Mount Vernon Co.'s Rent Stabilization Advisory Cmte. Connection-Pt. 2

In a Dec. 11, 2020 press release, YW Boston announced that--following the 2019 decision by YW Boston’s Board of Directors to “sell its 140 Clarendon Street YWCA Boston property in Boston’s Back Bay neighborhood”--it had “been committed to finding the right buyer to own” the building that would still remain “home to the YW Boston offices;” and that “Beacon Communities and Mount Vernon Company (MVC)” had now “entered into a purchase agreement with YW Boston.”

And nearly a year later, the Boston Globe noted in a Dec. 9, 2021 article that, although Mount Vernon and Beacon—“one of the city’s largest affordable housing operators”— obtained ownership of the 140 Clarendon St. property by paying the “non-profit” YW Boston nearly $52 million, “to cover” the cost of their “$100 million-plus project” the Mount Vernon and Beacon real estate deal-makers apparently “cobbled together an array of federal, state, and local” public “financing” for their non-municipally-owned housing project. In addition, the same article reported that Boston Mayor Michelle Wu “said her administration will continue to push these sorts of developments.”

Yet the Mount Vernon for-profit firm is “considered among the leading apartment landlords in Massachusetts” of non-rent-stabilized residential units, with “approximately 1,600 apartments” in its portfolio, according to the “real estate investment” firm’s website.

But according to a Dec. 9, 2021 City of Boston press release, the City of Boston Department of Neighborhood Development is providing Mount Vernon and Beacon with $8,039, 955 of public funding, in direct subsidies; and, according to a Dec. 9, 2021 Massachusetts Executive Office of Housing and Economic Development press release, the Boston Housing Authority (BHA) is also providing Mount Vernon and Beacon with “more than $6 million in annual subsidy” indirectly--in the form of Project-Based Vouchers for the tenants who eventually occupy the 210 planned residential units, after the 140 Clarendon St. building is “redeveloped” by 2024.

In addition, Mount Vernon and Beacon are also receiving state and federal tax credits creating roughly $60 million in equity, and nearly $6 million in direct subsidies from the Massachusetts Department of Housing and Community Development.

According to the City of Boston’s press release, “MassHousing is providing a $37.2 million permanent loan, a $20.3 million bridge loan, and $500,000 in Capital Magnet Fund financing” to Mount Vernon and Beacon, the “Bank of America is providing a Federal Low Income Housing Tax Credit and Historic Tax Credit equity in the amount of $43,975,833” to Mount Vernon and Beacon and “the Commonwealth is providing $23,575,000 of State Low Income Housing Tax Credit equity” to the for-profit firms that now own the 140 Clarendon St. building in the Back Bay.

In a Jan 7, 2022 article, the New England Real Estate Journal noted that “Tom Greeley of Newmark represented the YWCA Boston on the sale” of YW Boston’s headquarters building to Mount Vernon and Beacon.

And, coincidentally, between Apr. 30, 2021 and Feb. 7, 2022, Boston Mayor Wu’s campaign committee received over $3,000 in campaign contributions from the for-profit Newmark firm whose Boston office managing director, Tom Greeley, represented YW Boston’s board in this Back Bay “redevelopment” deal.

On Apr. 30, 2021, for example, Newmark Managing Director Tom Greeley, Newmark Senior Managing Director Michael Greeley and Newmark Executive Managing Director Jim Tribble each gave a $500 individual contribution to Mayor Wu’s campaign committee; and on May 3, 2021, Newmark Vice Chairman Michael Frisoli gave a $1,000 contribution and Newmark Executive Managing Director Tyler McGrail gave a $250 campaign contribution to the current Boston mayor’s campaign committee, according to Massachusetts Office of Campaign and Political Finance website data.

In addition, on June 30, 2021, Newmark Executive Managing Director David Markel also gave a $500 contribution to Mayor Wu’s campaign committee; and on Feb. 7, 2022 an additional $100 contribution was given to the Boston mayor’s campaign committee by Newmark Managing Director Tom Greeley.

According to the Newmark firm’s website, Wu Committee campaign contributor Martel “played a central role in the Boston headquarters leases for Bain Capital,” has “advised some of the best-known landlords and investors in the U.S.” and has represented The John Hancock Tower; and Wu Committee campaign contributor Michael Greeley “oversees the firm’s Boston Private Capital Group, an investment sales unit focusing on middle market asset sales and operating within the Boston Capital Markets Group under the leadership of Rob Griffin”--who is a member of the Greater Boston Real Estate Board that has lobbied against rent regulation in Boston for many decades.

Ironically, although it claims on its website that “YW Boston is dedicated to eliminating racism,” apparently none of the around 90 executives or associates working in recent years at Newmark’s 225 Franklin Street Boston office--whose managing director YW Boston hired to arrange its sale of 140 Clarendon St. to Mount Vernon and Beacon—has been an African-American.

Also coincidentally, the National Development firm of Brian Kavoogian--a member of Mayor Wu’s Rent Stabilization Advisory Committee—is partnering with Mount Vernon in a deal to construct mostly non-rent stabilized market rate apartments at 1170-1190 Soldiers Field Rd. in Allston-Brighton.

In the Jan. 7, 2022 New England Real Estate Journal article, Mount Vernon Chairman Bruce Percelay was reported as stating that Mount Vernon “brought in Beacon Communities” on its 140 Clarendon St. real estate deal “to navigate the Byzantine labyrinth of financial agencies to both fund the project and manage the property.”

And, not surprisingly, between Apr. 19, 2021 and Feb. 7, 2022, Beacon Communities board chairman Howard Cohen gave 2 contributions, totaling $1,500, and Beacon Communities CEO Dara Kovel gave 2 contributions, totaling $500, to Mayor Wu’s campaign committee.

Mount Vernon Chairman Percelay, himself, also gave a $1,000 contribution to Mayor Wu’s campaign committee on Oct. 15, 2021. And prior to Mayor Wu appointing a managing director of the National Development firm that Mount Vernon is partnering with to her secretive “Rent Stabilization Advisory Committee” in March 2022, Percelay’s real estate firm also apparently “gave Wu $15,000” to help fund her 2022 Boston mayoral inauguration event, according to a Feb. 14, 2022 Boston Globe article by Emma Platoff, headlined “Developers hedged their bets in the Boston mayoral race.”

In a Jan. 18, 2022 column that appeared in the Boston Business Journal, Percelay claimed that “140 Clarendon Street, a joint venture initiated by the Mount Vernon along with Beacon Communities” was a building that “could have been developed into a midmarket hotel or more apartments, but a path was found to create 210 affordable units—including those which are designed for the truly homeless.”

But even if no public funds were used by the City of Boston or the Commonwealth of Massachusetts to provide millions of dollars’ worth of corporate welfare grants to Mount Vernon and Beacon, Mount Vernon Chairman Percelay’s firm would have already still apparently been required to reserve at least 79 of the 210 “redeveloped” apartments in its 140 Clarendon Street building for low-income tenants until at least 2033.

As the Young Women’s Christian Association of Boston, Inc. and Affiliates Consolidated Financial Report of Dec. 31, 2020 (which was completed on July 1, 2021, a few months before Clarendon Residences, LLC’s post-2003 financial connection to YW Boston’s building apparently ended) that’s posted on the YW Boston website noted:

“YWCA Clarendon, Inc., was formed on June 27, 2003, and Clarendon Residences, LLC (a Massachusetts Limited Liability company (the Company) was formed on July 1, 2003…The building is composed of 79 QUALIFYING LOW-INCOME RESIDENTIAL UNITS and 105 market rate residential and transient units, including some unit operated as hotel units…

“Section 42 of the Internal Revenue Code provides for low-income housing tax credits…in rehabilitation of low-income housing…The Company has entered into an Extended Use Housing Agreement…The agreement REQUIRES THE PROJECT to maintain the provisions of Section 42 of the Internal Revenue Code for A MINIMUM OF 30 YEARS and TO SET ASIDE 79 RESIDENTIAL APARTMENT UNITS FOR LOW-INCOME OCCUPANTS.”

So, ironically, one of the real estate deal-making partners of a member of the current Boston mayor’s “Stalling Rent Stabilization Advisory Committee” will now be receiving public funding to provide not that many more residential units to house low-income homeless people at 140 Clarendon St. than already existed in the building 10 years ago.

Yet were it not for the fact that for-profit real estate deal-making firms and landlords like Mount Vernon have generally opposed restoration of rent regulation in Boston and generally been unwilling to construct many new residential units that were actually affordable to Boston’s low-income tenants since the 1990s, the number of displaced homeless people roaming the streets of Boston and other Massachusetts cities would not have increased so dramatically in the 21st-century.

But if you learn that your Boston landlord —in the absence of rent stabilization in Boston in 2022—will be increasing your market rent by 20 percent in 2022, at least you’ll still perhaps be able to put your name on the waiting list for an “affordable” apartment in the publicly funded--but privately-owned—140 Clarendon St. building--if you happen to be displaced and homeless when “redevelopment” of the building is completed in 2024?