Former Power Plant Property Eyed for Staging
By Christopher R. Vaccaro
Special to Banker & Tradesman

In his introduction to “The Scarlet Let­ter,” Nathaniel Haw­thorne wrote, “And yet, though invariably hap­piest elsewhere, there is within me a feeling for Old Salem, which, in lack of a better phrase, I must be content to call affection.”

Tourists and historians share Haw­thorne’s affection for Salem. Salem’s 400- year history has some blemishes, such as the 1692 witch trials. But it also has note­worthy successes, such as its involvement in global maritime trade during the 18th and 19th centuries and in manufacturing during the 20th century. Today, renewable energy firms eye Salem as a staging area for off­shore wind turbine projects.

Whether this Gateway City ultimately serves this role depends on Avangrid Inc. and its Commonwealth Wind project. Avan­grid is a foreign-owned utility company that delivers electricity and natural gas to mil­lions of ratepayers in New England and New York. Through its subsidiary Avangrid Renewables, it promises to generate clean energy using offshore wind turbines. With its Vineyard Wind project already under construction, Avangrid also plans to de­velop other offshore wind turbine projects known as Commonwealth Wind and Park City Wind on the continental shelf south of Martha’s Vineyard.

Developers Signed Purchase Agreements with Utilities

Commonwealth Wind is the largest off­shore wind project on the drawing board for New England. It is expected to gener­ate 1,200 megawatts of clean energy, enough for 700,000 Massachusetts homes. The project will reduce greenhouse gas emissions by 2.35 million tons per year, the equivalent of removing 460,000 gasoline-powered cars from the road. Park City Wind is expected to generate another 800 megawatts for ratepayers in Connecticut.

Avangrid entered into long-term power purchase agreements (PPAs) with several utility companies at set prices for Com­monwealth Wind.

Crowley Maritime, a specialist in port management and logistics, purchased the site last October for $30 million through a public-private partnership with the city of Salem. Avangrid will be its anchor tenant. The terminal will be used for turbine pre-assembly and component storage, trans­portation, and staging activities. Common­wealth Wind is expected to create thousands of jobs and attract millions of dollars of state investment to Salem. Ter­minal construction is scheduled to begin this year, with completion in 2025.

Utilities Dispute Terms of Agreements

Plans for Commonwealth Wind and the Salem Harbor Wind Terminal look promis­ing, but there is a catch. Avangrid recently sought to renegotiate the PPAs with the utility companies, to improve the return on its anticipated investment. When the utility companies balked, Avangrid filed a motion with DPU in December to stop DPU’s re­view of the PPAs and dismiss the utility companies’ petitions. Avangrid claimed that Commonwealth Wind cannot be fi­nanced or built under the current PPAs for several reasons, including the Ukraine war, inflation, higher interest rates, supply chain problems and other economic dis­ruptions.

The utility companies urged DPU to re­ject Avangrid’s attempt to stop DPU’s ap­proval process, arguing that if DPU were to dismiss their petitions at this late stage, offshore wind projects in Massachusetts would be undermined. The attorney gen­eral and Department of Energy Resources reaffirmed their support for the PPAs.

DPU approved the PPAs over Avangrid’s objections on Dec. 30. DPU found that Commonwealth Wind satisfied eligibility criteria for offshore wind energy genera­tion, the PPAs will facilitate project financ­ing, and the project will enhance the elec­trical grid’s reliability while stabilizing winter electricity pricing. It also found that the PPAs ensure that cost overruns will not be borne by ratepayers, the project can be completed in a reasonable time­frame, and the project will be properly paired with energy storage systems. DPU noted that Commonwealth Wind will miti­gate environmental impacts and produce economic benefits in a cost-effective man­ner that will further the public good. Given these benefits, it is unsurprising that DPU approved the PPAs.

Regardless of this approval from DPU, the future of Commonwealth Wind and the Salem Harbor Wind Terminal depends on whether Avangrid can secure financing and materials in a changing economic en­vironment. If Avangrid cannot do so, the goal of weaning Massachusetts ratepayers off fossil fuels over the next few decades will be at risk. That setback would be a challenge for Gov. Maura Healy’s nascent administration.

Download the article as seen in  Banker & Tradesman on October 31, 2022. Learn more about Christopher R. Vaccaro.

As Parcel 12 Rises, 1000 Boylston Descends into Legal Battle
By Christopher R. Vaccaro
Special to Banker & Tradesman

Boston is an attractive city with many desirable attributes, but it remains scarred by the 20th century public transportation project known as the Massachusetts Turnpike, an urban canyon that separates the Back Bay and South End.

Decades ago, turnpike air rights developments for the Hynes Convention Center, Prudential Center, John Hancock garage and Copley Place bridged some of this gap, but no similar projects have been completed since the 1980s. This is not surprising, given the engineering, permitting and financial challenges involved when constructing buildings over an eight-lane interstate highway and adjacent railroad tracks.

The city of Boston and the then-Massachusetts Turnpike Authority tried to facilitate air rights developments in 1997 with a memorandum of understanding that gave the city a role in approving those projects.  The city published “A Civic Vision for Turnpike Air Rights in Boston,” which offered project guidelines on 23 air rights parcels delineated by the Turnpike Authority, but the 2008 financial crisis and subsequent Great Recession stalled development.

In 2018, Weiner Ventures placed a major project on the drawing board involving parcel 15, an 11,000-square-foot air rights parcel near the Hynes Convention Center. The Weiner project would have combined parcel 15 with adjacent properties for a mixed-use project holding 108 condominium units, a 175-space parking garage and a 45,500 square-foot retail component. To satisfy Boston’s inclusionary development policy, the Weiner project would have created at least 51,000 square feet of affordable housing at locations to be negotiated with the Boston Planning & Development Agency.

Teaming Up with Suffolk Construction

Weiner formed a joint venture with an entity controlled by John Fish, the president of Suffolk Construction Co., to develop parcel 15. Suffolk was engaged as general contractor.  State and local government did their part to support the Weiner project. The BPDA successfully petitioned the Boston Zoning Commission to establish parcel 15 as a planned development area, and the state legislature passed a law specifically authorizing the Massachusetts Department of Transportation to double the maximum air rights lease term for parcel 15 from 99 years to 198 years.

By summer 2018, most of the permitting for the Weiner project was in place or forthcoming, leaving Weiner to negotiate financing.  Suffolk mobilized a construction team  to start site work. But the deal abruptly fell apart in 2019, after Weiner and Fish had already invested over $80 million in project costs. Weiner’s principal, Stephen Weiner, became uncomfortable with project risks.  He refused to sign a personal guaranty for the project, and was reluctant to pledge liquid collateral to secure a limited recourse guaranty.

In August 2019, Weiner announced that the parcel 15 project would not proceed.  Fish scrambled to find substitute investors for Weiner and structure a financial arrangement that would enable Weiner and him to recover their investments, but without success.  MassDOT terminated the development agreement for parcel 15 in October 2019.

Fish filed suit in Superior Court against Weiner for breach of contract, intentional misrepresentation, tortious interference and unfair and deceptive business practices.  Weiner answered with the expected denials, affirmative defenses and counterclaims.  Discovery by the parties is ongoing and is expected to be completed next year.  A once-promising collaboration between Weiner and Fish has degenerated into nasty litigation.

CarGurus HQ and Hotel Rise on Boylston Street

Meanwhile, a few hundred feet down Boylston Street to the west of parcel 15, there is good news to report. Samuels & Assoc. is making steady progress developing the 1.8-acre Mass Pike air rights plot known as parcel 12 with MassDOT.  Suffolk, which lost work when Weiner’s parcel 15 project was abandoned, is handling construction at parcel 12.

Samuels and Suffolk reached a significant milestone this year when they completed the decking over the Mass Pike. The decking will support a 657,000 square foot mixed-use project containing office, life science and retail space, together with a half acre public plaza. The office building will serve as corporate headquarters for CarGurus, and another building will accommodate a citizenM Hotel. Public benefits include improved access for pedestrians, cyclists and commuters. Samuels is also expected to make housing and jobs exaction payments to the city totaling over $5 million under a development impact project agreement with the BRA.

The parcel 12 project is an overdue step toward healing the urban wound caused by the Mass Pike. Contrast this with the abandoned parcel 15 project, which failed to heal the urban wound, and instead inflicted a wound on the relationship between two of Boston real estate’s biggest players.

Download the article as seen in  Banker & Tradesman on October 31, 2022. Learn more about Christopher R. Vaccaro.

Court Favors ADA “Tester” in Maine Inn Lawsuit
By Christopher R. Vaccaro
Special to Banker & Tradesman

Deborah Laufer is a severely disabled Florida resident.  She needs a wheelchair to get around, and has limited use of her hands and impaired vision.  Her disabilities require numerous accommodations, such as accessible parking, wheelchair ramps and widened passageways.

She is also a self-described Americans with Disability Act “tester” – an individual who seeks out businesses that are noncompliant with the ADA and its regulations, but does not intend to actually use the businesses’ services.

Under the ADA, “no individual shall be discriminated against on the basis of disability in the full and equal enjoyment … of
any place of public accommodation by any person who owns … or operates a place of public accommodation.”

Hotels are public accommodations subject to this law. ADA regulations require that hotel reservations systems describe accessible features in hotel facilities “in
enough detail to reasonably permit individuals with disabilities to assess independently whether a given hotel or guest room meets his or her accessibility needs.” These regulations are designed to help disabled individuals efficiently determine from hotel online reservation systems whether a hotel can accommodate them.

Surfing for Online Violations

Whether testers like Laufer have “standing” to file lawsuits is a threshold issue in discrimination cases. Courts developed the standing doctrine to ensure that plaintiffs
have concrete injuries, and that they are not merely concerned bystanders seeking to vindicate their value interests. In order to have such standing, plaintiffs must suffer actual injury, traceable to the defendants’ misconduct, which can be redressed by the courts.

Plaintiffs without standing cannot maintain lawsuits, and courts must dismiss their cases. In 1982, the United States Supreme Court ruled in Havens Realty Corp. v. Coleman that a Black tester had standing to sue a real estate company that refused to show her available housing. However, many federal courts have dismissed ADA lawsuits filed by serial testers, ruling that the testers lack standing.

Laufer surfs the internet looking for hotels nationwide whose online reservation systems lack information on accessibility.  When she finds them, she engages lawyers
to sue hotel operators in federal court for ADA violations, seeking declaratory judgments, injunctive relief and attorney’s fees. The ADA does not allow private parties to collect monetary damages, but it does require violators to pay their attorney’s fees, thus creating a lucrative industry for lawyers that work with testers like Laufer. With such lawyers’ assistance, Laufer has filed over 650 lawsuits involving non-compliant ORS.

Some federal courts have ruled that Laufer lacks standing to maintain her lawsuits.  But she persists, despite occasional setbacks.

Who Has Standing?

In 2020, she discovered that the online reservation system for the Coast Village Inn and Cottages of Wells, Maine lacked information on accessibility. She filed suit in the federal court in Maine, claiming that the inn’s online reservation system caused her “humiliation and frustration at being
treated like a second-class citizen.” The district court dismissed her suit, ruling that she lacked standing to sue the inn because, as an ADA tester, she did not suffer an actual injury, and no injury to her was imminent.

Last month, the U.S. Court of Appeals for the First Circuit, which hears federal appeals from Maine, Massachusetts, New Hampshire and Rhode Island, overruled the Maine federal district court. While acknowledging the division among federal appeals courts on Laufer’s standing to file suits as an ADA tester, the First Circuit appeals court ruled that Laufer had standing to sue the Maine inn.

The appeals court acknowledged Laufer’s claim that the inn’s online reservation system lacked accessibility information required by ADA regulations. This denial of information to Laufer, a disabled individual, was actionable under the ADA. Laufer’s status as a tester, with no intent to actually use the accessibility information, did not change this. The deficient reservation system
caused Laufer a concrete injury, because the lack of information put her “on an unequal footing to experience the world in the same way as those who do not have disabilities.” For these reasons, the First Circuit appeals court reversed the district court’s judgment, allowing Laufer’s lawsuit to proceed.

Because of the split among federal appeals courts on ADA testers’ standing, the U.S. Supreme Court may eventually decide this issue. For now, hotels and inns, especially those located in Maine, Massachusetts, New Hampshire and Rhode Island, should make sure their websites and reservations systems, including those operated by outside services, disclose the availability of accommodations for disabled individuals. They should also spread the word that testers like Laufer are out there looking to start lawsuits when they discover violations of ADA regulations.

Download the article as seen in Banker & Tradesman on October 31, 2022. Learn more about Christopher R. Vaccaro.

Previous Owner Began Construction Despite Zoning Violations
By Christopher R. Vaccaro
Special to Banker & Tradesman

A Falmouth builder recently learned the hard way that building permits and certificates of occupancy do not protect illegally built structures from timely forced re­moval orders.

Pheasant Lane in East Falmouth, a resi­dential neighborhood near Green Pond and Menauhant Beach, is part of a subdivision created in 1970. The subdivision consists of several lots, each with roughly 10,000 square feet of area, which was the minimum lot size under Falmouth’s zoning bylaw in 1970. Homes have been constructed on most of these lots, but 33 Pheasant Lane, with 11,540 square feet of area, remained undeveloped.

After 1970, the zoning bylaw was amended three times to increase the appli­ cable minimum lot size; first to 15,000 square feet in 1971, then to 20,000 square feet in 1984, and finally to 40,000 square feet in 1993. Before the 1984 increase, 33 Pheas­ ant Lane was part of a 7-acre parcel under common ownership. The property was sold as a separate lot in 1985, with less than the required 20,000 square feet of area.

Undersized Lot Fails Zoning Test

The Massachusetts Zoning Act provides “grandfathering” protection from increased minimum lot size requirements for house lots not held in common ownership with ad­ joining land, if they conform to then-existing requirements and have at least 5,000 square feet of area and 50 feet of frontage. Because 33 Pheasant Lane was owned in common with adjoining land when the minimum lot size increased in 1984, it is not grandfa­thered. In 1994, the Falmouth Zoning Board of Appeals (ZBA) issued two decisions pre­ venting construction on 33 Pheasant Lane.

None of this history deterred Pheasant Lane LLC, which contracted to buy the lot and applied for a building permit for a sin­gle-family home in November 2018. Its building permit application contained two misstatements; namely, that the lot was not an “undersized lot,” and that it had not been the subject of a prior ZBA decision. After the Falmouth building commissioner issued a building permit, Pheasant Lane LLC bought the undersized lot for $165,000 in January 2019.

When work began in early 2019, a neigh­bor, who was also a ZBA member, com­plained to the building commissioner. The building commissioner refused to act. Fal­mouth’s town counsel informed the builder about the zoning problem in March 2019, before the builder had done significant work, but the builder continued construc­tion. The neighbor appealed to the ZBA. While that appeal was pending, the building commissioner issued a certificate of occu­pancy for the completed home.

A Nonprofit Spies and Opportunity

In December 2019, the ZBA (with the neighbor recusing himself from the deci­sion) ordered the building commissioner to rescind the certificate of occupancy, and required the builder to return 33 Pheasant Lane to “its natural state” as it existed be­fore construction.  The building commissioner ordered the builder to remove the home from the property within 30 days. The builder appealed to the Land Court.

Falmouth Housing Trust, Inc., a nonprofit that promotes the development of affordable housing in Falmouth, saw an opportunity.

Falmouth is currently 417 units short of the required number of affordable dwelling units needed for Falmouth to use regulatory ex­ emption thresholds under the “anti-snob zon­ing” act in Massachusetts General Laws, Chapter 40B.

The Falmouth Housing Trust offered to buy the property from the builder if it could obtain a comprehensive permit from the ZBA allowing use of the property as an af­fordable single-family dwelling for a low- or moderate-income household.  The builder accepted this offer, hoping for a graceful exit from this debacle. The ZBA issued the comprehensive permit for the affordable dwelling unit in September.

Addie Drolette, the president of the Fal­mouth Housing Trust, summarizes the bene­ fits of this outcome.

“Considering the lack of workforce hous­ing in Falmouth, the Falmouth Housing Trust could not sit by and watch this beauti­ful home be demolished without attempting to save it. We are grateful to the town and its leadership for accepting our efforts to create another affordable home, and for the builder’s willingness to sell the property at a significant loss rather than continue with the litigation,” Drolette said.

The builder could have avoided this prob­lem to begin with, if before it bought the lot and built the house, it had done a thorough zoning analysis, and disclosed that the lot was undersized under local zoning in its building permit application. The Falmouth building commissioner also deserves some blame, for issuing a building permit on an 11,540 square-foot lot in a zoning district with a minimum lot size of 40,000 square feet.

Download the article as seen in Banker & Tradesman on October 31, 2022. Learn more about Christopher R. Vaccaro.