Chairman Allen is Summerset Mum.
By Jim Conley • Mar 18th, 2007 • Email This Post to a Friend •
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An On Brookline Exclusive.
Over the past few weeks, I’ve been working on a rather curious item. Curious and convoluted, that is. It seems that Brookline Selectman’s Chair Robert L. Allen, Jr. is part owner (as trustee) of a condominium unit which was sold to a partner in his law firm for $18 thousand less than others paid (for nearly identical units purchased during the same period).
Big deal? Well yes, inasmuch that the sellers are the owners of a Brookline business who have a lot riding on the policies and practices of Brookline town government.
The property in question is a unit in the complex known as Summerset Grove Condominiums at 76 Summer Avenue in Stoughton, Massachusetts. The legal entity that owns the master deed to the property is 68-84 Summer Avenue, LLC. The managers listed within the corporate charter [see charter] are Joseph White and Mark Pearlstein.
In fact, one of White and Pearlstein’s other real estate businesses is well known to Brookliners – they own and operate Metro Realty in Coolidge Corner. They are also Allen campaign boosters, haven donated a combined $1,200.00 to Allen’s 2000 and 2003 campaigns for Brookline selectman (none was given in 2006).
The Paper Trail.
In October of 2004, Pearlstein and White purchased five lots of land hosting the Summerset complex (built in 1970) for $4.5 million and financed through a $3.75 million mortgage from Brookline Bank.
Soon after that, according to records in the Norfolk County Registry of Deeds, White and Pearlstein began signing over deeds for the units at Summerset. Many of the deeds are notarized by Sara Kirschbaum, an attorney and partner at the Law Offices of (Selectman’s Chair) Robert L. Allen [see partnership filing].
Among the stream of recorded transactions in 2005 are a deed and two mortgages (both with the same mortgagee) for a total of $175 thousand…all of which bear Kirschbaum’s name. The unit she purchased on April 28, 2005 for $194,900 is a two bedroom, one bath with a balcony. Nearly identical units purchased around the same time sold for an average of $212 thousand.
And today, similar units are listed at $212 thousand and $215 thousand.
Three days after the sale, Allen and Kirschbaum established a “nominee trust” called K and A Realty Trust, naming them both trustees. Then in August of 2005, Kirschbaum “sold” the unit to “K and A” for “less than $100.”
Of course, it’s impossible to determine from the filings if Allen is a beneficiary of the Trust (the name has to mean something), but I’m willing to bet he’s not a volunteer Trustee.
Was Allen using the K and A Trust to avoid the appearance of conflict in purchasing property (at a discount) from a business whose financial fortunes are affected by decisions made by the Brookline Selectmen?
I asked Chairman Allen that question and he hasn’t provided an answer.
Is There a Conflict of Interest?
Metro Realty manages a fair amount of apartment space in Brookline and these dwellings are subject to Brookline’s zoning by-laws. There’s also the matter of code enforcement – things like fire safety, occupancy requirements and general sanitation. (Remember, in Brookline all department heads are appointed by - and report to - the selectmen. Therefore, Allen is not a passive participant in the operations of town government.)
A realty group located in Coolidge Corner may have a stake in the outcome of deliberations by a District Planning Council (co-chaired by Allen) as it creates a zoning plan for that area, an area in which Metro makes a lot of money renting apartments. And it can’t bother a commission-based rental business that Brookline is among the least affordable communities in Massachusetts. It sure doesn’t seem to bother Allen.
When Chairman Allen (pictured left) was asked to declare any conflicts that might exist between his private dealings and his public work on the Coolidge Corner District Planning Council, he did not indicate any relationship with Metro Realty. Maybe it escaped him that he’s a Trustee on a piece of property where the owners of a large ($2.5 million in sales) Coolidge Corner rental agency hold the master deed (and that that the property was sold to the Trust at a premium).
In fact, the only conflict Allen disclosed in relation to the Planning Council was his placing of campaign signs on the property of Chestnut Hill Realty (who has plans for a residential development at 10 Waldo Street) [see disclosure form here]. But the Massachusetts Law governing conflict of interest for public officials says that a disclosure needs to be filed even with the appearance of impropriety in financial matters.
And it appears that the Summerset Condominium purchase is in the ballpark for disclosure. Alas, like most matters dealing with public integrity, it would appear that Chairman Allen couldn’t care less.
So I guess it’s not so curious an item after all.
Publisher’s note: I asked Chairman Allen several questions regarding this transaction and his role in it and he did not respond to my numerous inquiries.
Jim Conley is publisher of On Brookline.
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Down in the Okeefenokee Swamp, the ghost of the late Walt Kelly’s Pogo (I wonder if he celebrated St. Patrick’s Day) may be curious as to whether Bobby Allen is on the hook for any part of the $175,000 in mortgages that his law partner signed up for on this condo. In other words, did he take his interest as Trustee subject to and assuming the mortgage? Or is his partner out there on the financial limb all by her lonesome? Pogo is probably raising an eyebrow (do opossums have eyebows, I ask again?) with concern as to whether his sister Muddy River Swamp is having “Cornflakes of interest” again.
Regarding the bargain purchase price, there could be many reasons for it. Perhaps a case study of former California Republican Congressman Cunningham by the local US Attorney might shed a little light. I sure would like to look at the HUD statements that were (or should have been) filed for these real estate transactions.
As for the beneficiaries of the K & A (good name for a deli to be located in Allen’s Alley!) Trust, surely they are not the voters in Brookline.
Regarding the Coolidge Corner District Planning Council, I wonder if the names of the people who lock-stepped out of that recent meeting behind Bobby Allen depriving the meeting of a quorum, are available to check out in light of this post.
No Cornflakes for me, I’m a Cheerios guy. Now if only there were something to cheer about.
I wonder how the assessment for K & A’s condo unit compares with the assessments for comparable - but higher priced - units.
I assume that neither K nor A reside in the condo unit. It may be rented as an investment for the undisclosed beneficiaries or perhaps to accommodate a family member or friend (e.g. a Good Samaritan effort).
It does not seem as if the recent leak in the real estate bubble has impacted the value of K & A’s unit, such that the apparent bargain purchase just under two years ago remains a bargain. Perhaps K & A have a future in the real estate industry here in Brookline separate and apart from their law firm.
The full consideration paid for real estate is required to be disclosed in the deed. This is usually spelled out in terms of dollars, although consideration in any other form must be spelled out in such a way that the full consideration can be converted into dollar terms to calculate State documentary stamps that are usually paid by the seller. So the assumption here is that the full consideration paid for the condo unit was $194,900, with the benefit of mortgage funding of $175,000. Any bargain in the purchase price may have been the result of an intended, or unintended, gift. If, however, the bargain represented payment for legal services that had been performed for the sellers by the buyer (or her law firm) regarding handling sales of other units in the condo or otherwise, then such would appear to have constituted further consideration for the purchase that should have been disclosed in the deed. But from the four corners of the deed and comparison with comparable units, it seems to have been indeed a bargain, a gift, intended or not. And such a gift would generally not constitute income to the buyer. Of course, if the unit were sold at a profit, the gain on the sale (i.e., the bargain) would most likely be a long term capital gain taxed at much lower rates for federal income purposes than earned income in the form of legal fees. Who of us would look a gift horse in the mouth?
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