Assembly Square, the back story: A commentary by William C. Shelton

Assembly Square, the back story
Part 11: Yard 21

A commentary by William C. Shelton

(The views and opinions expressed in the commentaries of the Somerville News belong solely to the commentators themselves and do not neccessarily reflect the views and opinions of the Somerville News, its publishers or its staff.)

The narrow piece of land along the Southwest side of Assembly Square’s railroad tracks was once a switching yard. After a nine-nine month negotiation, the city bought the 9.2 acres from the MBTA in September, 2000, for $3.1 million. Another nine months passed before the city issued an RFP, that is, a request for proposals from developers to buy and redevelop the property.

In a December 20, 2000, meeting with redevelopment activists, Board of Aldermen President Kevin Tarpley said that the city was delaying the RFP, in order to give Assembly Square Limited Partners (ASLP) time to gain site control of properties surrounding Yard 21.

Senior officials of the Gay administration deny this and attribute the delay to the slow pace at which bureaucracy functions. I believe that their explanation is more plausible, even though ASLP did tie up the Garrity oil property during this period.

ASLP’s majority partner, Taurus, had owned the Good Times Billiards property since 1998, and Yard 21 negotiations had been public knowledge since January, 2000. Before the RFP was released, the Somerville Journal reported that, Taurus “had been ‘chatting with the city’ about the RFP, and had prepared a team of specialists.” It would, be surprising if Taurus had not tried to acquire additional parcels. Still, Tarpley’s statement heightened the activists’ mistrust.

In August, 2001, city redevelopment staff conducted site tours for twelve to fourteen interested developers. Mystic View encouraged developers to respond to the RFP who had demonstrated the capacity to carry out an office-based, transit-related land transformation. Some took the tour. Whether their perceptions were accurate or not, developers that Mystic View tried to recruit said that they would not spend the money to develop a proposal because the selection was a “done deal,” or “wired.” Forest City spokesman J Keily told the Boston Globe, that the company had been very interested, but could not tie up any of the surrounding properties.

No one expected a competing bid, but “Mystic Port,” a joint venture between Habitat for Learning and Cathartes Investments submitted a proposal. Their vision was to relieve pressure on local housing markets by creating a self contained community for 1,500 graduate students. They also committed to build over a million square feet of office space and 70,000 of neighborhood retail; give the city a free performing arts center; and guarantee an Orange Line Stop.

Their proposal would have generated twice the annual tax revenues at Yard 21 and 1,400 more permanent jobs (4,200 vs. 2,800) as ASLP’s proposal. They offered to pay $8 million, twice as much as ASLP, and they committed to begin development immediately and continue until the project was done.

Developer selection rested with the Somerville Redevelopment Authority (SRA), whose members are appointed by the mayor. Gay administration officials who have been consistently reliable sources say that they made no attempt to affect the SRA’s decision.
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They do acknowledge that they favored the ASLP proposal. While they thought that Mystic Port’s proposal was “bold and exciting,” it would require an MBTA easement. They also doubted that a 20-story office tower was economically feasible, and they were not satisfied that Mystic Port had the necessary commitments from investors.

The SRA did not take up the matter until October 25, 2001. They immediately went into closed executive session, and did so again on October 30 and November 5. They emerged on November 7 to announce that they had selected ASLP. One SRA member said that he thought ASLP’s proposal was “more buildable.” Several members referred to ASLP’s “financial guarantees.” If that meant guarantees to the city, I cannot find them in ASLP’s proposal or in the subsequent Land Disposition Agreement (LDA).

The city and ASLP did not execute that LDA for another seven months. Although city officials had said that redevelopment was too urgent to prepare a master plan, the LDA gave ASLP until 2009 to even purchase the land.

It did require ASLP to make a $410,000 “down payment,” and declining progress payments each future year, starting with $75,000 in 2004. The purchase price that ASLP will eventually pay is reduced by each payment.

Massachusetts law requires that buyers and sellers of real property from or to a city file a statement disclosing who will ultimately profit. Mystic Port submitted this “Beneficial Ownership” statement with its proposal. ASLP did not submit its disclosure until after the LDA was already executed. It listed only Taurus and Gravestar officers, rather than the wealthy German investors who were the ultimate beneficial owners.

One month before she was defeated in the 2003 preliminary election, Mayor Gay told me that ASLP was “holding Yard 21 hostage to get what they want on the mall site.” Today, Yard 21 remains barren. Although it is assessed at $8 million, the city collects no taxes. When FRIT eventually buys it, they will pay $4.1 million. Habitat for Learning is moving ahead in Malden.

Comments

Why are only Bill's stories subjected to this:?:

Posted by: Questionfred@army.mil | June 25, 2006 at 11:40 PM

Is there a page with links to all 11 parts of this series?

Posted by: Ron Newman | June 26, 2006 at 07:24 AM

This time the city is losing 15 million dollars. In a different way but still through the same incompetence.

It is not the Mystic view Task force, because they are not involved in all the other projects that suffer the same shady deals and set backs, there is another more common denominator here. Can you find it?

"is concerned that delays to the Somerville Avenue work could jeopardize funding for the reconstruction of Beacon Street. "

These other projects are suppose to get funded 75% by the feds, now the city has them screwed up and delayed. What is wrong here? All that money is going to go to Cambridge or Brookline instead of Somerville. As a result our home taxes are going to go up again. We need a profesionally run city.

Posted by: Lost Money, again? | June 26, 2006 at 08:45 AM

Regarding the first comment: presumably because 'The View from Prospect Hill' and 'NewsTalk' and 'Reality Bites' all do reflect the opinions of one or more News employees or owners.

Posted by: Ron Newman | June 26, 2006 at 04:11 PM