Monday, September 21, 2009

Menino wasn't being honest about approving tax breaks

(You can see Menino's signature on these tax giveaways here)

Menino sold tax breaks,
forfeited up to $40 million

September 20, 2009

Public records show that Mayor Thomas Menino and his
redevelopment staff approved three transfers of the 1 Beacon
Street tower’s MGL Chapter 121A tax break since 2000. The
transfers to new buyers served no public purpose, as the law

Without the transfers, the tower owners would have
paid the City an estimated $30-$40 million more in property
taxes than their negotiated 121A payments for these years.
The exact loss remains to be calculated, since it is not
established annually by Menino staffers as required by law.
No payments were officially needed to get these tax
breaks, yet the owners gave the BRA a total of $3.1 million in
“voluntary contributions.” Former BRA official Paul McCann
has admitted that while the BRA has no authority to demand
1 Beacon Street this money, it has been “BRA policy” for thirty years to collect
$1 per square foot every time the tax break is transferred to a
new owner.

The 1 Beacon Street skyscraper got the tax break in
1969 when the BRA declared that the tower would serve the public purpose of eliminating “blight” and public subsidy was essential. Developers of such projects agree to hold them for the full contract term, in this case, 40 years. The City cannot revoke such contracts unilaterally, but the 1 Beacon owners, wishing to sell, applied to the BRA to end theirs. The BRA and the Mayor approved the buyers’ requests to
transfer the tax break, even though the building is long completed, the blight is long gone and the buyers proposed no public-purpose improvements. The tax break could and should have ended with the first sale.

The 1 Beacon “contributions” are officially earmarked for affordable housing and improvements for the project, but BRA records account for only part of the $3.1 million, and show pay-outs unrelated to the tower, including checks to Clear Channel Communications, Inc. and the Downtown Crossing business association.
Menino has been betraying the people of Boston, selling tax breaks for money that is stored in the BRA, out of the city budget and out of City Council and public purview, for use by himself and the BRA as politically expedient.

How much taxpayers have lost through Menino’s tax break transfers, on this and other projects, is not known. In Boston, the City Council has no control over 121A decisions; but the Councilors have heard public testimony about 121A tax breaks, including this transfer issue, yet never investigated.

The 40-year tax break at 1 Beacon ended on September 15, but most of the “voluntary
contribution” money is still held by the BRA.

Mayoral candidate Kevin McCrea says, “Menino is cheating the people of Boston by selling years of tax discounts to amass funds that he and his development staff can spend however they wish. This money should be recovered from the BRA and put into the City budget, to serve our citizens. If elected, I will eliminate the BRA, end the 121A give-aways, renegotiate or terminate existing 121As, and ensure fair taxation citywide.”

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