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Chinatown group leaders defend controversial lease vote

Posted by Jeremy C. Fox  March 30, 2012 12:52 PM

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Rick Wong and Chungchi Che.jpg

(Jeremy C. Fox for Boston.com)

Rick Wong (standing at center), president of the Chinese Consolidated Benevolent Association, exchanged words with board member Chungchi Che (standing at right) at Tuesday's meeting. Che questioned why the organization didn’t publicly solicit proposals for the Herald Street site.

Current and former leaders of a Chinatown business and social-service organization are defending a controversial vote this week to offer a new lease to the C-Mart supermarket on property designated for the development of affordable housing.

In a wide-ranging interview at the organization’s headquarters, six members of the Chinese Consolidated Benevolent Association laid out their reasons for pressing forward with a lease that some members passionately opposed. The group included President Rick Wong, English Secretary Simon Chan, Chinese Secretary Larry Young, former President Gilbert Ho, former President Michael Wong, and Tony Yee, a former member of the asset committee that oversees properties owned by the association.

The six leaders explained that for them, the issue of renewing the lease or seeking another tenant or a developer was largely a question of hanging onto a stable tenant versus entering into an unknown and unpredictable situation at a time when the organization is still working its way toward financial stability.

“From the outside looking in, this looks like a poor man’s misjudgment, just an impulse action,” Yee said in the group interview with the Globe. “But this is all completely calculated, and the pros and cons and what helps the community the best. And after weighing in everything, you obviously will have to go with somebody who is there, willing to sign, rather than some question mark, like what’s going to happen there?”

A number of Chinatown figures, including some members of the benevolent association’s board of directors, said it has broken a promise to create affordable housing by either building on the site at the corner of Herald and Washington streets or using income from sale or lease of the property to fund development.

Instead, the organization has for years used lease income to pay for its operations, in violation of its 1983 agreement with Tufts University and the New England Medical Center that the organization would support the institutions’ growth in Chinatown in exchange for a site where it could develop housing.

According to a CCBA financial statement from last October, it used more than $1.2 million in lease income to pay for its operations from 2001 – 2011. A balance sheet shows just $175,592 in two accounts associated with the property.

Gilbert Ho, 2008 - 2009 president of the association, said in the interview that the group isn't financially stable enough to begin working with a developer.

“The thing is, we know our capability,” Ho said. “I mean, CCBA is not a big-time developer. This is our directors’ wish, to always want to maintain involvement with affordable housing. If some plan [is developed] in the future … we want to be part of it. We’re not going to just give it to someone to develop and then walk away with it.”

Ho pointed out that while the 10-year lease includes two optional five-year extensions, it also gives the association an option to redevelop the site with six months’ notice to the tenant at the end of the 10 years. He said by then the organization will be on a better financial footing and more prepared to develop housing at the site.

Ho said it could take that long to develop the site even if planning began now. Having served on impact advisory groups for several developments, he noted that some major projects proposed for the Chinatown area have languished for years, even a decade or more, before beginning construction, including the Kensington, Millennium Place III, and 120 Kingston St.

“They could afford to have that building empty,” he said, referring to the developers of the former Dainty Dot Hosiery building at 120 Kingston St., “but CCBA cannot.”

“I have a dream of being a movie star, but in the meantime I still have to work at Dunkin' Donuts to pay the bills,” Yee said, giving a hypothetical example. “CCBA has dreams of making it to this place, but as of now, we all have a fiduciary obligation to maintain the sustainability of CCBA itself, because waiting for five years, 10 years, could actually put CCBA under.”

The men said the organization has become more financially stable in recent years as it closed the sale on another property and paid off old debts, including attorney’s fees for past lawsuits and expensive repairs to its Tyler Street headquarters. They said it would no longer be necessary to use the lease income for operations and that under a new budget plan approved this week, they could begin repaying the restricted account set aside for that property.

They also stressed that C-Mart had come to the association asking to renew the lease, not the other way around. And they said the board had moved quickly because the supermarket’s owner had been willing to pay for much-needed repairs to the building’s leaky roof and its uneven parking lot, but only if he knew the supermarket would remain.

Simon Chan, who leads the asset committee that handled the lease negotiations, said the issue had been reported at a meeting of the organization’s board covered by the Chinese-language news media and that it was known throughout the Chinese-American community.

Asked why the property wasn’t widely advertised and a wider net cast for potential tenants or developers, the leaders said making an announcement at a meeting and letting the Chinese-speaking community know is the way they typically do things.

“Maybe we live in a bubble, but when we have the meetings, all the press comes,” Yee said, referring to the Chinese-language press. “And it’s kind of assumed and understood that all the reporters will then report everything for us to the community.”

Chan claimed that little notice was necessary if a property was desirable.

“Realty people are very smart. If they want to build something, they will approach you,” Chan said. “I can see that we didn’t make a 100 percent effort to publicize it, but on the other hand, anybody who come to us, our policy is anybody who knock on the door, we open the door.”

Addressing allegations that income from the C-Mart lease was improperly spent on operations, Ho said the use was considered a “temporary internal loan” and intended to be repaid. Rick Wong produced minutes from an April 27, 2004, meeting that stated that the organization’s board of directors had voted to approve borrowing from the account, though the practice had actually been established years earlier.

“The moment the property was acquired was the very moment that those funds have been used for operations for CCBA, which is 1985,” Yee said.

Ho said that when he was treasurer in 2006-2007, he began documenting the use of lease funds for other purposes.

“The intention for our using the funding is to maintain the CCBA, the longevity and sustainability [of the organization] in order for us to maintain its health for running the nonprofit organization and affordable housing like Tai Tung Village and Waterford Place,” Ho said, referring to two affordable developments owned by the group.

“If the organization is not healthy, how can we manage the affordable housing?” Ho asked.

Rick Wong said the income the organization makes from rentals of spaces in its headquarters building at 90 Tyler Street and its parking lot has not been enough to sustain all its expenses. “And that is the only reason we use that kind of money,” he said of the lease income.

The men said they had worked in recent years to create greater transparency and accountability for the organization, recording and making public longstanding practices within the organization.

Wong said he will launch an investigation going all the way back to the association’s acquisition of the Herald Street property in 1985 to address allegations that it has misused funds from the property, and the results of that investigation will be made public.

Email Jeremy C. Fox at jeremycfox@gmail.com.
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CCBA HQ.jpg

(Jeremy C. Fox for Boston.com)

The Chinese Consolidated Benevolent Association headquarters building at 90 Tyler St.

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