulation requiring them to prove that they have financing.”
Urban planning activist Ned Flaherty, a long-time critic of the 14-year-old Columbus Center proposal, isn’t impressed. “Not requiring proof of financing just invites un-funded developers to claim they have cash that they don’t really have,” he says. “No unwritten policy can be enforced, so the BRA still has no new policy. All we have is a review process with loopholes, and four halted projects --- un-funded, and unable to re-start.”
Research and Report done by campaign supporter and citizen Ned Flaherty