This story ran on page A01 of the Boston Globe on 5/26/2000. © Copyright 2000 Globe Newspaper Company.

Kelly willing to reopen pact on fees
Mayor seeks to renegotiate linkage payments to S. Boston

By Stephanie Ebbert and Stephen Kurkjian, Globe Staff, 5/26/2000

Mayor Thomas M. Menino and City Council President James M. Kelly of South Boston have agreed to reopen a controversial agreement giving South Boston the bulk of developers' fees generated by waterfront construction

Under heavy pressure from other city councilors, Kelly and Menino said they will soon revisit the two-year-old agreement that promised South Boston the majority of linkage fees and the right to negotiate additional lucrative ''community benefits'' packages from developers of the South Boston Waterfront

The Globe reported Wednesday that the deal could reap $65 million to $75 million for the South Boston Betterment Trust, a private, nonprofit affordable-housing group appointed by the neighborhood's political leaders

''I don't want to be perceived to be greedy, or that South Boston has everything,'' Kelly said last night

Kelly said yesterday he is open to significant changes in the agreement. However, he said he would only consider renegotiating its linkage provisions, which give South Boston up to 51 percent of developers' fees, or as much as $35 million. Usually an affected neighborhood receives only 10 to 20 percent of the proceeds

Kelly said he wanted to discuss with other South Boston officials how much of the linkage funds could be redirected to other neighborhoods. However, he promised it would be a ''meaningful'' amount

Menino, who critics say ceded too much to Kelly under the memorandum of understanding, said he was hopeful of reaching a compromise with Kelly

''I want to make sure the whole city shares in the benefit of the waterfront development,'' Menino said

Willingness to renegotiate marked a dramatic shift in tone for Kelly, who on Wednesday vehemently defended the neighborhood's right to protect itself against change brought by development

Kelly said last night that he has heard the concerns of those who have criticized the pact as lopsided and unfair

''I obviously have to make sure that we have affordable housing built in South Boston,'' he said. ''I have an obligation to do that. But I certainly want to help people in other neighborhoods as well.''

Areas of disagreement loom between Menino and Kelly. The mayor said he expected the community impact fees, which Kelly has not committed to discuss, would also be on the table. Developers have complained about these fees, charged for inconvenience to the community, alleging that fee negotiations have been drawn out unreasonably by South Boston's elected officials and community appointees

Menino said future negotiations over community benefits for waterfront development should be conducted by the Boston Redevelopment Authority and not exclusively by South Boston neighborhood leaders

''The BRA should be the ones to discuss that with the developers,'' Menino said

City Council members have expressed outrage over the March 11, 1998, deal because of the unusually high share of payments going to South Boston. Several said they had fielded calls from angry constituents who demanded to know how one neighborhood had been allowed to gain most of the proceeds of development in a formerly undeveloped area

Councilors said that they had had too little time to grasp the full impact of the agreement before they adopted it. They received it on the morning they were asked to vote on funding for a new convention center - a high-pressure vote, backed by labor and the mayor, and used by Kelly as leverage to get the memorandum of understanding passed.

The agreement grew out of a weeklong private negotiation between the BRA director at the time, Thomas N. O'Brien, the mayor's former chief of staff, David Passafaro, and South Boston's elected leaders. The council authorized Kelly to lead the negotiations, and the pact was signed by Kelly, O'Brien, state Senator Stephen Lynch, and Representative Jack A. Hart Jr

Furthermore, councilors said they had not realized that huge amounts of money could be raised through the community benefits provision. The agreement allows the trust and South Boston elected officials to negotiate with developers whose projects affect the neighborhood, especially those of heights exceeding 150 feet

Noting the reference to height in the document, councilors said they believed it was written to discourage skyscrapers rather than to generate fees

''Senator Lynch said absolutely no going above the height, so we didn't even feel that was something that was going to happen,'' said Councilor Maura Hennigan (Jamaica Plain)

Lynch denied yesterday that he had misled any of the council members. He said he had made it clear that the agreement allowed for the community to receive financial compensation on top of linkage fees. He also denied saying that buildings above 150 feet would be barred

The community benefits package is already promising to generate more money than linkage. In the first deal likely to be completed, developers of the hotel accompanying the convention center agreed to pay $6 million in benefits - more than the $4.8 million generated by linkage payments

None of the money has been received, though negotiations are underway with several developers. In an annual financial disclosure statement filed yesterday with the attorney general's office, the South Boston Betterment Trust declared it had just $23,156 at the end of last year

Kelly said he would not compromise South Boston's ability to collect community benefits packages, because he thinks the neighborhood deserves mitigation money, particularly for tall buildings

Without such settlements, he said, the neighborhood would probably reject any building over 150 feet. ''There has to be a carrot at the end of the stick,'' he said

The disparity of the benefits offered to South Boston has generated anxiety among housing advocates, who have been pressing the city to do more to respond to a housing crisis citywide. Minority leaders and advocates are preparing legal action to challenge the agreement

''We're still intending to move forward,'' said Nadine Cohen, of the Lawyers Committee for Civil Rights Under the Law, of plans for a joint legal action with the NAACP

Citing statements by Kelly and a loophole in the agreement, advocates have expressed concern that much of the affordable housing built by the Betterment Trust could exclude minorities. They noted that because community benefit payments are privately negotiated and disbursed, they are potentially exempt from the stringent Fair Housing Act provisions that require government-subsidized housing to seek out potential tenants from a racially and geographically diverse pool

Menino said last week that while he could not guarantee the housing would be racially mixed, he would not allow discrimination

This story ran on page A01 of the Boston Globe on 5/26/2000. © Copyright 2000 Globe Newspaper Company.


Although linkage fees may impact the planning of the South Boston waterfront, SAND has not been involved in linkage discussions or stated a position regarding these or other offsite exactions required from developers for approval of their waterfront projects. Instead, SAND continues to train its focus on the actual proposals for onsite construction, as these development projects are obligated to fulfill a broad public vision for the emerging waterfront.

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