Tuesday, March 08, 2016
In January I contacted a local news organization to write an article on their behalf about how the City of Boston was disposing of Winthrop Square Garage downtown. They readily agreed and I spent a few weeks doing research and interviews. This is the story that I wrote: WINTHROP GARAGE The Citizens of Boston own Winthrop Square Garage downtown and it is likely the most valuable asset that will be disposed of on their behalf during Mayor Walsh’s inaugural term. Recently the City Council on request of the Mayor voted to give the property away to the Boston Redevelopment Authority (BRA) with an open ended agreement that doesn’t specify the time of performance, the fees to be charged, or the amount the Citizens are to receive. The parcel is currently a shuttered parking garage, but it is extremely valuable because a large tower of up to 700 feet is envisioned for the property. Estimates for the value of the property given at City Hall testimony last summer run from a low of 10 to 15 million given by the head of the BRA, to 100 million in the Boston Herald to a high of 200 million given by citizen activist Shirley Kressel. The City has it currently assessed at 30 million dollars. Land (not including the building) for similar towers such as the Hancock Tower is assessed by the City at roughly 150 million dollars. The Mayor ran on a platform of reforming the independent BRA. Once elected he had an independent audit done which found poor fiscal controls and record keeping at the agency among other issues. Regardless, the administration came to the conclusion approximately a year ago that no City agency had the expertise to sell this parcel of land and so gave the property to the BRA without up front renumeration to the Citizens of Boston. The BRA then started soliciting proposals and eight major developers expressed interest. Because the BRA is an independent agency it is not subject to the same competitive bidding laws that the City of Boston would be if they sell the property. These laws spell out how the property must be sold and the proceeds given to the Citizens. The BRA may sell or lease the land to whomever they choose whether a high bidder or low bidder in a possibly politicized process and extract whatever fees and costs they want, for as long as they want before turning over the remainder to the Citizens. After the administration turned the property over to the BRA, activist Shirley Kressel wrote a letter to the City pointing out that there is a legal process that must be followed before property owned by the Citizens of Boston, especially one that might be worth almost a billion dollars when finished, is disposed. Most importantly the Boston City Council, whose main function under the Boston City Charter is to be a fiscal watchdog on the executive branch, must vote to approve a transfer of the property. So last summer the Mayor sent an order to the City Council to have the transfer voted on and approved. There was a Boston City Council hearing in June where the City testified that it didn’t have the capability to sell the property, the head of the BRA testified that they could and should sell the property that they thought was worth 10 to 15 million dollars, and Mrs. Kressel and others testified that the property is worth much more than that and that the City should retain ownership of the property and control of the assets. At most, it was suggested to use the BRA as an agent to sell the property on behalf of the Citizens of Boston instead of giving the BRA ownership and control of the parcel. In August the City Council Committee on Economic Development chaired by Councilor LaMattina held a publicly noticed working session to discuss the matter. A Memorandum of Understanding (MOU) was put together for this meeting. The contract (MOU) essentially states that the City will give ownership to the BRA, the BRA can do whatever they feel is best for the property, structuring the lease or sale of the property however they want, they can take any and all fees that they want, there is no timeline for them to do what they want, and when they are done with this process they will turn over whatever net proceeds there are to the City’s General Fund, where the money can be used for any purpose. The councilors had a number of questions for the BRA such as how much are their fees going to be, how much is the property worth, etc. The BRA explained to the Committee that the BRA thought it best that they do NOT do an estimate of how much the property will be worth because if the City Council and the Citizens of Boston knew how much their property was worth before they gave it away to the BRA it might affect the bidding for the property by the 8 major developers. The working session ended with the Committee requesting the BRA provide the councilors with information and answers to questions. Over the next few months, through the November election, apparently unbeknownst to other City Councilors and the members of his Economic Development Committee, Councilor LaMattina met with the administration and BRA lawyers and revised the MOU. The outline remained the same: The BRA would be given ownership and control of the property, they could do whatever they want, for as long as they want, take whatever fees they deem necessary, and when they are done they will turn over whatever is left to the Citizens of Boston General Fund. The changed MOU “identified, tasks, costs and expenses that will likely be necessary”. These include site work, structural investigation, surveys, demolition, environmental remediation, utility work, and much office work and analysis. In other words, this-quasi governmental agency that is not in the building business, will act as the initial general contractor to prepare the property for further development. All of their costs and management fees would come out of the net proceeds of the property given to the Citizens of Boston. None of the contracts they award nor people they hire are subject to state and city procurement laws. Councilor LaMattina checked with City Council President Linehan, whose district the property is in, to see if he was okay with the MOU and he got the approval for the deal from Councilor Linehan. Allegedly no one else on his Committee knew about his negotiations with the City and the BRA, as there were concerns that if a majority of the members of his Committee were involved with the negotiations they would have to be done in public in accordance with the Open Meeting Law where other councilors and the Citizens of Boston could scrutinize the deal. The Committee on Economic Development never held another public meeting or discussion on the topic. On either the afternoon of December 8, 2015 or the morning of December 9, 2015 each City Councilor received a thick packet of documents and the revised MOU. The packet did not contain an estimate of the value of the property or any estimate of the BRA’s fees as requested by numerous councilors. The City Council held their weekly meeting Wednesday December 9 at noon. No public notice was given so that the Citizens of Boston would know that this valuable asset was going to be voted away that day. The MOU was never publicly distributed nor put on the City’s website where the Citizens of Boston could see the deal they were entering into through their legislative agents the Boston City Council. Near the end of the meeting, the next to last one of the 2015 year, after the election was over, the matter was brought up from the “Green Sheets” for consideration. The “Green Sheets” is a Boston City Council parliamentary device used to bring up any matter from the previous year, at any time, without public notice that it would be brought up at that particular meeting. This is done under the auspices that if the matter had been brought up sometime in the last year, then the public has been properly notified, and they should know that the City Council might vote on it sometime in the future. Even, such as in this case, if it had not been voted out of Committee, had been negotiated in private with the BRA and the executive branch, and the document being voted on had been changed from the document seen in public four months prior at the working session. Councilors LaMattina and Linehan spoke in favor of the deal and talked of how they held the BRA’s “feet to the fire” with this deal which was much better than other deals they had negotiated before. Despite the fact that the other Councilors had just received the packet and the revised MOU within the last few working hours, that the questions they had sought answers for in the August working session were not answered, there was not a single question about the deal asked by any of the 13 City Councilors. All of the male caucasian councilors plus Michelle Wu voted for it, all of the African American councilors voted against it. The vote was 10 - 3 and the property was voted away. Or was it? Activist Shirley Kressel who was involved in the largest winning Open Meeting Law lawsuit against the Boston City Council (full disclosure: I was one of the three plaintiffs in that case) was paying attention to these machinations and filed an Open Meeting complaint with the Boston City Council asserting that the process did not follow state law. As this article is being written the Council and Mrs. Kressel are in legal proceedings about how to rectify the situation. Over a two week period I (on behalf of the news organization) attempted to contact all 11 City Councilors who are on the body this year who were there last year. (There are 2 new City Councilors this year). We requested in writing: "Who negotiated the deal?”, "How much they thought the parcel was worth?”, "When they thought the Citizens of Boston would get their money from the deal?”, and "How much they thought the fees from the BRA would be?” Eight councilors declined to respond, one told us off the record a value of $30 to $70 million dollars, another council staffer told us off the record the process was ‘Very corrupt’. Only Councilors Wu who voted for the deal and Councilor Tito Jackson who voted against the deal responded. Councilor Wu indicated she did not know about the negotiations, would not offer her opinion of the value of the property, did not know what the BRA fees would be, or when the money would be realized. She did write that she cares about affordable housing and looks forward to having this money go towards that much needed endeavor. Councilor Jackson said he thought the property was worth $30 to $70 million dollars and voted against the deal saying: “I was not presented with enough information to vote in the affirmative. There are several process and procedures questions I have. I want to make sure the citizens get the most value for the property." No one at City Hall would tell me (or the news organization) who was involved with the negotiations. The Councilors either did not know or refused to answer. The BRA’s press agent said that they only provided lawyers to the executive branch to help in the negotiations and referred us to the Mayor’s press office. As of the deadline for this article no one in the Mayor’s office responded to our question. It was only from the legal proceedings of the Open Meeting Law complaint of Shirley Kressel that we were able to discover that only Councilors LaMattina and Linehan negotiated this deal in secret. The deal that not one of the other City Councilors had a question about on behalf of the Citizens of Boston. After I sent this article in to my editor, they told me it was "good work" and that they would publish it the following week after they did some fact checking. That was 3 weeks ago. Since that time they have not responded to my numerous phone calls or emails. That is why I am sending it to UniversalHub as I think it is an important story for the citizens to know about. Especially on a day when hundreds of students took the time to protest against cuts to their education funding. My sources now tell me that the BRA is planning on taking this property by eminent domain from the City of Boston in the very near future. They allegedly are going to take it for the reason of clearing up the title, even though the City of Boston currently owns it and the City clears title by taking land. They are planning on issuing an RFP (Request For Proposals) perhaps as early as next week with a quick time frame envisioned to award the property to a selected developer. The project would be designated as a “Demonstration Project” the same designation that was given to the Yawkey Way deal with the Boston Red Sox which is currently under legal challenge. At issue is whether the BRA violated the State Competitive Bidding Law Chapter 30B, and whether the BRA had the right to take ownership by declaring the booming area next to Fenway Park as blighted. (https://www.bostonglobe.com/business/2015/07/16/blight-yawkey-way-judge-says-way/rZd0V1XtbjTaOdTVE0c6gI/story.html) If the BRA takes the property by eminent domain it will completely circumvent the legal transaction from the Boston City Council having any input on the deal whatsoever. It would be a very interesting move to make just as the Boston City Council is currently debating whether to extend the urban renewal powers of the BRA which includes continuing to give the BRA eminent domain powers over large sections of the City. This eminent domain power can be used by the BRA without approval from either the legislative or executive branches of the government. In other words, they can use eminent domain without any public oversight through their elected officials. The BRA has been meeting with members of the City Council in private to lobby them to extend the BRA urban renewal powers.