DiMasi letter to Patrick about Columbus Center
Following is a copy of the letter that House Speaker Salvatore F. DiMasi and two other Boston lawmakers sent to Governor Deval Patrick, protesting a $10 million grant to a private development in downtown Boston.
Dear Governor Patrick:
Your administration recently granted $10 million to Columbus Center, a hotel-and-luxury-condominium project along the Back Bay-South End border, and is said to be weighing a request for another $10 million. We believe this is a misuse of taxpayer dollars that should be stopped.
We represent the neighborhoods surrounding the Columbus Center project. For nearly 10 years, we have worked together and with our constituents to review the Columbus Center proposal, including its financials. Throughout the process, the developer promised that it would not use public funds to build the 1.4 million-square-foot project. After city and state agencies approved the project, the developer reversed course and began seeking ever public subsidy possible, a bait-and-switch ploy so egregious the state Inspector General is investigating.
A large deck over the Massachusetts Turnpike-like the one the Prudential Center sits on-would support the Columbus Center. During the public approval process, the developer claimed that the project had to be larger than allowed to accommodate extra hotel rooms and condos that could generate cash to help pay for building the deck. Then the Turnpike Authority used those same deck costs to justify charging the developer below-market rent when it negotiated the project's lease for Turnpike air rights.
Now, the developer says that the recent $10 million grant awarded by the Executive Office of Housing and Economic Development will help defray the cost of building the deck.
Just how many times are the taxpayers going to pay for that deck?
The $10 million comes from a fund the Legislature established last year to provide grants to stimulate the creation of badly-needed manufacturing jobs. We intended for the money to underwrite targeted investments by companies and governmental agencies to help the state's economy expand. We did not set the money aside to help a private developer build million-dollar condos.
You make much of the Legislature's earmarking money in the state operating budget. However, we did not earmark the funds used to subsidize Columbus Center, and the misuse of these funds is a perfect example of why the Legislature goes to the trouble of earmarking. If we had been more specific about how these funds could be spent, we could have prevented this type of corporate welfare.
We believe the development team should respect the Commonwealth's taxpayers by completing this project without public funds. An independent consultant who reviewed the developer's private financial data during the regulatory review process determined that Columbus Center could be financed without public subsidies or assistance.
This is not a situation in which the use of public funds will make the difference between a project being built or not because it is financially infeasible.
Throughout the project review process, the development team justified the project's extraordinary height and density by asserting a need to provide investors with a rate of return of at least 18 percent. We think the investors could certainly get by on a 10 percent or 15 percent rate of return, a tidy sum by any measure. We don't begrudge them or the developers a reasonable rate of return, but let the real estate market work its magic and generate the profit, as it almost certainly will.
Our constituents pay taxes and expect us to use that money wisely. We take seriously our duty to spend tax dollars prudently.
Prudence-and the numbers-tell us this is not a wise use of tax dollars, and we hope you will reconsider this grant and find a job creating use for this $10 million.
Sincerely
Salvatore F. Dimasi
Speaker of the House
Byron Rushing
Second Assistant Majority Leader
Martha M. Walz
State Representative
