The fate of a lot at Moore and Harvard streets in Cambridge’s Area IV has been overseen for a dozen years by a group called Neighbors for a Better Community, but its work is drawing scrutiny from city officials.

The attorney general will be asked to investigate the spending of $1.6 million and suspicious transfer of land at Moore and Harvard streets by a community group in Area IV. Mayor David Maher said Monday that he will send the request as soon as the city’s Law Department finishes a timeline to accompany it.

The group, Neighbors for a Better Community, was set up in 1998 as a recipient of the money and 10,000-square-foot parcel from Needham-based The Bulfinch Cos., which had plans for nearby land and made the offerings to ease the path to a zoning change and development rights. By 2004, a tax return showed $772, 052 remained of the $1.6 million, and by 2008, assets were given as $584,611 — with nothing to show for it but a medical interpreter program at Cambridge College that began in 2001 at a cost of $100,000 that, according to The Boston Globe, came from various sources, not just NBC.

Even more curious is that the group’s money dwindled even though the land — intended for housing or a park or other community recreation use — was briefly bringing in rental income as a parking lot, city councillors say.

After a dozen years, the still undeveloped land was sold in October for $100,000. The city had earlier offered $450,000 to make the site into affordable housing, but the offer was rejected.

“The attorney for NBC countered that that was not a bona fide offer because it had restrictions on it … the evil Bob Healy was placing restrictions on the sale,” City Manager Robert W. Healy recounted. “Yeah, that was my condition: that the trust would allow money to be spent for Area IV through the community development department.”

The group resisted despite a successful history of that process with the former U.S. Trust building at Cardinal Medeiros Boulevard and Broadway, saying it wanted to decide who got money from the sale. Councillors scoffed at that story.

“This group, with no history of giving out anything,” councillor Ken Reeves said.

In addition, the buyer of the land, 131 Harvard St. LLC, was actually the agency that brokered the sale, which councillor Sam Seidel noted was a conflict of interest.

Missing oversight

Councillor Denise Simmons, who lives near the parcel, wanted money from the sale frozen and the attorney general approached for an investigation, but Healy doubted there was any such money and said the city had no right to make the request, although he hoped the attorney general would act on his own to “take a closer look at the financial filings of this not-for-profit, because they don’t appear to add up quite correctly.” Councillors opted to override those doubts when it came to approaching the attorney general by taking a Law Department summation — already under way by request of Simmons — and complementing it with an appeal from the mayor.

The situation has been a long time simmering. It has divided the community, splitting the Area IV Coalition as some members opted to accept The Bulfinch Cos. offer and others continued to oppose the zoning change it wanted, and NBC leader Jackie Carroll and her son Jonathan have meanwhile benefited directly, with Jonathan Carroll at times drawing a $78,000 annual salary as the group’s executive director.

The attorney general had oversight of the October sale and reviewed and passed it without comment despite questions about the broker, group finances and peculiar rejection of the higher sale price in favor of a below-market sale.

The city did call the sale to the attention of the attorney general, Healy said, as well as the group’s practice of hiring relatives as officials and consultants.

“Everybody who claims to be looking out for the people are not doing so,” said Reeves, during lengthy, impassioned remarks Monday about the long-standing situation and seeming evaporation of $1.7 million. “Everything I know about this cast of characters is that [the money has] vanished. The only thing that surprises me is that they haven’t vanished.”

“The community got ripped off,” Reeves said, “by people pimping the community.”

The Carrolls have been difficult to reach over the years or to get to attend meetings, councillors said.

While Reeves called the NBC case “the worst thing to happen in Cambridge in decades,” there are other examples of developers reaching agreements with community members that raise eyebrows in the city. Robert Winters, on his Cambridge Civic Journal site, wonders about another such case in the Alewife area:

A full accounting of the $195,000 payoff made a decade ago to 13 individuals who protested a project across the street from the Alewife T Station should be made public. That money was initially offered by Oaktree to the Affordable Housing Trust ($60,000) and the Mystic River Watershed Association ($135,000), but it was placed under the control of these 13 individuals instead after some legal conflicts. Where did the money go?

This post was updated June 8, 2011, to correct that the lot is 10,000 square feet, not acres.