If this story was about something salacious, and not a parking garage, then maybe more Bostonians would care about getting jerked out of millions
The City of Boston and its residents own the Winthrop Square Garage downtown. So you’d think more than a handful of people would be angry that with all the budget cuts and broken schools in this city, officials have made decisions about the sale of said garage that could cost Boston more than $100 million in lost revenue.
The parcel isn’t much to look at. A shuttered two-story concrete eyesore, the Winthrop Square Garage is structurally insignificant compared to State Street and the other scrapers towering above. At the same time, it is extremely valuable. Because a large tower of up to 700 feet is envisioned for the property, estimates for the sale value are as high as $100 million, according to the Boston Herald, or even $200 million, according to citizen activist Shirley Kressel.
The City of Boston has the lot assessed at $32 million. Meanwhile, similar lots of land in Boston that house 700-foot towers are assessed at upwards of $140 million, such as the Hancock Tower. That is the land only, not including the building! The overall potential value of the parcel comes from Boston imposing no additional restrictions on the heights of buildings along airplane routes beyond any rules set by the Federal Aviation Administration.
At the request of Mayor Marty Walsh, last December the City Council 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 city (and therefore its residents) are to receive. Meanwhile, in a testimony in front of the City Council last summer, the BRA director suggested the property is worth as little as $10 million.
Immediately prior to the vote, city councilors received a thick packet of documents related to the sale. Notably missing from the information therein: an estimate of the value of the property, along with an estimate of BRA fees, both of which had been requested by councilors. No public notice was given, nor was information publicly distributed or put on the City of Boston’s website.
QUIET TRANSFER
After the administration turned the property over to the BRA in the winter of 2015, Kressel wrote a letter to the city pointing out the legal process that should have been followed. The City Council, whose main function is to keep spending and revenue in check, must vote to approve a transfer of the property. So last summer the mayor sent a belated order to the body for approval.
At a hearing in June 2015, city officials testified that they lacked the capability to sell the property. From there, the quiet transfer continued. In August, a council subcommittee on economic development reviewed a Memorandum of Understanding (MOU) that essentially passes proprietorship to the BRA, giving the quasi-public agency the power to take any and all fees they want. When the sale process is over, the BRA will turn over whatever net proceeds are left to the city’s general fund, but residents shouldn’t be too hopeful; remarkably, at the August hearing, a BRA representative recommended against making an official property value estimate.
Over the next few months, through the November election, the chairman of the City Council economic development subcommittee met with the Walsh administration and BRA lawyers and revised the MOU. As a result, the BRA can do whatever it wants with the property, for as long as it wants, and extract whatever fees it deems necessary. Later, when that’s all done, the authority will kick whatever’s left to the city’s general fund. To make matters worse, the BRA, which is not in the building business, can act as the initial general contractor, with all its costs and management fees subtracted from the city’s net proceeds, and none of the contracts it awards nor the people it hires subject to procurement laws that the City of Boston would have to follow.
Over a two-week period, I attempted to contact all the Boston city councilors who presided over this apparent subterfuge last year. I asked in writing:
- Who negotiated the deal?
- How much did the councilors think the parcel was worth?
- How much did the councilors think the BRA would charge in fees?
- When would the Citizens get the money into the General Fund
Nine councilors declined to respond. Only councilors Michelle Wu and Tito Jackson replied, with the former claiming ignorance about the backroom MOU negotiations and declining to offer her opinion on the Winthrop Garage property value, and Jackson saying he thinks the lot is worth between $30 and $70 million.
“I was not presented with enough information to vote in the affirmative,” said Jackson, who voted against the transfer. “There are several process and procedures questions I have. I want to make sure the citizens get the most value for the property.”
DEMOLITION
Mayor Walsh ran on a platform of reforming the BRA. Once elected, he even had an independent audit done which found extremely poor fiscal controls and record-keeping at the agency, among other issues. Nevertheless, in the case of the Winthrop Square Garage, the administration put the BRA in charge. The surrogate authority is now soliciting proposals for development on the parcel. There is reportedly interest from eight potential buyers.
Because the BRA is an independent agency, it is not subject to the same competitive bidding laws that the city would be made to follow. Instead, the BRA may sell or lease the land to whomever they choose, while extracting whatever fees they want in the process. The people of Boston will get whatever’s left. If anything’s left. According to no particular timetable.
Kevin McCrea, born in Boston, is a South End resident. A contractor and developer, he ran for Mayor of Boston in 2009.
