Jul 27, 2014
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Rep Walz: Governor Signed Copley Place Lease Prematurely

99-year lease came as a surprise to members of Community Advisory Committee, which is still deliberating project details for the proposed Copley Tower.

Rep Walz: Governor Signed Copley Place Lease Prematurely

While reviewing the state’s recently renegotiated lease for the expansion of Copley Place — a project that was kickstarted earlier this month after being shelved in 2009 — State Rep. Marty Walz thought it odd that Governor Deval Patrick had already inked the proposed 47-story luxury condo tower above an expanded Neiman Marcus.

“One of the previsions in the lease is that the development plan for this project in detail is approved,” said Walz, noting that a section specifically outlining the project’s details, Exhibit H, was either omitted from her copy of the lease or has not been drafted yet. “Has the governor, at the insistent urging of the mayor, already approved the development plan? The lease appears to say that."

The alternative interpretation, according to Walz, is that Exhibit H was never attached to the lease, in which case the governor signed the document with substantive details mssing.

"That too is problematic if we have our governor signing leases without all of the appropriate information available to him," Walz said.

Walz, an ex-officio member of the project’s Community Advisory Committee, brought that information to the attention of the group during a Wednesday morning meeting. The Committee could submit its recommendations to the Boston Redevelopment Authority this fall.

But while Walz suggested that the Committee and BRA’s oversight of major shadow, wind and public space concerns might have been negated, MassDOT Director of Real Estate Peter O’Connor told the Committee that its input would still be valued and BRA approval has not been predetermined by the governor’s pen.

“We are saying the development that you are proposing ... that if you get that permitted, we will not stand in the way,” O’Connor said after the meeting. “We’re just saying we are not going to add any additional layer to the regulatory process other than the impact of the safety and the traffic in the [Massachusetts Turnpike] tunnel."

“If I were a developer I would want to know before I go through this lengthy and expensive regulatory process that I’m not going to go back to the DOT and they are going to make all kinds of different decisions that are contrary [to the Committee and BRA]," he added.

According to O’Connor, Copley Place’s original 99-year commercial lease, signed in 1978, had to be renegotiated with the Simon Property Group because the lease doesn’t allow for condos. And under condo law, the lease needed the governor’s signature because it is longer than 40 years.

O’Connor also said the renegotiated lease, which was extended to 2110, requires the developer to pay $2.5 million to help maintain the Turnpike tunnel underneath the parcel. $1 million has already been paid to the state and the remainder will be paid before the end of the year, he added.

“It was only because they wanted to do condos,” O’Connor said of the governor signing the lease. “When you get into condo law they had to get further approval from us. Then we took up a couple issues with them and said ‘Well we’ll allow you to submit it under condo law and give you permission but here’s what we want.’”

Patrick’s office did not immediately return a request for comment and Simon Property spokesman Les Morris declined to comment other than to say his group agrees with O’Connor’s explanation.

But Walz maintained that the state might have given up its right to amend the details of the project before a filing has even been made to the Massachusetts Environmental Protection Agency.

She said the tower’s dimensions and exterior features along with motor vehicle and pedestrian traffic mitigation could already be set in stone.

“I don’t understand how Peter can say ‘This is from 1978, we’re just restating the 1978 lease,’” Walz said. “There are many provisions in the lease signed on June 20, including all rental payments from the new building."

“So the state has already done some economic modeling as far as how much money it is going to make from this lease," she continued. "And the state has waived its right to approve significant changes in the development.”

State Rep. Byron Rushing shared his colleagues concerns and also took issue with extending the lease from 2077 to 2110. He said Copley Place’s lease should have been left alone and a separate lease should have been drafted for the new tower. When completed, the 47-story structure will be the tallest residential tower in the city.

“We have a 99-year lease so people will develop the land but also because we want to protect the public,” Rushing said. “I do believe the closer we get to the end of that 99-year lease the public should be able to engage the owner of the property and that’s not going to happen now.”

Judith Wright, who chairs the Committee, declined to comment on the lease other than noting that extending the lease was in the developer’s interest because buyers in the market for condos worry about land leases expiring while they are living on the property.

The developer will present a Draft Project Impact Report at the Committee’s next meeting at 8 a.m. on July 20 on the fourth floor of Copley Place.

“We’re picking up where we left off,” said Wright, who also chaired the Committee when the project stalled in 2009. “You have to reacquaint yourself [with the details]. I think the group is getting there."

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