The results of a recent audit of the Boston Redevelopment Authority may not be as grim as they seem. Though the report uncovered widespread institutional problems with the BRA’s record keeping and ability to enforce lease payments, many of the companies cited in the report have paid off their debts or have worked out agreements with the city to do so.
“There is another level of detail that the audit just wasn’t able to capture,’’ BRA’s director of communications Nick Martin told Boston.com.
According to the audit, Geekhouse Bikes, owned by Marty Walsh, owes the BRA $86,162. Marty Walsh – who is not the same person as Boston Mayor Marty Walsh, nor is he related to him – told Boston.com that the audit (which you can read in full here) didn’t present a complete picture of his company’s situation. It wasn’t Geekhouse Bikes that owed $86,162, but HQ Boston (Walsh owns both companies). The space HQ Boston leased had been vacant for years and needed, Walsh said, major renovations before it could accommodate his business.
“We took something that the city couldn’t do anything with,’’ Walsh said. He acknowledged HQ Boston fell behind on its payments in the past but said he’s paid the rent on time every month for the last year. He’s working out an agreement with BRA to repay the rest of the balance.
Michael Labadie, owner of National Color, said the amount his company was listed as owing the city in the audit — $93,118 — was inaccurate. It’s since been corrected to a lower amount and the company has also paid off what Martin described as a “substantial amount.’’
“It’s hard to keep a manufacturing company going in Boston,’’ Labadie said. “I’ve been behind a month or two in the past.’’ National Color has negotiated a new lease with the BRA, and Martin said it is up to date on its current payments.
Comcast, on the other hand, shouldn’t have the same kinds of issues that caused some small businesses to fall behind on rent, yet the audit said it owed the BRA $28,333. Martin explained that Comcast is a relatively new tenant, and lease payments to BRA have taken a while to get set up in the company’s system. Comcast now actually owes $33,333, but Martin expects it to be worked out in the next 30 days. A spokeswoman for Comcast told Boston.com: “Comcast has been in touch with the BRA/EDIC to expedite payment of the full amount owed to the city.’’
Two other companies named in the audit, Harborview at the Navy Yard and Richard Natale, have paid of their balances entirely, Martin said.
There are some debts listed in the audit on which the BRA is unlikely to collect. Mad Props, which owes $46,286, is no longer in business. Martin said the BRA hasn’t been able to work anything out with Newport Construction, which owes $30,834 (an email from Boston.com to the company bounced back). Bitwise, Martin said, will pay all it owes except for $2,500 and will voluntarily leave its space.
Pappas Enterprises, which has a longstanding balance of $295,908, has “a complicated history’’ with the BRA, Martin said. (Bitwise and Pappas did not respond to requests for comment.) It seems unlikely, though, that Pappas Enterprises is hard up for cash. A 2007 profile of Pappas Enterprises President Tim Pappas described his lifestyle as one that “rivals a movie star’s for sheer glamour’’ and his hobbies as including “racing cars, flying airplanes, [and] collecting expensive art.’’
Neither Walsh nor Labadie were exactly thrilled with the coverage their companies received when the audit went public. They noted that they’ve received calls from concerned vendors and clients as a result. Both were also largely positive when speaking of the BRA, saying the agency works with its tenants when they’ve fallen behind.
“It’s unfair to say they’re not working with us on collecting,’’ Walsh said of the BRA. “The mayor should talk to some of the businesses he’s critiquing.’’
While the BRA seems to be collecting most of the money it’s owed, Martin acknowledged that it has had its issues, and the audit will help the BRA improve on those fronts.
“It’s clear that in the past there was a lack of policies and protocols for addressing situations where rent was overdue or we needed to pursue an eviction with the tenant,’’ Martin said. But it’s also important, he said, for the BRA to try to work with some of the smaller businesses it leases to before resorting to those measures.
“We have to strike a balance,’’ Martin said.