More details, but little action, in pursuit of Area IV charity

City Councillor Denise Simmons, seen last year, spoke passionately about preventing fraud by deceptive charities during a meeting Monday. (Photo: Liv Rachelle Gold)

Outrage and questions continued this week over what an Area IV neighborhood group did with $1.6 million and land that was given them to develop, with city councillors eager for action — possibly in court — and the city’s attorney counseling caution and patience.

At their meeting four weeks ago, Mayor David Maher vowed to ask the state attorney general to investigate Neighbors for a Better Community as soon as he got a timeline of its actions from the Law Department. The timeline arrived Monday, including details that added to councillors’ anger and desperation to act.

“It seems immoral, unconscionable. I mean, I’m just incredulous that this could happen,” councillor Denise Simmons said. “It says to us, one, that to make sure this doesn’t happen again we should put a process in place.”

City Solicitor Donald A. Drisdell said he had already been “in direct communication” with the head of the division overseeing nonprofit agencies such as NBC to raise council concerns and even ask whether the group could be dissolved.

The answer, though: not without an application to the state’s Supreme Judicial Court.

The city can’t sue, either, he said.

In fact, City Manager Robert W. Healy said, because NBC hasn’t filed certain financial forms with the attorney general for the past year, details of the land sale remain unknown.

“They traditionally allow for late filings,” Healy said of the Attorney General’s Office.

The group, Neighbors for a Better Community, was set up in 1998 as a recipient of the money and a 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 (which was never voted) and development rights. All money was to benefit the community in specific ways, but filings show the $1.6 million has dwindled with little or nothing to show for it while NBC leader Jackie Carroll and her son Jonathan “Jay” Carroll have drawn salaries and other benefits as group leaders.

The surrounding Bulfinch land has been developed while NBC’s lot languishes, its history made not much clearer by a series of public documents cited by Healy in the timeline. Until July 2007, for instance, the parcel was consistently valued at $450,000, but an appraisal done for the group put its value at $1.4 million. Jonathan Carroll wrote the city in October 2008 offering to sell it for $450,000, but when that fell through and it was put up for sale for NBC by Peter Racheotes in February 2009, it briefly carried an asking price of $1.1 million.

The asking price fell to $775,000 before Jonathan Carroll accepted an offer from the Cambridge-based Cascap housing nonprofit for $450,000 in August 2009 — then returned the deposit just over two months later, rejecting conditions on how money from the purchase had to be spent in the community.

A little less than a year later, on Sept. 10, the parcel was deeded to 131 Harvard St. LLC (named after its street address) for $100,000, seemingly leaving hundreds of thousands of dollars on the table. One of the LLC’s managers? Racheotes, who began marketing the parcel for a reported $1 million while Carroll deflected requests to renew negotiations with Cascap.

In April, the Attorney General’s Office confirmed that NBC had asked permission to sell to 131 Harvard St. LLC, and that it had been granted.

“In my discussions with the director of the Charitable Corporations Division it was made clear to me that that office did in fact review the sale of the property. It was not something that was just rubber-stamped,” Drisdell said. “They had discussions … and had concluded that the sale was appropriate. How many facts they had before them and how much information they had in regard to background is not clear.”

He later warned again: “We’re not privy to all the circumstances. There may be explanations for this we’re not aware of.”

A clearly frustrated group of councillors peppered Healy and Drisdell with questions, looking for a way to act. Would the people of Cambridge have standing to sue the group? Could the city sue on behalf of the neighbors? Can the attorney general’s office issue penalties? Is federal involvement possible if the group has broken tax law as a charity?

Drisdell expressed doubt, pleaded ignorance or promised research on councillors’ questions, cautioning them against acting rashly and without all the facts.

The calls for caution seemed to grate.

“I guess this is one of those times when it’s almost better not to be a lawyer,” councillor Henrietta Davis said. “Because if it looks like a duck, maybe it is a duck? And in this case, it doesn’t look like a nonprofit. Maybe it’s not really a nonprofit.”

Councillor Sam Seidel said his ordinance committee had begun work on policies that could prevent similar situation from occurring, and that his government operations committee would look at the issue as well this summer. Healy said he would try to report to the council on the matter at the Aug. 1 meeting — the only council meeting in the next two months — or at the first meeting in September.

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One Response to "More details, but little action, in pursuit of Area IV charity"

  1. Minka   Friday, July 1, 2011 at 8:15 pm

    I certainly agree that we need to prevent this type of problem from arising in any future “community benefits” discussions.
    However, I do want to remind readers that there are other examples when money was given to legitimate, long-standing neighborhood groups and the outcomes have been desireable. For example, look at the Area Four Neighborhood Coalition. We received $1M at around the same times and still have ~$200K in the bank. We have given scholarships, planted trees, helped create Squirrel Brand Affordable Housing, had block parties, hired part-time coordinator, and the list can go on. Just because one situation didn’t success, don’t assume that all neighborhood groups can’t handle funds.

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