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Amid investigation, Hyde/Jackson Square Main Street hires interim director

Posted by Matt Rocheleau  May 2, 2012 04:00 PM

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Hyde/Jackson Square Main Street has hired an interim executive director as police and prosecutors continue a 10-month-old investigation into possible financial irregularities within the city-funded nonprofit.

Jamaica Plain resident Katie Reed, who worked for four years as director of Allston Village Main Streets, will serve as interim director until a full-time director is chosen by the organization’s board.

“I look forward to moving Hyde/Jackson Square Main Street into the future,” said a statement from Reed. “There are a lot of great things going on in this neighborhood right now, and it’s exciting to be a part of it.”

The organization’s former executive director told the Jamaica Plain Gazette previously he resigned last July. The nonprofit’s lawyer later told the Gazette that the former director had been suspended.

Jason LaGorga, board president for the Main Street group, said this week that there is no timetable for when a full-time director will be selected and declined to comment on the investigation.

The investigation by Boston Police and the Suffolk County District Attorney’s Office into claims of financial irregularities at the organization is ongoing, police spokesman David Estrada said. Authorities declined to comment further on the matter.

The allegations were made when the organization’s board filed a police report requesting the probe last July. The police report lists the Jamaica Plain Neighborhood Development Corporation as the “victim.”

That nonprofit’s executive director, Richard Thal, said last summer that his organization's role had been "payroll processor" for the Main Street group since around 1998. The JPNDC performs that role for some other small nonprofits.

"As the bill was mounting over the years, [the Main Street organization] began noticing some problems," with their financial records, Thal said last summer. “It was common where their flow of funds would be cyclical.”

Debt in past years had grown to $5,000, $10,000 and even $15,000, and the Main Street group had always been able to pay that down, he said previously.

When the amount owed continued to climb in late winter 2011, “We started to get concerned,” according to Thal. JPNDC officials expressed their worry to the Main Street director around then. “we were told by the staff they would pay it down.”

But, the debt continued to climb and when it reached “a little over $20,000,” the JPNDC contacted the Main Street board last July to inform them of the situation, Thal said last summer.

“It was not uncommon for groups to get a month or two behind, but several months, and at this amount, was unprecedented," he said then. “In retrospect, I should have taken action sooner … I think it’s a lesson for us, if we’re going to consider doing it for another group in the future that we ensure we aren’t so exposed.”

A JPNDC spokeswoman declined to comment this week.

Lawyer Marc LaCasse represents Hyde/Jackson Square Main Street.

He said last summer that until the investigation is complete, “we’re really reluctant to make any statements.”

LaCasse said then that the probe involves retrieving a significant amount of documentation from third-party institutions, including banks – a process he expected would largely dictate the timetable for the completing the investigation.

Officials said no Main Streets entity in Boston has ever been the subject of an investigation before. The Gazette reported that the investigation led the city to audit all 20 Main Streets organizations, which represent commercial districts across Boston.

Founded in 1995, the Boston Main Streets program uses city funding to support business districts by improving storefronts and public spaces.

This week, Kerry O’Brien, a spokeswoman for the city’s neighborhood development department that oversees the citywide program, referred questions about the investigation to police and prosecutors conducting the review.

Last summer she said that: “The city is confident that the board will rectify this situation. The Mayor has ordered a complete review of their spending practices, independent of the [other two] investigation[s].”

O’Brien said this week that Mayor Thomas M. Menino is pleased with the hiring of interim leadership and that “Katie is a great addition.”

In announcing Reed’s hiring as interim director, LaGorga said in a recent statement: “So much development is happening in our area. New businesses are coming in and people have a lot of pride in living here. With Katie’s experience, I’m certain she can facilitate our growth and we can maintain our reputation as Boston’s premier Latin Quarter.”

In 2010, the city paid $30,500 to the Hyde/Jackson Square group for the executive director’s salary, officials have said.

Each Main Streets organization in Boston receives “financial and technical assistance and intensive training in the Main Street approach” from the city as well as the National Trust Main Street Center, the city’s website says. “Six full time staff" assist the local districts, which "also have access to city architects, design staff, transportation planners and technical assistance specialists."

Otherwise, the district-level organizations operate as nonprofits, each conducting their own fund-raising efforts within that citywide program. The organizations manage the funds they raise via their own independent governing structure, treasurers and financial records. The groups recruit their own volunteers and host events to enhance a commercial district’s image and attract consumers.

The city commits a “significant portion of its federal Community Development Block Grant funds” to Main Streets.

Grant funding, however, is issued directly to store owners from the citywide Boston Main Streets program, meaning it would not be included in the district-level financial records review.

E-mail Matt Rocheleau at mjrochele@gmail.com.
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