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Winn Some, Lose Some

by Bill Dusty

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With this years’ state budget shortfalls and Governor Deval Patrick’s recent announcement of layoffs and budget cuts, local municipalities are left wondering which pet projects and pork barrel favorites may be the targets of the Governor’s fiscal ax. Patrick has said that state aid to cities and towns will remain unaffected – for now. But the future is murky, and promises are not kept forever.

Here in Springfield, many residents have their own concerns about which programs may or may not survive the state’s cuts. And still other residents have their personal wish lists.

In the Forest Park section of Springfield, the battle lines have been drawn out for months, now, as two neighborhood associations have spent nearly the entire year squaring off over the fate of the currently vacant, former Longhill Gardens Condominiums project. For the Forest Park Civic Association (FPCA), selecting an apparently pre-approved developer to resuscitate the properties was a simple matter of a show of hands at an annual meeting. For the folks over at Springfield Forward, meanwhile, the FPCA meeting was a rubber-stamp job that was heavily tainted by questionable dealings on behalf of some members of the Association.

It all began back in the summer and fall of 2007, after the Longhill Gardens projects sank into receivership and were ordered shut down, vacated, and condemned by the courts. Unknown to many at the time, a Boston-based real estate management and development company, WinnCompanies (aka: WinnDevelopment), signed off on a letter of agreement that November with Citibank, the mortgage holder of most of the units at Longhill Gardens. That letter of agreement for the purchase of the property was contingent upon WinnCompanies winning state aid to help finance their redevelopment plans for the site.

On February 24, 2008, the FPCA hosted an annual meeting where a vote allegedly took place to support WinnCompanies plans. Another civic group, Concerned Citizens for Springfield (CCS), also voted in favor of Winn. But Springfield Forward protested both the votes and the conditions under which they were taken. That’s because according to state records, the FPCA and Concerned Citizens had board members serving with both organizations at the time of the voting. Yet both the City and the media reported the two votes as being two separate examples of “community support.” Furthermore, as a property owner at Longhill Gardens, with five units, Concerned Citizens could hardly be categorized as a financially disinterested party. Springfield Forward contended that the community at large should have been allowed to have their voices heard as well as been allowed to vote on Winn’s plans, the same as the board members of the FPCA and CCS. This reportedly never happened. Instead, both the Mayor’s office and Winn touted the FPCA and CCS votes as evidence of widespread community support for the Winn project. (Read more details on these events here.)

From the very beginning of this controversial episode, supporters of Winn have asserted that the Winn plan was the only viable plan to go forward with. The Intruder was specifically told by a city official earlier this year that going along with any other proposal was “impossible.” Pronouncements of Winn’s greatness and how efficient and successful they are have been heard repeatedly from their backers, both at the FPCA and at City Hall. But a closer examination of Winn’s operations in another Massachusetts city reveals a company that is perhaps not so efficient, and whose business practices may be best described by some observers as being unsatisfactory, to say the least.

In Boston, Massachusetts, folks had also been smitten by the charms of WinnDevelopment for a long time. Winn’s partnership with local manager Roger Cassin had promised to bring a luxury hotel and retail complex, called the Columbus Center, to the city’s economically-depressed South End. The project reportedly began a over a decade ago. Yet years passed with little progress made at the proposed site. meanwhile, the project’s cost had skyrocketed from an estimated $300 million to approximately $800 million.

Then, back in 2005, the Cassin-Winn partnership reportedly approached a non-profit group, Boston Connects, Inc., with a $500,000 enticement. According to a July 25, 2007 South End News story, Cassin-Winn promised the half-a-million dollars to Boston Connects in exchange for that group’s board of directors lobbying to get the Columbus Center site brought into a federally-designated “empowerment zone” that Boston Connects administered. From the South End News story:

In a move that appears to have deviated from typical procedures in Boston and some other cities administering empowerment zones, Columbus Center developers lobbied Boston Connects, Inc. the nonprofit group that administers the Boston Empowerment Zone, to expand the zone so that land slated for the Columbus Center development would be included within it. As part of the lobby effort, Cassin-Winn Development pledged to pay a “financial package” of $500,000 to Boston Connects if the group’s board of directors recommended to the U.S. Department of Housing and Urban Development (HUD) that the zone be expanded, according to minutes of Boston Connects board meetings that took place in 2005 and 2006.

State Representatives Marty Walz and Byron Rushing are both opposed to public funds being used for the Columbus Center project. And both representatives, too, were reportedly unaware of the arraignment until informed of it by South End News.

“This report raises a tremendous number of questions about the neutrality of a governmental agency that’s accepting money from an applicant,” said Walz in the South End News article, “and I want to hear from Boston Connects and the Mayor about why this money was being given from a developer to an allegedly neutral governmental agency that was considering an application from a developer that should be weighed on the merits, not whether the developer makes a payment.”

Said Rushing in the same article: “My guess is that other developers do not know that if they came to the empowerment zone board with a chunk of money, that they would be able to perhaps get the boundaries changed for them.”

In an August, 2007, story from South End News that followed up on the controversy, word came out that the U.S. Department of Housing and Urban Development (HUD) had opened an investigation into the Cassin-Winn payoff of Boston Connects on behalf of South End resident Ned Flaherty. According to the article, Flaherty complained that Federal money that was meant to alleviate poverty was instead being delivered into the coffers of a wealthy real estate developer.

“I’m glad we know that they have begun to take a look at this,” said Rep. Rushing in the article, “and I hope that their investigation will be thorough, but also I hope they will be transparent with us. The people who live around Columbus Center need to hear what HUD’s take is on this.”

One year later, one thing had become perfectly clear to everyone: The 11-year-old Cassin-Winn project had come to a grinding halt. A May 2, 2008, Boston Business Journal story detailed the carnage:

Today, after a decade of planning and debates, the area is a dreary vista of cyclone fences, idle machinery, dirt piles and construction signs that were meant to be temporary but have become fixtures of the local scenery.

Columbus Center is in limbo, and no one knows when it’ll emerge — a victim of escalating project costs and stalemates over funding.

The holdup this time was the city of Boston’s reluctance to fork over $15 million in “tax increment financing” until WinnDevelopment could verify that all of its other financing for the project was in place. Winn in turn was apparently arguing that it needed the city’s money for use as equity for that other financing, according to the Director of the Boston Redevelopment Authority, John Palmieri, in the same Boston Business Journal story.

State Representative Byron Rushing was quoted again in the Journal article: “I have no idea what’s going to happen, and I think it’s outrageous that we have a project that has essentially prevented any other proposal for air rights in the South End to come forward because they have complete development rights over this land.”

Four months later, in an effort to extract itself from the quagmire that the Columbus Center had become, Winn brought in two developers to help find a way to bail out the failed venture. Related Properties, out of New York, and Beal Companies, out of Boston, agreed to take on a “six-week, top-to-bottom review of the Columbus Center’s finances to determine whether the long-troubled project remains viable,” according to this Boston Globe story.

What will make their job even more difficult is the state’s decision to rescind promised funds for the project, as well as “significant” resident opposition. From the Boston Globe article:

In the 11 years since Winn first started planning the construction, Columbus’s costs have soared to more than double its initial projected costs, from around $300 million to its most recent estimate of $800 million. Moreover, Winn and MacFarlane failed to obtain a package of $35 million in previously promised state subsidies after the Patrick administration lost confidence in the developers’ ability to proceed. The project also encountered significant opposition from residents in the South End and the Back Bay over the size of the project and the use of public funds for what is mostly a luxury development.

Meanwhile, back in Springfield, critics of the Winn proposal for Longhill Gardens continue to be labeled as naysayers, outsiders or worse.

And the hero’s welcome continues for WinnCompanies, our city’s last, best hope to soak up taxpayer dollars.

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Posted by Bill Dusty on Oct 16th, 2008 and filed under Cities & Towns, City Hall, Politics, Society. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.