Forest City zoning passes with possible loophole; Rossi OK’d as city manager (corrected)
Richard C. Rossi signs papers Monday approving his contract as city manager of Cambridge starting July 1. (Photo: Marc Levy)
The developer Forest City got its zoning change Monday from the City Council and is able to move ahead on proposing a building for Millennium Pharmaceuticals near Central Square. The company introduced its plan for a 246,716-square-foot building at 300 Massachusetts Ave. on March 22, and can now go to the Planning Board with specific design proposals.
That 11-month slog (including an expiring petition and its refiling) had many obviously weary of the issue, and the vote came despite pleas by some to delay at least another week to close an apparent loophole.
The 9-0 vote to approve the zoning change came during a five-and-a-half-hour council meeting that also saw approval of a $990,000, three-year contract to promote Deputy City Manager Richard C. Rossi to city manager starting July 1, when current City Manager Robert W. Healy retires.
The Forest City zoning change means Millennium can have a building reaching as high as 95 feet in parts, not counting a “penthouse” of heating and air conditioning machinery, while the zoning in place until Monday’s vote allowed up to 80 feet and mechanicals. Residents complained that the lab use was inappropriate because there are residential areas nearby, and they worried that the building’s noise would disturb them.
Housing concerns and concessions
But as with recent meetings about Forest City, the main concern of residents and some officials seemed to be whether Forest City would deliver on promises of affordable housing.
And as with those recent meetings, officials for the company had concessions to offer.
They included tying a payment of $5 million for failure to build 25 units of affordable housing within seven years of a certificate of occupancy being issued to the consumer price index or a increase of 3 percent per year, whichever is greater – turning that $5 million into at least $6.2 million, said David Maher, the councillor who led the zoning request process through his Ordinance Committee.
In addition, extending the life of 168 units of affordable housing on University Park – the area created by the developer on Massachusetts Institute of Technology Land that has become suddenly a bit larger with the zoning change – is now tied to Forest City, “its successors or assigns,” meaning the promises of up to 75 years of affordability must be kept even if Forest City doesn’t stay the lease holder.
Councillor Craig Kelley, who asked for clarifications on both concessions from other elected officials and City Solicitor Nancy E. Glowa, seemed satisfied about the 168 units but not with the answers he got about how Forest City could satisfy its promise to give the city the additional 25 units.
Loophole
Forest City has five options for providing the units, according to its letter of commitment to the city, ranging from building the units outright to “investment in and sponsorship of a project that will cause the production of 25 affordable units.”
Forest City’s executive vice president and chief operating officer, Peter Calkins, said Jan. 30 the company was already looking for a site so it could “deliver the housing ourselves.”
But to Kelley and vanBeuzekom, who led the alarm last year that 168 units of University Park housing would lose their affordability and turn market-rate, the option of “investment in and sponsorship of a project” seemed to offer Forest City a loophole: that it could put a small amount of money into another developer’s project, satisfying its requirement but resulting in fewer affordable units overall – because if it didn’t have the option, Forest City would build affordable units and the other developer would also.
“We shouldn’t be surprised if in a few years Forest City donates some certain amount of money, say $250,0000, to a development that will result in the production of 25 affordable housing units … and they say, ‘That was the investment,’” Kelley said. “If we’re not clear that can’t happen, we should probably hold off on this and make sure we’ve got it right.”
Kelley and vanBeuzekom proposed putting the vote off by a week or more to allow for the language in the letter of commitment to be perfected, but they met resistance from others who were sure Forest City wouldn’t use the loophole.
“We’ve got it right”
“I would say we’ve got it right,” councillor Marjorie Decker said. “How Forest City as a private corporation creates financial deals without public funding to get 25 units, I don’t care. I don’t think Forest City is lining up to give money to another private developer they’re not going to get a rate of return on. Let’s not fool ourselves – this is a business that exists to make money, and they do pretty well, I think, for their investors. My job is how do we negotiate with them to get the optimal rate of return for what we want.”
“If you’re worried about whether they’re trying to end-run us, if at the end of the day we get 25 new units because they somehow figure out how to be involved in that, that’s what we want: twenty-five units,” Decker said. “I don’t share [your] fears.”
“Twenty-five units is exactly what my goal was,” she said.
She went on to say she didn’t believe Kelley or vanBeuzekom really cared about the affordable housing – or knew something she and other officials had missed.
“It’s a little disingenuous to say that somehow all of us who are deeply, deeply committed to the affordability piece here somehow missed dotting our ‘i’s and crossing our ‘t’s,” Decker said. “It’s disingenuous and a little insulting to all of us who worked so hard to make sure the housing component was exactly where it should be. And it is.”
A preliminary vote to accept the letter of commitment as written was 8-1, with vanBeuzekom being the opposing vote.
Corrections: An earlier version of this story said Rossi was earning $990 million over three years rather than $990,000, and that the final vote was 8-1 rather than 9-0; that 8-1 vote is now mentioned above as being to accept Forest City’s letter of commitment. Cambridge Day regrets the errors.
This post may be updated.
I believe Councillor Decker was projecting. From my observation of this sorry mess and her role in it, I would conclude that she is the one who was insulting, and it appeared to me that the mayor, although she didn’t do anything about it, was also uncomfortable with Councillor Decker’s tone in these remarks when she asked Councillor van Beuzekom to elevate the discussion immediately afterward.
Much has been made of the dysfunction of this group of councillors. They act as though they have no idea why they can’t get along, but what I have seen week after week is insults, mostly directed at Councillors van Beuzekom and Kelley, but not exclusively. It seems pretty disingenuous to me for one of the most frequent offenders to be suggesting that the most common targets of her tirades are somehow insulting her because they want to make sure the supposed community benefit from this latest corporate giveaway actually happens in the way people intended. I will point out that she continues to spout the lie that we have a 15 percent affordable housing requirement for larger residential developments; it’s 10-11 percent most of the time, for which we allow the developer to build 30 percent bigger than zoning would otherwise dictate.
The Forest City zoning petition is about much more than affordable housing – it is a change in land use. Another problem I had with the Letter of Commitment, not mentioned in this article, is the ability of Forest City to simply convert 25 market rate units to affordable ones. Fulfilling their obligation in that matter is, in my opinion a disservice to those who care about housing not just about affordable housing.
BTW, I voted for the zoning change but not the flawed Letter of Commitment.
The heading for this story is misleading and disingenuous. I guess if you’re going for that Boston Herald “make’em click here” approach it works, but to characterize the proposal agreed to last night as having a “loop hole” is an outright lie.
I find it interesting that Minka is now interested in housing (generalized). I’ve never once in the two years of open discussion on this topic heard any councilor talk about general housing. That this should be an issue of contention at the final hour of decision making is suspicious.
But I digress, lets look at what was accomplished. The city wanted 25 units of affordable housing. Councilor Cheung had stated previously that he much rather have the housing than the money. In fact I recall other councilors lamenting much of the same. I never heard any of them say, “You know what, I think I’d rather have the money.” Not once did any councilor ever suggest this.
So, the 5 million set to increase by CPI over the course of 7 years past the date of issuance of a certificate of occupancy was, as I see it, a ticking clock penalty for nonperformance. Nothing more, nothing less. To say that there exists a “loophole” can only mean that you wanted the money. If you wanted “housing” as council van B. now suggests, there would have been some discussion about … housing. There wasn’t.
What if Forest City pays a penny for twenty five units? Did they do something wrong? You got the units you asked for. The council will get to show us whether or not they care about “housing” in the debates to come. I pray for the day when it will be politically correct so offer that mixed income housing is the only way to build; that market rate is just as important as low income.
The leadership demonstrated by Councilor Maher was nothing short of inspiring. I hardly know the man, but I couldn’t help but thank him in public comment because it was painfully clear to me how his leadership and skill turned this entire situation around. The city won, the citizens in university park won, forest city won, and everyone in the community won. A high water mark for anyone seeking a seat.
Councilor Decker too, was rather inspiring. Often I think though, that she exists in tandem. There is the councilor that I’ve seen berate public employees to the point where I felt like citing bullying statutes, and there was the politician I saw last night. Kudos Councilor Decker, you blew me away.
It was clear to see the frustration on the Mayor’s face as well as that of the other councilors who have worked diligently over the past TWO YEARS on this proposal. Councilor Decker was right to get fired up. The only councilors that I saw not working together were Kelley and Van B. Their questions made it seem like there was some debate that had been going on in another room, and they had just walked in. Loophole? No way.
So please Mr. Levy, change the title or simply announce that this is the Cambridge Enquirer, so readers at least discern if they can consider anything written here as legitimate reporting.
Cambridge Day addresses and aims to correct errors of fact, context or quote as quickly as possible, and readers are urged to identify those errors to be addressed. In this case, it is unclear where you’re saying the error lies. Two city councillors and at least one resident, Charles Teague, have spoken publicly to the possibility that Forest City could use one of the options in its letter of commitment in a way that would: save it money; make money for a second developer; and result in less housing for the city. When this issue was raised, neither city councillors nor the city solicitor said this was not the case, although officials did say they didn’t discern an intent to go that direction on the part of Forest City.
So there does, in fact, seem to be a loophole, and councillors opted to approve the letter of commitment and zoning without addressing it. If you can demonstrate this is not the case via testimony or the wording in a legal document accepted in this case, you are promised that information will be posted prominently.
Otherwise, or until then, please don’t say referring to a loophole is misleading or disingenuous, much less an outright lie — the reasons for referring to a loophole are right there in the text of the story, which is based in observable fact that we did, in fact, see, being right there in Sullivan Chamber on Monday. It can also be watched again at cambridgema.gov/citywebcast.aspx.
The goal of the council as stated by the majority was to get 25 units of affordable housing. That is what they will get within 7 years of a CO on the 300 block. How they get those units was not the over arching concern of the council which is why some flexibility was provided for in the agreement. What is they spent 4.5mil … would that be enough? I should point out the 5mil or even the fully realized 6.2mil won’t build 25 units.
A loophole by definition suggests that some obligation is trying to be avoided. If the “obligation” was to get 25 units of low income housing and Forest City provides just that, and there is no current way for them to avoid doing so, then there is no “loophole.”
Lets play a game:
What if they spent 2 mil, went out to the bond market, or went through HUD and got 83% financed, sold 4% tax credits to local lenders to pay for the remaining startup capital, then refinanced after the build at 20 mil? Effectively they would not “spent” the 5 million and made an additional 18mil! but viola! 25 units! Is that a loophole too?
So if you think that by paying less than 5mil to get that housing is a loophole I do not think you understand the intent of the deal nor the caveat of the 5-6.2 mil associated with it.
Councilor Decker stated as much when she countered Minka’s query. So, if you don’t care about the money, and only wanted the housing, again, no loophole. You don’t need legal memoranda to illuminate that very clear point.
It is this kind of reporting that creates unwarranted suspicion among citizens. I find it disingenuous clearly you see it another way.
And, again, the goal of asking for long-term promises on the 168 units and having offsite affordable housing and the reason the city and concerned residents are more appreciative of an offering of 25 units than 20 is: the more affordable housing, the better. (I’m not stating that as an immutable fact; I’m describing a mindset employed during much public conversation over the past few months.)
If that’s the approach, the city would have been better off asking Forest City to strike the “sponsorship/investment” option or add language saying the option can be used only to add to, not to replace, the number of affordable units that will be put onto the market by another developer.
Say there’s no “sponsorship/investment” option: Forest City builds 25 affordable unit within seven years and a developer named Desert Town builds another 25. The city gets 50 affordable units.
With a “sponsorship/investment” option: Forest City invests in Desert Town’s project. Desert Town builds 25 projects. The city gets 25 affordable units.
Loss to the town: 25 affordable units.
Obviously there are many different ways the option could play out, and Forest City could simply not use that option at all.
But the city spent quite a long time trying to get its desired outcome out of Forest City. As far as I can tell, and based on the publicly stated concerns of two out of nine elected city councillors, Forest City is now free to take the second scenario I described above as an acceptable, if not desired, outcome. Striking or amending the option to eliminate the loophole is a better way to guarantee the goal of “the more affordable housing, the better,” and I assume you apply the same kind of caution when you craft or sign legal documents: to achieve your goal, not just to set an obligation that the other signer must meet.
It’s not a slam against Forest City. It just seems like contracts should be written carefully to ensure they achieve the goals of the people writing them.
It is with pleasure that I both thank and congratulate Councillor Decker on her leadership with regard to her work on the Forest City zoning petition. Her continued focus on securing affordable housing opportunities for the people of Cambridge remains steadfast.
Both Marjorie Decker’s expertise and deep connections to the various stakeholders in this entire process has led to a great outcome – more affordable housing! The partners that she was able to assemble in this effort is much to her credit. The work of the team at Forest City, the Cambridge Economic Opportunity Committee, Cambridge and Somerville Legal Services, Alliance of Cambridge Tenants others, has all led to, in Councilor Decker’s words – doing her job ” My job is how do we negotiate with them to get an optimal rate of return for what we want.” I believe the outcome of twenty-five new units coming on line points to a job well done indeed.
In Cambridge, we often speak of our goal as increasing affordable housing stock. In this reality of dwindling public resources – this petition/project is how to get it done. Bringing all partners to the table in this endeavor has proven to be very effective.
Hats off to the team – and I wish Councillor Decker all the best as she leaves the frustrations of the Cambridge City Council behind. The larger arena in which she has just recently entered, the Massachusetts House of Representatives, will enable her to serve an ever-broadening constituency. I am happy to count myself among them.
There is nothing in this agreement that guarantees twenty-five new units, nothing. There could be zero units and a payment to the Affordable Housing Trust. Twenty-five of Mr. Barrett’s beloved market-rate housing could be converted to affordable housing, meaning no new units once again. Forest City could invest in some other developer’s project, which would arguably create no new units truly attributable to Forest City, since the project was going to happen without Forest City’s involvement, and this was just a cheaper way of getting this obligation out of the way.
The only thing I see as actually good in this deal is that the existing 168 units, which Forest City was supposed to do its best to keep as so-called affordable units for the length of its lease, are now governed by the maximum rent provisions of the inclusionary provisions of the zoning ordinance. I question why anyone would have made a deal back then for units whose occupants could only earn a certain amount of money that did not cap the amount of rent that could be charged, but that’s what happened. Fixing that was a good thing that will make people’s lives better right now. Everything else is speculation, including Councillor Decker’s beatification.