Strange Bidness.
By Jim Conley • Sep 20th, 2006 • Email This Post to a Friend •
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During last week’s TMMA meeting, Economic Development Advisory Board Member Paul Saner (before doing the Brookline punch and run) mounted a vigorous (and highly defensive) defense of the Town’s dealings with developers of the Webster St. Hotel, which sits on Town-owned property.
I thought the man doth protest too much, so I went back to my files. In looking through them, it struck me as odd that the Town had issued an RFP that asked for plans to purchase the parking lot and build a hotel there, but ended up with a lease.
Four bidders responded to the RFP, and the Town awarded the bid to a group led by Richard Friedman of Cambridge’s Charles Hotel. According to Saner last Monday, the financing for the deal was made difficult by several factors and Friedman’s group brought in the Harvard Endowment as a “venture partner.” Also according to Saner, a move to a lease was a result of the tough financing environment.
So yesterday, I asked Town Administrator Richard Kelliher why the other respondents were not afforded the chance to reconstruct their bids once Friedman was given the option to lease.
Here’s his response:
“Without necessarily accepting the premise that you ascribe to Paul Saner, my general recollection (if it were to be refreshed by researching this matter that is now several years old) would likely be that all interested parties–those involved directly with the RFP process, the town government at large, and the hotel industry itself–had seen the process move appropriately far enough along the path set by the initial RFP that it would have defied their commonly shared business expectations to halt the process and basically start all over again at the point in time implied in your question.”
I have to get out my Lewis Carroll decoder ring before I can even begin to understand what that means. Except, that it seems to say that the Town’s political arm made a decision to move ahead with a project that was substantially revised from the previous RFP, without determining whether a better deal could be found for taxpayers.
Now why would they do that?
More to come…
Jim Conley is publisher of On Brookline.
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Jim,
A few disclosures before I get to my post:
1) I am not currently a resident of Brookline. I lived there from 1998 to 2003.
2) Like the town Adminstrator, my West Roxbury address has not dimmed my interest in Brookline politics.
3) I love your website. Your exposing and (sometime skewering) of self-aggrandizing, bloated, do-nothing bureaucrats is a great spectator sport.
However, on this point, I don’t think you have much of a tree up which to bark.
1) Retaining the ownership of land is always preferable, providing that the present value of the lease payments over time was the same as the market value, of course. Brookline citizens will get another “bite at the apple” 100 years from now, or whenever that ground lease expires. To me, Saner’s comment seems to betray a lack of understanding regarding land leases, not an indication of something nefarious.
2) I think I understand what Kelliher is saying (scary, huh?), and I agree. Just because one component of a chosen developer’s plan changes, it doesn’t mean that putting the entire deal out to bid again is the right thing to do for the town. Presumably, you pick a strong developer who can adapt to changing market conditions as they arise, and still subtantially compete what the town and the developer said they were going to complete.
Thanks,
John
Interesting points. My interest (as always) lies in how the decision was made and by whom. When the recaps of the bidder presentations (written by the Town’s economic developer) say things like: “We love Carpenter’s energy!”, you begin to worry about the entire process.
John says:
” 1) Retaining the ownership of land is always preferable, providing that the present value of the lease payments over time was the same as the market value, of course. Brookline citizens will get another “bite at the apple” 100 years from now, or whenever that ground lease expires. To me, Saner’s comment seems to betray a lack of understanding regarding land leases, not an indication of something nefarious.”
I don’t think “ownership of land is always preferable” else there would be many more ground lease arrangements than purchases in fee. But the matter of equivalency as between a sale and a ground lease is critical. The issues involved are quite complex. I addressed many of the issues in two Guest Commentaries of mine published in the TAB titled: “Who’s In Charge? Part I” and “Who’s In Charge? Part II.“ (These may be available via the TAB’s Blog.) What is not clear is who in Brookline’s power structure takes credit or responsibility for negotiating this deal? Brookline public records made available upon a request by Jim (in which I participated) failed to disclose this. It was amazing to me that the records were so sparse on the making of the decision to lease and why the ground lease was so weak in protecting Brookline’s interests as lessor. It seems as if great care was taken to avoid a paper trail that would reveal details of all this. There is a danger in maintaining a paper trail, but there is also the danger that relying on winks and nods will result in bad deals. There were no CYA memos in the public records. Why? Because there were very few records of who made the decisions.
As to Kelliher’s non-responsive response, it is pure Orwellian.