Appendix — LaFayette Place Associates v. City of Boston
Supreme Court brief1999
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Supremé Gort, 6.8.
(2 ee ee
98 8683 NOV 25199
No.
OFFICE OF THE CLERK
7
Iu the Supreme Court
of the United States
OCTOBER TERM, 1998
LAFAYETTE PLACE ASSOCIATES,
PETITIONER,
CITY OF BOSTON,
RESPONDENT.
On Petition For A Writ Of Certiorari
To The Supreme Judicial Court Of Massachusetts
APPENDIX TO
PETITION FOR A WRIT OF CERTIORARI
Stephen H. Oleskey
Counsel of Record
Hale and Dorr LLP
60 State Street
Boston, MA 02109
(617) 526-6000
Alan M. Dershowitz
Of Counsel
1575 Massachusetts Avenue
Cambridge, MA 02138-2801
(617) 495-4617
TABLE OF CONTENTS
Page
Appendix A (LPA's Petition for
ere copter, Yt. of Se eer ga eee ae 1
ppanEN BGs 6 CI so oe ics ee eas 22
Appendix C (Superior Court's Decision) ........ 61
Appendix D (Special Jury Verdict) ............ 68
Appendix E (Real Property Board Chairman's
ae Or ME ND 9b os ho ewe ees oO 73
Appendix F (Official Minutes of Real
on cc! hcg, SECRET RE eee Eee re 76
Appendix G (Letter from Mr. Campeau
OE Se SE i OK ao oe Ns Wee a ee 85
Appendix H (Letter from BRA Director
nthe See Ce eer ee re ee eee eer 93
Appendix I (Relative Portions of
es an hr aa en rn eae 97
Appendix J (Relevant Portions of
Amendments to Tripartite Agreement) ........ 122
APPENDIX A
HALE AND DORR up
Counssttoxns at taw
60 STATE STREET, BOSTON, MASSACHUSETTS 02109
617-526-6000 * FAX 617-526-5000
STEPHEN H. OLESKEY
617-526-6544
stephen.oleskey@haledorr.com
June 10, 1998
BY HAND
Honorable Herbert P. Wilkins
Chief Justice
Supreme Judicial Court
New Court House
Pemberton Square
Boston, MA 02108
Re: _—_ Lafayette Place Associates v. Boston
Redevelopment Authority and
City of Boston, No. SJC-07596
Dear Chief Justice Wilkins:
This letter is a petition for rehearing of the Court's
May 20, 1998 Decision in this matter as it affects the jury
verdict and judgment against the City of Boston. The
plaintiff, Lafayette Place Associates ("LPA"), respectfully
submits that rehearing should be granted because the
Court's decision, which departs from settled law on the
standard of review for jury verdicts and rests on
WASHINGTON, DC Boston, MA Lonpon, UK*
HALE AND DORR LLP INCLUDES PROFESSIONAL CORPORATIONS
*BROBECK HALE AND DORR INTERNATIONAL (AN INDEPENDENT JOINT VENTURE LAW FIRM)
June 10, 1998
Page 3
misapprehensions as to questions of both fact and law,
undermines long-settled principles respecting the sanctity
of jury verdicts in Massachusetts, and will adversely effect
the willingness of private citizens to do business with, and
repose trust in, their government.
5 The Court Failed To Afford Due
Deference to the Jury's Findings
In vacating the $9.6 million jury verdict against the
City of Boston, the Court failed to accord due respect to the
deliberations of a jury of twelve Suffolk County residents,
who rendered a verdict on nine special questions after
sitting through twelve days of evidence, hearing eleven
witnesses and reviewing 82 exhibits.’ As its 28-page
decision makes plain, the Court undertook its own
independent review and weighing of the evidence in a
manner inconsistent both with the deference it has long
properly insisted should be accorded to jury verdicts in this
Commonwealth, and with the fundamental axiom that the
evidence, on appeal, must be construed in the light most
favorable to the plaintiff.
The Court's disregard for the jury's verdict and
deliberations erodes the basic tenet, incorporated in the
Massachusetts Declaration of Rights, Article 15, that "[iJn all
’ The unanimous verdict (which, as rendered, totalled $16
million, including a $6.4 million award against the BRA) might be
thought the more convincing as the jurors must have understood it
would necessarily be paid by them and by their fellow taxpayers. After
lengthy briefing and argument on the City’s post trial motions, the jury's
verdict was thereafter sustained by the trial judge, the Chief Justice of
the Superior Court, who heard all the evidence and observed all the
witnesses.
June 10, 1998
Page 4
controversies concerning property and in all suits between
two or more persons, except in cases in which it has
heretofore been otherways used and practiced, the parties
have a right to a trial by jury; and this method of
procedure shall be held sacred, unless, in causes arising on
the high seas,-and such as shall relate to mariners’ wages,
the legislature shall hereafter find it necessary to alter it."
(emphasis added). Indeed, as this Court has previously
observed, "[t]he jury system, as the ‘sacred’ method for
resolving factual disputes, is the most important means by
which a layperson can participate in and understand the
legal system." Dalis v. Buyer Advert., Inc., 418 Mass. 220,
222 (1994). The jury system serves to bring “the rules of
law to the touchstone of common sense.’ . . . ‘Jurors bring
to a case their common sense and community values, their
very inexperience is an asset because it secures a fresh
perception of each trial, avoiding the stereotypes said to
infect the judicial eye.” Id. at 222 (citations omitted).
In light of the central importance of the jury process
to our system of civil justice, the standard for overturning a
jury verdict is a necessarily stringent one: "in this
Commonwealth . . . a verdict will not be directed for a
party unless the evidence when construed most favorably
to the opposite party would not warrant a contrary verdict,
or unless evidence by which such opposite party is bound
would make impossible a verdict in his favor." Salem Trust
Co. v. Deery, 289 Mass. 431, 433 (1935); see also Abraham v.
Woburn, 383 Mass. 724, 727 (1981)(in reviewing the denial
of a motion for judgment notwithstanding the verdict, the
standard is "whether ‘anywhere in the evidence, from
whatever source derived, any combination of circumstances
could be found from which a reasonable inference could be
drawn in favor of the plaintiff."")(citation omitted); Poirier v.
4
eee ge ee eT
June 10, 1998
Page 5
Plymouth, 374 Mass. 206, 212 (1978)(same). The Court's
decision does not even apply or mention this controlling
standard of review.”
Indeed, the Court's conclusions — that LPA failed
to make an adequate tender of payment to the City and
that LPA was not excused from making such a tender by
virtue of the City's bad faith actions and stated intentions
to abandon the Tripartite Agreement — are particularly
troubling given the well-established rule that factual issues
relative to the sufficiency of performance under a contract
and the materiality of a breach lie peculiarly within the
province of the factfinder. See Boothby v. Texton, Inc., 414
Mass. 468, 481 (1993)("The question of satisfactory
performance is a question of fact for the jury"); Charles
River Constr. Co., Inc. v. Kirksay, 20 Mass. App. Ct. 333, 340,
n.6 (1985)(question of whether breach was material “was a
question of fact for the jury, the answer to which must be
upheld if there is support for it in the record.")
? Notably absent from the Court's 28-page decision overturning
the $9.6 million jury verdict is any reference to the appropriate standard
of review. The Court's holding only highlights this omission. “The jury
returned a special verdict that affirmed that L.P.A. perform[ed] its
obligations under the contract. This verdict was incorrect as a matter of
law, given the fact that LPA fulfilled none of the obligations set out
above.” See Lafayette Place Assocs. v. Boston Redevelopment Authority, 427
Mass. 509, 527 n.23 (1998)(emphasis added). The hiyidighted language
of the footnote is telling: the standard of review applied plainly appears
to be the substitution of the Court's view of the facts for the jury's.
SL awit LAR ARR
June 10, 1998
Page 6
a. The Court Erred In Concluding That
LPA Did Not Fulfill Its Obligations
Under the Tripartite Agreement
LPA respectfully suggests that the Court
misapprehended both the law and the facts of the case in
concluding that LPA failed to fulfill its obligations under
the Tripartite Agreement by virtue of failing to make a
sufficient tender. When the record is viewed as a whole,
the jury had ample evidence upon which to conclude that
LPA stood ready, willing, and able to tender the amount
due for the Hayward Parcel and would have done so, had
the City and BRA not thwarted its efforts to acquire the
parcel.
1. The Evidentiary Requirements
For Adequate Tender Are Not
Reflected In The Decision
In its opinion, the Court states that "[t]o
place a seller in default, a buyer must manifest that he is
ready, able, and willing to perform by setting a time and
place for passing papers or making some other concrete offer of
performance." Lafayette, 427 Mass. at 520 (emphasis added).
Nowhere, however, do the decisions cited by the Court
specify the precise manner in which a buyer must
demonstrate that it is "ready, able, and willing" to perform,
or require that a time and place be designated for the
passing of papers. To the contrary, the cases merely
require evidence of ability and willingness to make tender
and manifestation of such willingness and ability "by some
offer of performance." See Leigh v. Rule, 331 Mass. 664, 668
(1954); LeBlanc v. Molloy, 335 Mass. 636, 638 (1957); and
Mayer v. Boston Metro. Airport, Inc., 355 Mass. 344, 350-352,
1
June 10, 1998
Page 7
354-55 (1969). Based on well-settled law, the specificity of
the tender and its sufficiency have been consistently
regarded by this Court as dependent upon the evidence as
a whole.’
il. The Evidence Was Sufficient For
The Jury To Conclude That LPA
Performed Its Obligations Under
the Agreement
Although LPA never claimed that it sent a
letter to the City specifying a precise time and place for
tender of payment, the jury hadbefore it more than
sufficient evidence that LPA was ready, willing, and able to
pay the option price for the Hayward Parcel.* In this
> The Court's Decision does not explain why, in light of its
own precedent, the specification of time and place should be such
critical elements of a tender in these circumstances. Details regarding a
specific time and place for tender would have added little of significance
to Mr. Campeau’s written offer to Mayor Flynn (A811) to "make
payment immediately” for the Hayward Parcel insofar as Mr. Campeau's
letter appears to be an open invitation for the City to unilaterally select
the time and place for tender.
* Another example of the Court's misapprehension of the facts
is reflected in its comment that “It was also unhelpful of Campeau to
send this ‘tender’ to Mayor Flynn . . ." Lafayette, 427 Mass. at 521, n.13.
The evidence was undisputed that the City owned the Hayward Parcel,
and dealt with LPA through the Real Property Board and Real Property
Department, both headed by Commissioner Roche, who reported to
Mayor Flynn. (Campeau was also dealing directly with the Mayor on
its huge “Boston Crossing” project). Only the City, as owner, not the
BRA, as the development entity, could convey the property. (A758-60).
This fact was the centerpiece of the BRA's defense to LPA's contract
claim against it for breach of the Tripartite Agreement.
PEIN NRO MAND Ole am SE ARS oN IES
Pah E a ih al
June 10, 1998
Page 8
regard, the jury heard evidence that LPA repeatedly asked
the City to complete the 1978 appraisals of parcel D4 and
New Essex Street, so that the purchase price could be
calculated. (A1108, 1126, 2770-2771, 2804-2807). In
addition, the jury heard Mr. Ransen, LPA's principal,
testify that he would have purchased the Hayward Parcel,
whether or not the design review process was completed.
(A3360-61). Finally, the jury heard evidence that Campeau,
which stepped into LPA's shoes in March, 1988, was ready,
willing, and able to purchase the Hayward Parcel in
December 1988. (A3748, 3752). On this basis, the jury had
more than sufficient evidence upon which to conclude that
LPA (and later Campeau) was ready, willing and able to
purchase the Hayward Parcel at the option price.
In a.'dition to the evidence heard by the jury, as the
Court's Decision recognized at 427 Mass. at 520, LPA
sought to introduce into evidence (over repeated objections
by the City and the BRA) a letter from Robert Campeau to
Mayor Flynn offering to make payment for the Hayward
Parcel "immediately." (A811). Such an unequivocal offer
to make payment could only have given the jury more
evidence upon which to conclude that Campeau was
ready, willing and able to perform under the contract.
b. The Evidence Was Sufficient for the Jury
to Conclude That Any Tender By LPA or
Campeau Would Have Been Futile Given
the City’s Clear Intention To Abandon
the Agreement
Although the Court acknowledges that LPA would
be excused from its obligation to tender if "the city’s tactics
and delays demonstrated that it would not perform under
June 10, 1998
Page 9
the contract,” Lafayette, 427 Mass. at 522, the Court fails to
apply the proper standard of review when examining the
evidence on that issue, and thereby reaches an erroneous
result.
Indeed, the Court, acting as if it were the proper
factfinder, actually sifts through the evidence, resolving
conflicts in favor of the City, rather than LPA, as required
under the appropriate standard of review. For example,
the Court interprets the testimony of Marco Ottieri — that
LPA would have purchased the Hayward Parcel even if
unfavorable zoning was imposed — as seriously
weakening the inference that the City's zoning activities
with regard to the Hayward Parcel evidenced the City's
unwillingness to perform under the Agreement. Lafayette,
427 Mass. at 523. Such an inference was not proper since a
reasonable factfinder might very well have concluded that
evidence of LPA's hypothetical response to the City's
zoning activities was irrelevant to a determination whether
such activities manifested the City's unwillingness to
perform its obligations under the Tripartite Agreement.
Alternatively, a reasonable factfinder could have concluded
that even though LPA would have proceeded to exercise
its option if it believed it could proceed profitably, the
City's actions with regard to zoning and otherwise
materially affected the transaction. In drawing this
inference adverse to LPA, therefore, the Court violated its
own rule that "as long as the jury's verdict is supported by
reasonable inferences, we will not substitute our
interpretation of the facts for theirs." Abraham, 383 Mass. at
730.
The Court also ignores or simply fails to draw the
permissible inference the jury was entitled to draw in favor
June 10, 1998
Page 10
of LPA from other evidence which demonstrated the City's
repeated efforts to block the acquisition, including: (1) the
City's failure to obtain the appraisals of Parcel D-4 and
New Essex Street despite repeated requests from LPA’
(A1108, 1126, 2770-2771, 2804-2807); (2) the City's active
pursuit of plans (continuing through the end of the option
period) to build a road through the middle of the Hayward
Parcel (A2504-2510, 4457-4459, 4461); and (3) the City's
* The Court's conclusion that the City’s failure to obtain
appraisals for D-4 and New Essex Street was immaterial, 427 Mass. at
522, n.15, also directly contravenes the principle that determination of
whether a breach is material is a “question for the jury.” Hastings Assocs.
Inc. v. Local 369 Bldg. Fund, Inc., 42 Mass. App. Ct. 162, 171 (1997). See
also Charles River Constr. Co., 20 Mass. App. Ct. at 340 n6.
x; 3
June 10, 1998
Page 11
obstruction of the design review process for Phase II.°
(A3167-9, 3357, 1112, 3167).
In addition, the Court, in analyzing the factual issue
of whether a tender would have been futile, ignores or
downplays evidence that the City wished and intended to
"abandon" the Tripartite Agreement because it was too
favorable to LPA. Such evidence included: (1) statements
by BRA Director Coyle that the City wanted a higher value
for the Hayward Parcel (A2678, 3185, 3168-69); (2) meeting
minutes of the Real Property Board in which the Board
"expressed its desire . . . to receive the fair market value for
* There was substantial evidence that LPA intended from 1978
on to build Phase [I and that it believed the success of the mall on Phase
I was inextricably related to LPA’s ability to construct a department
store on the Hayward Parcel. (A2660, 3190, 3387). Moreover, the
Second Amendment of February 26, 1982, expressly recognized that the
City had already demolished the parking garage (A1080); LPA's ability to
develop Phase II, was therefore, not “contingent upon the City’s decision
to remove the parking structure” on the Hayward Parcel after that date.
(Cf. Lafayette, 427 Mass. at 510-11). As a consequence of this
misapprehension of facts before the jury, the Court's decision fails to
acknowledge the critical fact that completion of Phase II was essential to
the success of Phase I, and that it was vital for LPA to acquire the
Hayward Parcel to build the second department store needed to make
Phase I profitable. (Jordan's was already physically connected to Phase |
to the east). While the Court was influenced in its analysis by the
failure of Phase I, id. at 410, n.2, the jury heard and must have accepted
testimony that the failure of Phase | was caused directly by Campeau's
actions in deliberately emptying the mall of all tenants preliminary to its
planned “Boston Crossing” redevelopment (A3379, 3381-82). The
resulting bank foreclosure left LPA with no mall asset and therefore
with no reason to seek an “arbitration remedy” for its inability to acquire
the Hayward Parcel; without Phase I, it had no reason to acquire Phase
II. As the jury understood and accepted, LPA's only recourse thereafter
was to pursue first Campeau and then the City for money damages.
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June 10, 1998
Page 12
the Hayward Parcel (abandoning the Tripartite
Agreement)") (A1875); (3) a memo from Chairman Roche of
the Real Property Board to Mayor Flynn complaining about
the "monetary windfall" that would accrue to LPA if “the
BRA and the City allow the sale or transfer to occur’
(A2503); and (4) the City's refusal to complete the 1979
appraisals, a necessary predicate to determining the
purchase price.’ Based on such evidence, the jury certainly
could have concluded that any tender of payment by LPA
would have been futile. See Hastings Assocs., 42 Mass. App.
Ct. at 171 ("Once the defendant indicated to the plaintiff
that the defendant would not fulfill its obligations, the
defendant was in default and the plaintiff was not obliged
to go through the ‘empty ceremony’ of selecting a third
party to determine the formula for valuing the
business")(citation omitted).
In light of the controlling standard of review —
"whether ‘anywhere in the evidence, from whatever source
derived, any combination of circumstances could be found
from which a reasonable inference could be drawn in favor
of the plaintiff" — the Court erred in making its own
” Ina further example of the Court reviewing and assessing
evidence heard and weighed by the jury, the Court notes that "The City
argues . .. that the appraisals for [D-1 to D-3] sufficed to determine the
value of D-4, . . . a very small part of the overall parcel.” Lafayette, 427
Mass. at 522, n. 15. But the jury surely had the right to weigh this
refusal to act, in context, as additional evidence of the City’s decision
that it would not abide by the contract to sell the land. This is not a
trivial evidentiary point, since this appraisal and that of New Essex
Street, was unequivocally the City’s obligation. (A959). While the City
took steps to begin these appraisals, it then stopped suddenly; at trial it
offered no explanation for its behavior, a fact which the jury could have
viewed as consistent with the City’s other actions. (Cf. id. at 521-22).
33.
June 10, 1998
Page 13
finding that the jury could not have concluded that "the
City's tactics and delays demonstrated that it would not
perform under the contract."* Lafayette, 427 Mass. at 522.
2. The Court's Decision Violates the Due
Process Clause of the Fourteenth
Amendment of the United States
Constitution
In reaching its result, the Court overlooked settled
law concerning the appropriate standard of review to be
applied upon review of a denial of judgment
notwithstanding a jury verdict. More specifically, the
Court conducted its own review of the evidence, drew
inferences against, rather than in favor of LPA, discounted
or disregarded entirely certain evidence favorable to LPA,
and then applied the law to the facts it had improperly
determined. In so doing, the Court utterly failed to give
the deference to the jury's verdict that is required under
the long-standing law of the Commonwealth and the
United States and thereby effectively deprived LPA of its
right to a jury trial. Indeed, the Court, by virtue of its
* As a procedural matter, the jury did not even address the
issue whether LPA’s failure to perform its obligations under the contract
was due to “the city's tactics and delays.” In fact, the special verdict
form instructed the jury not to consider the question unless it concluded
that LPA had not performed its obligations under the Agreement. (See
A710). Since the jury concluded that LPA had fulfilled its obligations
under the Agreement, it properly did not address the issue whether LPA
was excused from performance. At the very least, LPA is entitled to
have a jury pass on the issue whether LPA’s alleged failure to make a
sufficiently definite tender was the result of the City’s actions. This
Court, which has not heard the evidence or observed the witnesses,
should not determine such a fact-intensive issue.
AS Te WEP Se TIRE
June 10, 1998
Page 14
decision, took LPA's property interest in the Hayward
Parcel as set forth in Section 6.02 of the Tripartite
Agreement, and gave it to the City of Boston. Such
arbitrary and capricious conduct constitutes a violation of
LPA's Fourteenth Amendment right to due process.
a In Reaching Its Decision, the Court
Relied on Legal Issues That Had Not
Been Raised With Sufficient Particularity
Either at Trial or On Appeal
The Court's opinion relies on many issues that had
not been briefed or raised by the parties in any meaningful
way, either in the trial court or in the appellate briefs. The
Court's own analysis of such issues contravenes the general
principle that issues not raised are waived, Still v. Comm’r
of Employment and Training, 423 Mass. 805, 808 n.3 (1996),
and that issues not briefed on appeal with sufficient
adequacy shall not be addressed. Shafnacker v. Raymond
James & Assoc., Inc., 425 Mass. 724, 735 n.14 (1997).
a. The City Did Not Raise in a Timely
Fashion the Issue of LPA’s Failure to
Invoke the Arbitration Clause
Although the Court faults LPA for failing to avail
itself of the arbitration procedure contained in the
Tripartite Agreement, a review of the record demonstrates
that the City did not assert the arbitration procedure as a
defense in a timely fashion as required by Mass.R-Civ.P.
8(c), and therefore cannot be allowed to rely on the
arbitration clause to avoid its obligations. The City did not
raise LPA's failure to arbitrate as an affirmative defense in
its Answer (A39), its Summary Judgment motions (A55,
mill
-15-
June 10, 1998
Page 15
498), its Statement of Outstanding Issues (A491), or its Trial
Memorandum (A575). Indeed, the first reference by the
City to arbitration came at the end of all the evidence at
the trial, after more than two years of litigation, including
substantial discovery.” Moreover, the law is settled that by
proceeding through discovery and trial, the City waived its
right to resort to arbitration. See Home Gas Corp. of Mass.,
Inc. v. Walter's of Hadley, Inc., 403 Mass. 772, 778
(1989)(right to arbitration waived after one year of
discovery, fourteen-day hearing and report by master).
* The City filed no motion for a Directed Verdict at the close of
LPA’s case. The City’s first claim that arbitration was LPA’s only
remedy came in its Requested Jury Instructions (A698); when they were
not given, the City failed to preserve its nghts by not objecting.
Re |
ila ea 4
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June 10, 1998
Page 16
b. The City Never Challenged the Trial
Court's Instructions to the Jury On
LPA’‘s Performance Under the Tripartite
Agreement
Although the Court holds that LPA’s failure to
invoke the procedural remedies in the Tripartite Agreement
precludes it "as a matter of law" from putting the City in
default, the record indicates that the jury was not so
instructed and that the City voiced no objection to the trial
court's instruction as to LPA's obligations under the
Tripartite Agreement:
Question 2: Did LPA perform its obligations under
the contract? Did LPA do what it was supposed to
do? Did it do what it was supposed to do pursuant
to the terms and conditions of the contract? One
cannot seek to enforce a contract unless one lives up
to and meets its obligations under the contract.
(A4688).
. The City Never Challenged the Trial
Court's Instructions on the Issue Of
Whether LPA Was Excused from
Performing By Virtue of the City’s
Conduct
Similarly, although the Court analyzes the issue
whether the evidence could have supported a finding that
LPA was excused from tendering payment by virtue of the
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June 10, 1998
Page 17
City's conduct, the record demonstrates that the City failed
to object to the following instructions given by the Court:
The question is: If LPA did not perform its
obligations . . . under the contract, was its failure to
perform caused solely — by that it means was the
only cause, the only cause for its failure to perform
-— was its exclusive cause for its failure to perform
a material breach by the City of Boston. In other
words, did the failure of the City of Boston to meet
its obligations under the contract, was that the
cause ... of LPA not meeting its obligations under
the contract.
(A4688-89). Nor did the City request any further
instructions on LPA's obligations under the Tripartite
Agreement. Under such circumstances, the City should not
even be allowed to raise this issue on appeal and this
Court certainly should not rely on the issue as dispositive
of a multi-million dollar jury verdict which followed
instructions as to which no objection was made.
4. The Court's Decision, Which Holds
Private Parties to a Heightened Standard
of Care When Transacting Business With
Governmental Entities, Is Not Supported
by Settled Precedent and is Unsound and
Unfair Judicial Policy
The Court's decision rests in significant measure on
the principle that commercial transactions involving
municipalities require different standards from those
between private parties. More specifically, in reaching the
conclusion that LPA failed to make an adequate tender of
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June 10, 1998
Page 18
payment for the option parcel, the Court relies upon dicta
in a 1920 United States Supreme Court decision involving
Internal Revenue Service procedure, which states that,
“Men must turn square corners when they deal with the
Government.” See Lafayette, 427 Mass. at 524 (quoting Rock
Island, Ark. & La. R.R. v. United States, 254 U.S. 141, 143
(1920)). Moreover, the Court places special emphasis on
citizens being "particularly assiduous" in using available
"procedural devices” in transactions involving government
“particularly .. . in a complex and heavily regulated
transaction . . . where public entities and public and elected
officials with changing policies and constituencies are
involved, and the transaction spans many years.” Lafayette,
427 Mass. at 523-24. Finally, in the portion of the opinion
rejecting LPA's 93A claims against the City and BRA, the
Court stated even more starkly: “It is perfectly possible for
a governmental entity to engage in dishonest or
unscrupulous behavior as it pursues its legislatively
mandated ends." The Court has apparently overlooked its
decision in Commonwealth v. Boston Redevelopment Authority,
418 Mass. 29, 32, n.3 (1994), in which it summarily rejected
the BRA's transparent effort to advance its "legislatively
mandated ends" through actions intended to force the
Commonwealth itself to renegotiate the purchase price for
the land for the new courthouse. Cf. Lafayette, 427 Mass. at
535-36.
These principles are contrary to well-settled and
well-reasoned precedent in the Commonwealth that, in
contract actions, the state “will be held answerable ‘exactly
as though it were a private individual.” Minton Const.
Corp. v. Commonwealth, 397 Mass. 879, 880 (1986); Babcock
Coal Co. v. Boston, 303 Mass. 518, 521 (1939)(finding general
commercial contract rules apply "to municipalities equally
-19-
June 10, 1998
Page 19
with other buyers"); Space Master Intern., Inc. v. City of
Worcester, 940 F.2d 16, 19 (1st Cir. 1991)("Massachusetts
applies general principles of contract law to public
contracts"); see also Bromfield v. Treasurer & Receiver General,
390 Mass. 665, 669 (1983)("The presumption exists that the
Commonwealth will honor its obligations.")
Indeed, the City did not even dare to argue below
that it should be treated other than as a private citizen in
this context, and in fact requested the following instruction
be given to the jury at trial:
For the purpose of your deliberations, it makes no
difference, and you should not consider, that the
City of Boston ... is . . . a large municipal entity.
The City is entitled to rely on its legal rights to the
same extent as any individual person. Just as an
individual's means are irrelevant to your
determination of his or her legal rights and
obligations, so are those of the City . . .. All persons,
including the City of Boston . . ., stand equal before the
law and are to be dealt with as equals in a court of
justice.
(A659)(emphasis added).
That elected officials, their "constituencies" and
"policies" change over time ought in truth to be all the
more reason for citizens to be able to enforce contracts
made by one administration on behalf of a city against that
city later, no matter what changes elections have wrought.
Here, one Mayor, Kevin White, his BRA Director, Robert
Kenney and his Real Property Commissioner, Joanne
Prevost, in a contract approved by the City Council,
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June 10, 1998
Page 20
squarely committed the City and its agencies in 1978 to sell
property to LPA at a much later date so long as LPA built
Phase | and became entitled to trigger its Phase II option —
the carrot dangled by the City in its successful effort to
induce LPA to invest well over $100 million in a highly
risky ten-year commitment in a vital but decrepit portion
of the City's Central Business District. Ten years later, with
a new Mayor, Raymond Flynn, a new BRA Director,
Stephen Coyle, and a new Real Property Commissioner,
Edward Roche, "constituencies" and city "policies" had
most assuredly changed. In such foreseeable and repetitive
circumstances, requiring government, like private citizens,
to live strictly with its contractual commitments, particular
with those agreements successor officials perceive and
publicly proclaim to be no longer advantageous enough to
perform, should be a judicial imperative.
The import of the Court's decision — that
government in the pursuit of its objectives will be given a
latitude to conduct itself in a manner that would be
unacceptable and sanctionable in a private citizen (cf.
Anthony's Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 475
(1991), cited by the Court in Lafayette at 535) — is not only
contrary to all citizens’ reasonable expectations that
government will (as it should) behave decently and
honestly in its dealings with them, but is also a highly
disturbing principle and precedent for this Court to
advance.
a
91.
June 10, 1998
Page 21
For all of the above-stated reasons, LPA respectfully
requests that the Court grant its petition for rehearing.
LPA requests oral argument on its petition.
Very truly yours,
Stephen H. Oleskey
Lisa J. Pirozzolo
cc: David Wanger, Esq.
Rory Fitzpatrick, Esq.
Saul A. Schapiro, Esq.
APPENDIX B
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
LAFAYETTE PLACE ASSOCIATES vs. BOSTON REDEVELOPMENT
AUTHORITY & another.'®
Suffolk, March 9, 1998. — May 20, 1998
Present: WILKINS, C.J., ABRAMS, LYNCH, GREANEY, FRIED, MARSHALL, &
IRELAND, JJ.
Contract, What constitutes, Construction of contract.
Performance and breach. Boston. Redevelopment Authority.
Municipal Corporations, Contracts. Governmental Immunity.
Massachusetts Tort Claims Act. Consumer Protection Act,
Unfair or deceptive act, Trade or commerce.
The terms of an agreement, as amended, between the city of
Boston, the Boston Redevelopment Authority, and a
developer were sufficiently definite to constitute a valid
and enforceable contract [517-519], however, where a
bilateral contract for the purchase and sale of a certain
parcel of real estate arose upon the developer's exercise of
an option under the agreement and where, thereafter,
neither the developer nor the city tendered performance,
neither party was in breach or default of the agreement,
which then expired by its own terms [519-527]
In a civil action, the judge did not abuse his discretion in
ruling that the Boston Redevelopment Authority had
timely raised the defense of immunity under the
Massachusetts Tort Claims Act, G.L. c. 258 § 10(c).
[527-528]
® City of Boston.
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427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
This court concluded that the Boston Redevelopment
Authority is a public employer under the Massachusetts
Tort Claims Act, and, as such, the provisions of G.L.
c. 258, § 10(c), confer upon it immunity from liability for
intentional torts. [528-535]
In a G.L. c. 93A claim brought by a developer against the city
of Boston and the Boston Redevelopment Authority, the
judge correctly allowed the defendants’ motion for
summary judgment where the defendants’ transactions
with the plaintiff were wholly in pursuit of the
legislatively prescribed redevelopment mandate of G.L.
c. 121A, § 2, and did not constitute "trade or commerce.”
[535-536]
CIVIL ACTION commenced in the Superior Court
Department on March 16, 1992.
A motion for summary judgment was heard by Hiller B.
Zobel, J., and the case was tried before Robert A. Mulligan, J.
The Supreme Judicial Court granted an application for
direct appellate review.
Stephen H. Oleskey (Lisa J]. Pirozzolo with him) for the
plaintiff.
Saul A. Schapiro (Nina F: Lempert with him) for Boston
Redevelopment Authority.
Rory FitzPatrick (Irene C. Freidel & Merita Hopkins with
him) for the city of Boston.
FRIED, J. A jury found the defendants, the city of Boston
(city) and the Boston Redevelopment Authority (BRA), liable
for monetary damages for having breached a contract with
the plaintiff, Lafayette Place Associates (LPA), for the sale of
certain land (Hayward Parcel), and the BRA liable for the tort
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
of intentional interference with LPA's contractual relation
with another entity, Campeau Massachusetts, Inc. (Campeau).
The trial judge entered judgment against the city, and
granted judgment notwithstanding the verdict in favor of the
BRA, on the ground that it was not amenable to suit for an
intentional tort. We conclude that there was a valid contract
between the city and LPA but that the city did not breach it.
We also affirm the judgment entered in favor of the BRA, and
the dismissal of LPA's claims under G.L. c. 93A.
This dispute arises out of efforts going back to the
administration of Boston Mayor Kevin White in the late
1970's to rehabilitate the "Combat Zone," a dilapidated area
adjacent to a shopping area on Washington Street. A grand
scheme was devised by LPA's entrepreneurs for the
construction of a department store, a retail mall, and a hotel
in the area. In 1978, an agreement (Tripartite Agreement) was
signed between LPA, the city, and the BRA for the
development of the area in two phases. Phase | was to
encompass a shopping mall and a hotel and was eventually
built." It is not a subject of these suits. Phase II was to
include one or more office buildings, further retail space, and
a department store. It was to be built on four parcels of land
to be assembled into a single parcel, called the Hayward
Parcel, at the time partially occupied by a city parking
structure, the Hayward Place parking garage. Whether Phase
If would ever be undertaken was made contingent in the
" The shopping mall, Lafayette Place Mall, was not a success.
The bank that held the mortgage foreclosed on it on February 5, 1991.
The hotel, originally known as the Lafayette Hotel, has been operating
successfully as the Swiss6tel and separated itself from the development.
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427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
Tripartite Agreement on the city's decision to remove the
parking structure. If it did, the city would still be allowed to
build an underground parking garage on the site with LPA
being granted air rights to build over it.
The agreement as to the development of the Hayward
Parcel was principally set out in Section 6.02 of the Tripartite
Agreement. Section 6.02 is expressed in terms of the grant of
an option to LPA to purchase the Hayward Parcel. The
option is contingent on notice by the city that it plans to
discontinue the Hayward Place garage. By agreement, LPA
could thereupon notify the city within the option period if it
“desires to purchase the rights hereby made available to it
[and] the City shall seil the same . . ." The Tripartite
Agreement and accompanying maps identify the boundaries
of the Hayward Parcel, but indicate several alternatives
concerning the rights to be conveyed. In the Tripartite
Agreement, the city is stated to have in hand appraisals of
the fair market value of two of the four component parcels of
the Hayward Parcel, and agrees "forthwith" to obtain
appraisals of the two remaining parcels.” The price to be paid
was to be one-half of the appraised fair market value as of
1978, plus one-half of the increase in value attributable to "the
construction of the Public Improvements and the Project."” In
other words, the formula accounted for the possibility that
between 1978 and the future sale of the Hayward Parcel, the
value of the parcel could change as a result of the
% The city completed an appraisal of the third parcel in 1979.
% This was the formula to be used if the city ultimately
determined, as it in fact did, that it would retain subsurface rights to
build a parking garage under the Hayward Parcel. Had the city decided
not to retain subsurface rights, an alternate formula provided that the
purchase price would be the full fair market value as of 1978 plus
one-half of any increase in value attributable to the construction of “the
Public improvements and the Project.”
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
construction of Phase I on adjacent land. The Tripartite
Agreement further provided that "[t]he existence and amount
of increase in fair market values attributable to the
construction of the Public Improvements and the Project shall
be determined by independent appraisal." Section 13.01 of the
Tripartite Agreement also provides, after giving a standard
definition of fair market value, that such value shall be
determined by a procedure, akin to arbitration, by which by
giving written notice either party may designate a first
appraiser, the other party designate a second appraiser, and
a third appraiser be appointed by the first and second, by the
Chief Judge of the United States District Court for the District
of Massachusetts, or by the president of the Boston Bar
Association."
The Tripartite Agreement also provides,
"[t]he Developer may exercise the right and option set
forth in this Section 6.02 by giving notice of its desire
to purchase such rights to the City at any time within
the Option Period. After the receipt of and following
such notice from the Developer, the parties shall in
good faith negotiate and enter into an agreement
calling for the purchase and sale of the rights in
question. Such agreement shall be in the customary
form of agreements for the purchase and sale of real
estate in the greater Boston area except that the
agreement shall reflect such reservation and shall
contain other appropriate provisions with respect to
“ This appraisal process was to be used to determine the fair
market value of the "project rights,” which included the “Developer's
present and future rights in and to the Project Area.” The “project area”
included parcels D-1, D-2, D-3, and DA, which made up the Hayward
Parcel.
OSE TERED Pe tee cee nO ee ne eae a RON
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
the integration of construction and other matters
relevant to coordinated use of the rights conveyed
and the rights retained by the City.”
On February 26, 1982, the parties agreed, in what is known
as the Second Supplemental Agreement, to certain changes to
the Tripartite Agreement concerning the construction and
operation of a parking garage by the city under the Hayward
Parcel. In addition, the parties amended Section 6.02 by
adding the following:
"[I]f the Developer shall exercise the right and option
set forth in this Section 6.02, there shall automatically be
created an agreement by the Developer to buy and by the
City to sell the .. . Parcels . . . . [A]ppropriate details of
the purchase and sale shall be worked out by the parties
so as to conform to their intent under this Section 6.02.,
but if they shall be unable to do so then the matter shall
be resolved by arbitration in accordance with the
arbitration procedure set forth in ARTICLE EIGHT of the
Deed and Agreement, dated as of September 11, 1979,
between the City and the Developer."
Article 8 of the deed sets out a binding arbitration procedure
for the resolution of disputes.'° On December 16, 1983, the
city gave notice to LPA that it intended to discontinue the
Hayward Place Garage and build a parking garage beneath
'® The September 11, 1979 deed, which was for the purchase of
the “Lafayette Parcel” in connection with Phase 1, provides that "[iJ}f a
dispute shall arise . . . and if . . . such dispute is to be settled by
arbitration, then either Owner may serve upon the other Owner a notice
demanding that the dispute be arbitrated . . . ." Each party is permitted
to select an arbitrator, and the two chosen arbitrators then select a third.
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
the Hayward Parcel, thereby commencing |PA's option
period. In that notice, the city listed five contingencies to
closing the sale of the Hayward Parcel, including that "the
parties are able to agree, via appraisals, on the increased
value of parcels D-1, D-2 and D-3, as the result of the
construction of the Lafayette Place Project."
On July 2, 1986, as all parties agree, LPA exercised its
option to purchase the Hayward Parcel. On October 27, 1987,
the parties extended the date on which closing might take
place by providing, in what is known as the Third
Supplemental Agreement, that:
"Section 6.02 of the Tripartite Agreement is amended
by deleting the proviso in the fourth full paragraph
thereof . . . and substituting in its place the following:
‘provided that, unless the City and the Developer shall
agree to a further extension, the Developer shall lose its
rights hereunder to proceed with an acquisition if a
closing has not occurred by January 1, 1989, unless the
City and/or the Authority shall fail to work in good faith
with the Developer through the design review process to
conclude a closing.’ "
By virtue of the Third Supplemental Agreement, LPA had
until January 1, 1989, a date which all parties refer to as the
"drop dead date,” to "proceed with an acquisition."
LPA never demanded and the city never tendered a deed
within the required time period or at any other time. The
basis of its contract action against the city is that the city in
bad faith failed to carry out those of its obligations under the
Tripartite Agreement necessary to allow LPA to proceed to
demand a closing, and indeed that it engaged in bad faith
actions designed to impede LPA in effecting a timely closing.
The reason for these obstructionist tactics by the city, as LPA
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
sought to show by testimony and documents, was that the
new administration of Mayor Raymond Flynn believed that
the price established by the Section 6.02 formula, which was
based on 1978 values, was grossly unfair to the city in the
light of a strong surge in real estate prices in the intervening
years. LPA offered evidence of several instances of what it
claimed were the city's obstructionist tactics. These included
failing to complete the appraisals necessary to establish the
price for the Hayward Parcel, initiating zoning changes that
would have greatly reduced the allowable height of the office
towers planned for the site, lack of cooperation about
determining whether Avenue de Lafayette and New Essex
Street would be closed, and threatening to put a new street
through the middle of the parcel, which would have made its
development economically unviable.
In November, 1987, after the conclusion of the Third
Supplemental Agreement but before the final breakdown of
dealings in 1989, LPA negotiated the sale of its development
rights in the Hayward Parcel to Campeau. LPA was to
receive $24.5 million in return for its rights under Phase I of
the project. The sale was subject to approval by the BRA, and
on December 4, 1987, LPA filed an application for approval.
On February 1, 1988, LPA withdrew its application; the BRA
had not acted on it in the interim. In March, 1988, LPA
entered into a lease agreement with Campeau whereby
Campeau assumed LPA's debts under Phase I and was to
pay LPA approximately $21.5 million in cash and notes in
return for LPA's rights to the project. Under the lease
agreement, Campeau agreed to pay LPA additional
consideration if the BRA approved the sale of the Hayward
Parcel.
Thereafter, LPA was not directly involved in negotiations
regarding the sale of the Hayward Parcel. Campeau began
elaborate plans for a development called “Boston Crossing,”
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427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
which included construction of a department store and office
tower on the Hayward Parcel, the rebuilding of the Phase |
mall on its nearby parcel, and the construction of an office
tower above a rebuilt Jordan Marsh. During 1988,
representatives from Campeau and the BRA met repeatedly
to negotiate about Campeau' s plans. When it became clear
that Campeau could not secure BRA approval for the Boston
Crossing project by the expiration of LPA's option period,
Campeau requested a further extension of the drop dead
date. The BRA refused to extend the January 1, 1989,
deadline. On December 19, 1988, Campeau's president sent a
letter to Mayor Flynn describing the current state of the
project, renewing Campeau's request for an extension of the
option period, and informing Mayor Flynn that "we have no
recourse but to officially notify the city that we wish to
complete the transaction and make payment immediately.”
On December 30, 1988, Stephen Coyle, director of the BRA,
responded. He stated that, “once the development review
process is complete, the City's parcel can be sold for its fair
reuse value," and noted that “[b]y their own terms, prior
agreements on Hayward Place will expire on January 1, 1989.
This event does not in our judgment alter our willingness to
work with you . . . [iJt simply puts the question of the
disposition of Hayward Place in a current context.”
LPA's option period expired on January 1, 1989. In June,
1989, the BRA approved Campeau's "Boston Crossing” design,
but by June, 1990, Campeau had defaulted on its payments
to LPA under the lease agreement and LPA terminated its
lease with Campeau. Manufacturers Hanover Trust
Company, as lender, foreclosed on LPA's and Campeau's
interests in the Lafayette Place Mall in February, 1991, and
the project collapsed. On March 16, 1992, LPA filed suit
39.
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
against the city and the BRA."* LPA alleged that the city had
breached the Tripartite Agreement by failing to work out the
necessary details to effect the transfer of the Hayward Parcel
after LPA exercised its option to buy, and LPA sought
specific performance, or, alternatively, damages for breach of
the Tripartite Agreement. LPA also sought damages for
breach of the implied covenant of good faith and fair dealing,
interference with contractual relations, and violation of G. L.
c. 93A.
On October 21, 1994, a jury returned a verdict against the
city and the BRA. The jury found that there was a contract
for the purchase of the Hayward Parcel, that both the city
and the BRA breached the contract, but that the BRA was not
acting as an agent of the city in connection with the contract.
The jury awarded LPA $9.6 million against the city. The jury
also found that the BRA intentionally interfered with
contractual relations between LPA and Caapeau, and
awarded LPA $6.4 million in damages. The trial judge then
ruled that the $6.4 million verdict against the BRA was
"encompassed" within the $9.6 million award against the city.
On August 17, 1995, the judge granted the BRA’'s motion for
*° On July 18, 1990, LPA had filed suit against Campeau,
alleging that Campeau had failed to use “commercially reasonable
efforts” to go forward with Phase 11, and therefore had violated the
lease agreement between LPA and Campeau. in addition, LPA alleged
that Campeau had failed to pay amounts due under the lease. The
record does not reflect the disposition of this action.
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
judgment notwithstanding the verdict,” ruling that the BRA
is a public employer under the Massachusetts Tort Claims
Act and is therefore immune from suit for intentional torts.
We granted LPA's application for direct appellate review.
II
The city makes two principal arguments in this appeal:
that the Tripartite Agreement was too indefinite to constitute
a binding contract, and that in any event the city was not in
breach. Although the city treats these as quite distinct
arguments we believe that they must be considered together
to come to a fair and sensible view of the arrangement
between the parties and their dealings with each other
pursuant to it. There were certainly contingencies left open at
the time that the parties concluded the Tripartite Agreement,
principally the price to be paid, the treatment of Avenue de
Lafayette and New Essex Street, and whether or not the city
would choose to build an underground garage on the
Hayward Parcel. But these open matters did not preclude the
formation of a binding agreement. The parties specified
formulae and procedures that would determine a price under
the several contingencies. It would be most unfortunate if
parties could not make binding, reliable agreements about
such complex projects, allowing them to make commitments
and seek financing for their conclusion. If the degree of
” The judge had earlier ruled that the judgment against the
BRA for breach of contract could not stand because it was inconsistent
with the jury's specific finding that the BRA was not an agent of the city,
and that the award of dam- ages in tort against the BRA could not stand
because they were subsumed in the contract damages awarded against
the city. A claim against the defendants under G. L. c. 93A had been
dismissed on motion for summary judgment prior to the commencement
of the trial.
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
specificity the city claims is necessary were insisted on, no
such agreements could be concluded. But it is the other side
of this same coin that the procedures necessary to lend
specificity to what at the outset is not entirely specific are an
integral part of the agreement the parties concluded, and, if
a party does not follow those procedures, it should not be
able to claim that the other side is in breach of what is
necessarily still an open-ended arrangement. We conclude
that there was sufficient evidence to find a binding
agreement, as the jury indeed did find, but it is also clear, as
a matter of law, that LPA failed to follow the steps required
of it under the Tripartite Agreement as supplemented to put
the city in breach.
A
The first question is whether there was a valid and
enforceable contract between LPA and the city or whether, as
the city claims, the terms of the Tripartite Agreement as
amended were too indefinite to constitute a contract. The
Tripartite Agreement states that "the parties shall in good
faith negotiate and enter into an agreement,” which the city
argues indicates that no binding agreement had been
concluded. The city points out that Section 6.02 leaves
undetermined the contract price and exactly what is to be
included in the Hayward Parcel. In some cases, the failure to
reduce uncertainties to definite terms is fatal, particularly
where parties have not yet formalized their negotiations or
have left essential terms completely open. See Mendel Kern,
Inc. v. Workshop, Inc., 400 Mass. 277, 280-281(1987) (“an
intention to do something is not necessarily a promise to do
it"); Lucey v. Hero Int'l Corp., 361 Mass. 569, 574 (1972) (no
option contract for purchase of land where parties merely
specified boundaries to be “mutually agreed upon by both
-35-
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
parties"); Saxon Theatre Cop, V-Sage, 347 Mass. 662, 666 (1964)
(no contract for lease of property where parties merely signed
letter of intent that provided no description of the land nor
means of determining rent). But see Shayeb v. Holland, 321
Mass. 429, 431(1947) (enforcing contract despite absence of
price term). We adhere to the principle that "[a]n agreement
to reach an agreement is a contradiction in terms and
imposes no obligation on the parties thereto,” Rosenfeld v.
United States Trust Co., 290 Mass. 210, 217 (1935), in the
circumstances that justify and gave rise to it: where parties
have merely reached the stage of “imperfect negotiation” prior
to formalizing a contract, and have not yet reduced their
agreement to terms. Id. When parties have progressed beyond
that stage, however, a competing principle applies: a contract
Should be interpreted “so as to make it a valid and
enforceable undertaking rather than one of no force and
effect." Shayeb v. Holland, supra at 432. See McMahon v.
Monarch Life Ins. Co., 345 Mass. 261, 264 (1962)." Rules of
contract must not preclude parties from binding themselves
in the face of uncertainty. If parties specify formulae and
procedures that, although contingent on future events,
provide mechanisms to narrow present uncertainties to rights
and obligations, their agreement is binding. See generally
Hastings Assocs. v. Local 369 Bldg. Fund, Inc., 42 Mass. App.
Ct. 162, 169 (1997) (accepting contract calling for appointment
** As Judge Leval has said, "Notwithstanding the importance of
protecting regotiating parties from involuntary judicially imposed
contract, it is equally important that courts enforce and preserve
agreements that were intended as binding, despite a need tor futher
documentation or further negotiation. It is, of course, the aim of contract
law to gratify, not to defeat, expectations that arise out of intended
contractual agreement, despite informality or the need for further
proceedings between the parties.” (Footnotes omitted.) Thachers Ins.
Annuity Ass’n v. Tribune Ca, 670 F. Supp. 491, 497-498 (S.D.NLY. 1987).
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
of neutral third party to determine lease price under
formula); Cataldo v. Zuckerman, 20 Mass. App. Ct. 731, 737
(1985) (accepting formula for determination of compensation
as sufficiently specific to create contract).
The Tripartite Agreement provided a pricing formula to
determine the price to be paid for the Hayward Parcel. When
the parties signed the Tripartite Agreement, most of the
information needed to complete that formula was available.
Because the formula incorporated the fair market value of the
parcel at the time of the future transaction, which, by
definition, was unknown at the time of contracting, Section
13.01 detailed an appraisal procedure to be used for securing
that information. By using that procedure, which called for
the creation of a three-member appraisal board, the parties
could have determined the price to be paid. In addition, the
Second Supplemental Agreement states that "if the Developer
shall exercise the right and option set forth in Section 6.02,
there shall automatically be created an agreement by the
Developer to buy and the City to sell" the Hayward Parcel.
Moreover, it specified that "appropriate details of the
purchase and sale . . . shall be resolved by arbitration" in
accordance with a specified procedure. Although this
provision was not added until 1982, it created a means for
resolving disputes that might arise in the course of effecting
the ultimate sale of the Hayward Parcel. In particular,
questions about the exact size of the parcel and the allocation
of air rights over the relevant public streets were the kind of
“details” that could be worked out using this process.” To
* There is little doubt that all parties understood the general
boundaries of the Hayward Parcel, given that the parcel is bounded by
streets and buildings in a small city block. Although the exact details of
the boundaries of the parcel might have varied depending upon what
building plan was ultimately approved by the city and the BRA, this
was not a situation in which the parties agreed upon the purchase of a
a ee
37.
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
borrow Justice Holmes's metaphor, the machinery was built
and had merely to be set in motion. See Drummond V. Crane,
159 Mass. 577, 579 (1893) (a future writing was merely
“additional wheel in the machinery” of a contract). See also
Sands v. Arruda, 359 Mass. 591, 594 (1971 ); Coan v. Holbrook,
327 Mass. 221, 224 (1951). We therefore conclude that the
Tripartite Agreement, as amended, was an enforceable
contract, under which both parties had certain rights and
obligations.
B
Because the Tripartite Agreement, as amended, was an
enforceable contract, upon LPA's exercise of its option in
1986, there arose a bilateral contract for the purchase and sale
of the Hayward Parcel. See American Oil Co. v. Cherubini, 351
Mass. 581, 585 (1967) (exercise of option creates bilateral
contract for purchase and sale); C. & W Dyeing & Cleaning Co.
v. DeQuattro, 344 Mass. 739, 741 (1962) (same). See also Blum
v. Kenyon, 29 Mass. App. Ct. 417, 420 (1990) (same). The
question then becomes whether LPA can, as a matter of law,
maintain a claim against the city for breach of that contract.
"The general rule is that when performance under a contract
is concurrent one party cannot put the other in default unless
he is ready, able, and willing to perform and has manifested
this by some offer of performance." Leigh v. Rule, 331 Mass.
664, 668 (1954). See 6 Corbin, Contracts § 1258 (1962). Any
material failure by a plaintiff to put a defendant in breach
bars recovery, see Kanavos v. Hancock Bank & Trust Co., 395
totally unspecified or undemarcated property Compare Lucey v. Hero
Int'l Corp., 361 Mass. 569, 573 (1972).
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
Mass. 199, 202-203 (1985); Pas-Teur, Inc. v. Energy Sciences,
Inc., 11 Mass. App. Ct. 967, 968-969 (1981) (citing cases),
unless the plaintiff is excused from tender because the other
party has shown that he cannot or will not perform. Leigh v.
Rule, supra. Even if a potential buyer notifies the seller of the
buyer's intention to tender on a certain date and appears at
the registry of deeds on that date with the required
consideration, there may not be the "readiness to perform"
that is a necessary condition of placing the defendant in
breach. See Mayer v. Boston Metro. Airport Inc., 355 Mass. 344,
350-352, 354-355 (1969).
Applying these principles to the facts most favorable to
LPA in this case, the question becomes whether LPA, as a
matter of law, was ready, able, and willing to close the sale
of the Hayward Parcel prior to January 1, 1989, and whether
LPA indicated as much to the city.” There is no evidence in
the record, and LPA does not now argue, that LPA attempted
to tender payment for the Hayward Parcel between July,
1986, when it exercised its option under the Tripartite
Agreement, and March, 1988, when it transferred its rights to
» *® The city’s motion for directed verdict argued that there was
no evidence to support a finding that "the plaintiff called for a closing to
acquire title” to the Hayward Parcel, and that if there was a demand for
closing it was insufficient. The city incorporated these defenses in its
motion for judgment notwithstanding the verdict. It also argued that
there was no evidence “of either the plaintiff or the city taking any steps
to negotiate or enter into a purchase and sale agreement” during the
option period. Moreover, the issue of LPA’s failure to demand recourse
to the specified arbitration procedure was raised repeatedly over the
course of the litigation, includirg in the city’s motion for special verdict,
motion for directed verdict, by incorporation into its motion for
judgment notwithstanding the verdict, and in the city’s brief to this
court. The city argued in its motion for judgment notwithstanding the
verdict that LPA failed to activate the Section 13.01 appraisal procedure,
and thus that the city could not be in breach.
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427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
Campeau. LPA must therefore rely on the possibility that
Campeau fulfilled LPA's contractual obligations by tendering
payment or demanding the deed. On December 19, 1988, less
than two weeks prior to the drop dead date, Campeau
informed Mayor Flynn by letter that "we have no recourse
but to officially notify the city that we wish to complete the
transaction and make payment immediately." This is the best
evidence in the record of an attempt to tender payment to
force the city to close the sale of the Hayward Parcel.” It is
not sufficient. To place a seller in default, a buyer must
manifest that he is ready, able, and willing to perform by
setting a time and place for passing papers or making some
other concrete offer of performance. See Leigh v. Rule, supra
at 668; LeBlanc v. Molloy, 335 Mass. 636, 637-638 (1957); Mayer
v. Boston Metro. Airport, Inc., supra at 354. Even attributing to
LPA Campeau's action in sending the letter to Mayor Flynn
(an attribution the city urges us not to make), Campeau's
letter does not specify when, where, or how Campeau
intends to tender payment, nor does it indicate what
Campeau believes the city's obligations were at that point in
time.~ Compare Fox of Boylston St. Ltd. Partnership v. Mayor
of Boston, 418 Mass. 816, 819-820 (1994) (notice letter specified
closing date and location); Bucciero v Drinkwater, 13 Mass.
App. Ct. 551, 552-553 (1982) (buyer was ready, willing, and
able to perform when he arrived at closing with payment).
Campeau provided no suggested purchase price, nor even a
7! Prior to December, 1988, Campeau sent several letters to the
BRA asking for an extension of the option period. In none of these
letters, however, did Campeau demand tender of the deed to the
Hayward Parcel or offer to tender payment.
It was also unhelpful of Campeau to send this “tender” to
Mayor Flynn, given that officials from both Campeau and LPA testified
that they knew that the BRA, and not Mayor Flynn's office, had primary
responsibility for the transaction.
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
suggestion as to when Campeau and the city should meet to
resolve the remaining differences. Finally, this single sentence
is embedded in a long letter to the mayor sent only weeks
prior to the termination of the option period. It was an empty
gesture that could not possibly have been acted on in the
time remaining until LPA and Campeau forfeited their rights
under the Tripartite Agreement.
LPA might claim that neither it nor Campeau could have
tendered and thus put the city in breach, because absent a
final delineation of what the parcel contained and an
appraisal of what the parcel was worth there was no basis for
a definitive tender. But the agreement between the parties
specified mechanisms for resolving just these open questions.
Indeed it is only because such mechanisms were specified
that we have been willing to hold that the arrangement
between the parties is definite enough to constitute a binding
agreement.
Under the Section 6.02 price formula, the parties could
not have completed the transaction without using the
procedure set forth in Section 13.01 to determine whether any
increase in the fair market value of the parcel since 1978 was
attributable to the construction of Phase I. The Tripartite
Agreement does not specify which party has the obligation to
trigger Section 13.01's appraisal process; both parties share
this responsibility. Neither party could be ready, able, and
willing to close the sale until this procedure was at least
initiated. Given that this information had not been obtained,
and that neither LPA nor Campeau ever sought to obtain it,
LPA cannot, as a matter of law, have put the city in default.
See Kanavos v. Hancock Bank & Trust, supra at 203 ("[i]f neither
could perform, even if the [defendant] repudiated the
contract, neither could recover”).
Similarly, under the arbitration clause of the Second
Supplemental Amendment, LPA, the city, and the BRA
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427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
shared responsibility for using arbitration to resolve the
remaining differences that LPA claims prevented it from
closing the transaction.” Neither LPA nor the city activated
those procedures. LPA’s complaint that the city and the BRA
breached the contract by failing to determine the exact size
and composition of the Hayward Parcel is undermined by
LPA's failure to initiate arbitration about the undecided
details or even to propose to the city that the procedures
specified in the Tripartite Agreement should be used to
resolve these differences. Similarly, questions about the
treatment of Avenue de Lafayette and the allocation and
value of air rights over it and other streets could have been
answered in arbitration, but neither LPA nor Campeau ever
sought such answers.
LPA's claims must thus rest on the possibility that even
if its tender — particularly the December 19, 1988, letter from
Campeau to Mayor Flynn — was insufficient, LPA (and
Campeau) should be excused from its obligation to tender
because the city's tactics and delays demonstrated that it
would not perform under the contract. See Leigh v. Rule, supra
at 668 ("the law does not require a party to tender
performance if the other party has shown that he cannot or
will not perform"). LPA claims, and the trial judge in denying
the city's motion for directed verdict or judgment
notwithstanding the verdict cites the fact, that the city failed
to secure needed appraisals with which to determine the
price for the Hayward Parcel,” that the BRA had proposed
” LPA only brought suit in 1992, long after such recourse to
arbitration to fix obligations would have been pointless, and so the city
is entitled simply to claim that it had never been put in breach.
* In the Tripartite Agreement, the city was obligated to obtain
appraisals of the 1978 value of parcels D-3 and D-4. Although it secured
an appraisal for parcel D-3, it did not for D-4. The city argues, however,
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
zoning regulations that placed unacceptable height
restrictions on the parcel, that the city’s transportation
department was threatening to route a street through the
parcel, and that LPA, Campeau, the city, and the BRA had
failed to reach agreement as to how to treat the Avenue de
Lafayette. These facts, taken alone or together, do not excuse
the obligation to tender. There was testimony from Marco
Ottieri, LPA's project manager, that throughout the mid-
1980's, LPA was committed to purchasing the Hayward
Parcel regardless of its ultimate configuration and of
restrictions placed upon the parcel by the city, because it
would "build whatever we could build there profitably.” He
stated that LPA would have bought the parcel regardless of
height restrictions and whether or not the city kept open
Avenue de Lafayette. This seriously weakens LPA's argument
that the city's proposed regulation of the Hayward Parcel
materially affected the transaction or amounted to a
repudiation.
Unlike a situation in which a defendant clearly expresses
an unwillingness to perform, thereby repudiating the
contract,” here LPA seeks to attribute repudiation to the city
based on the mere fact that uncertainties remained that LPA
shared responsibility for resolving. Compare Hastings Assocs.
v. Local 369 Bldg. Fund, Inc., 42 Mass. App. Ct. 162, 177 (1997)
(where defendant indicated that it would not fulfil its
obligations, defendant was in default and plaintiff was not
obliged to use specified procedures to determine value of
that the appraisals for Di, D-2, and D-3 sufficed to determine the value
of D-4, which was a very small part of the over-all parcel.
> Compare Kanavos V. Hancock Bank & Trust Co., 395 Mass.
199, 201-202 (1985) (bank repudiated Option contract to sell shares of
stock by selling shares to a third party); Limpus v. Armstrong, 3 Mass.
App. Ct. 19, 22 (1975) (defendants repudiated purchase and sale contract
by selling property to third party).
~ Fo ere ee, Oe
ee ee eT ee
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
business). In this circumstance, where a complex contract
leaves certain key terms to be decided by formulae and
procedures, and where both parties share responsibility for
activating those procedures, the plaintiff cannot be ready,
able, and willing to tender, nor can the plaintiff put the
defendant in default, unless the plaintiff attempts to use the
contractually specified mechanisms to overcome the very
uncertainties they were designed for. If two parties form an
agreement that incorporates procedural devices to overcome
unknowns, a plaintiff must at least attempt to make use of
those devices before he can claim that the unknowns
prevented meeting his obligations at law. This is particularly
true in a complex and heavily regulated transaction such as
this one, where public entities and public and elected officials
with changing policies and constituencies are involved, and
the transaction spans many years. This is not to say that
governments are absolved from performing contractual
obligations, but where a government contract specifies
procedures and methods a private party must be particularly
assiduous to comply with them. "Men must turn Square
corners when they deal with the Government." Rock Island,
Ark. & La. R.R. v. United States, 254 U.S. 141, 143 (1920)
(Holmes, J.). LPA knew at the time it entered into the
contract with the city that political bodies have various
obligations and constraints, and that closing the sale after
exercising its option would require agreeing on the
transaction’s specifics. We therefore conclude as a matter of
law that LPA was not excused from its obligation to put the
city in default, and that LPA did not fulfil this obligation.
Cc
LPA alleges not only that the city breached the Tripartite
Agreement but that it did so in bad faith. This allegation of
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
bad faith does not change our analysis in the preceding
subsection.
The last clause of the Third Supplemental Agreement
states that the January 1, 1989, drop dead date shall not apply
if "the City and/or the [BRA] shall fail to work in good faith
with the Developer through the design review process to
conclude a closing." The Third Supplemental Agreement,
however, was not signed until October 29, 1987, immediately
prior to LPA's transfer of its rights to Campeau.” There is
overwhelming evidence that the review process progressed
appropriately as soon as Campeau initiated the process in the
spring of 1988,” only months prior to the drop dead date.”
° Campeau's actions in this regard must be attributed to LPA,
for if they are not then the city’s alternate argument that LPA
abandoned the contract when it transferred its rights to Campeau would
take on considerable force. LPA can- not have it both ways.
7” Although LPA complains that the BRA's handling of the
design review process prior to October, 1987, when the Third
Supplemental Agreement was signed, violated the implied covenant of
good faith, we reject this claim on two grounds. First, when the parties
amended their agreement in 1987 and included a good faith clause, the
slate was wiped clean for these purposes. Second, LPA failed to show
that any delay in the design review process prior to 1988 was
attributable to bad faith on the part of the city or the BRA rather than a
lack of preparedness or persistence on LPA's part. LPA was engaged in
discussions and negotiations with the BRA during 1984, 1985, and 1986,
and may have completed the first phase of the BRA's four-stage
authorization process by submitting an initial sketch of its plans for the
Hayward Parcel, but LPA concedes that it did not progress beyond that
very preliminary point. LPA did not press forward with its design, and
it therefore cannot complain that its design was never approved.
** On April 25, 1988, Campeau’s senior vice-president, Lenard
McQuarrie, sent the BRA's director a letter indicating that Campeau had
“begun to marshal” resources for the project and was about to “initiate”
the review process. On May 16, 1988, McQuarrie stated that Campeau
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
Campeau's letters to the BRA during 1988 consistently
demonstrate that the design review process was proceeding
smoothly and in a collaborative fashion.” Thus, LPA cannot
argue that the BRA or the city acted in bad faith with regard
to the design review process during this period.”
Had bad faith infected the design review process itself,
the drop dead date would have been extended automatically
according to the terms of the Third Supplemental Agreement.
As the review process was not so infected, LPA' S bad faith
claim rests on the fact that the BRA refused to extend the
drop dead date despite Campeau' s repeated requests for
such an extension. A duty of good faith and fair dealing is
implicit in the performance of a party's contractual
obligations, see Fortune v. National Cash Register Co., 373 Mass.
96, 102-103 (1977), and generally if parties modify an existing
contract, their modification must be made in good faith: one
was “beginning to commit significant funds to preliminary design . . .
for the Hayward Place site.”
* A June 17, 1988, letter from McQuarrie to the BRA stated
that “(b]ased on the cooperation we are receiving from both yourself and
your staff, we are optimistic that the project will proceed quickly
through the. . . Development Review process. Similarly, an October 21,
1988, letter stated that [w]e are making excellent progress on the .. .
master planning of Boston Crossing and have begun the . . . review
process." And on December 19, 1988, Campeau’s letter to Mayor Flynn
stated that all parties were "making good progress towards the final
approval of this project.”
* Moreover, even if the city did act in bad faith in the design
review process and thus the option period was extended beyond
January 1, 1989, neither Campeau nor LPA ever attempted to enforce the
agreement by seeking arbitration, tendering payment, or seeking a
closing after that date. As noted above, Campeau received design
authorization in June, 1989, but went bankrupt in 1990. LPA did not
then renew its negotiations with the city, but instead filed suit against
Campeau in July, 1990, and against the city and the BRA in March, 1992.
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
party cannot extract the modification from the other
wrongfully. See U.C.C. § 2-209, comment 2 (1989). But LPA
cites no authority for the proposition that the refusal by one
party to accede to a modification that would inure to the
benefit of the other party is, in itself, bad faith, where the
only ill motive alleged is a desire to avoid the benefit in
question. Absent bad faith in the design review process, the
city and the BRA were under no contractual obligation to
grant an extension to LPA. Even if the defendants’ refusal to
extend the deadline was motivated by the possibility of
evading the pricing formula in the Tripartite Agreement, as
LPA suggests,” that refusal could not constitute bad faith,
because the BRA had no contractual duty to grant the
extension that LPA sought. Compare Anthony's Pier Four, Inc.
v. HBC Assocs., 411 Mass. 451, 472 (1991) (finding of bad faith
justified where contract required defendant to approve a
development plan and defendant refused to do so in order to
extract monetary concessions from plaintiff). See Restatement
of Contracts § 205 comment a (1979).
Finally, the mere fact that the city did not convey the
Hayward Parcel to Campeau prior to January 1, 1989, does
not support a claim of bad faith. Particularly given the
uncertainties that LPA added to the transaction — including
*! LPA presented evidence that during the period in which
LPA sought authorization of the sale to Campeau, the city’s real
property board publicly expressed concern that the pricing formula in
the Tripartite Agreement was unfavorable to the city. On December 30,
1987, Commissioner J. Edward Roche of the city’s real property
department wrote Mayor Flynn expressing concern that a transfer of
rights from LPA to Campeau might bring about a “windfall” to
Campeau because of the pricing formula in Section 6.02. LPA also
showed that the minutes of a meeting of the real property board on
January 22, 1988, stated that "the Board expressed its desire . . . to
receive the fair market value for the Hayward Parcel (abandoning the
Tripartite formula).”
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427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
the substitution of Campeau for LPA and Campeau's
including in its design proposals submitted for review
designs for a much larger project, the Boston Crossing
project, than LPA's original project that referred only to the
Hayward Parcel — LPA cannot maintain that the city acted
in bad faith by not completing the transaction, unless LPA
and Campeau had also done all they could to force the city
to close the sale. Had LPA, or Campeau, been serious about
putting the city in default, it could either have indicated more
clearly that it was ready, able, and willing to close the sale by
indicating its understanding of the exact composition of and
price to be paid for the Hayward Parcel and setting a time
and place for a transfer of the deed, thereby forcing the city
to make use of the appraisal and arbitration procedures, or
itself pressed the appraisal and arbitration procedures
specified in the Tripartite Agreement to resolve all remaining
disagreements. That it did none of these things bars its claim
against the city.” Neither party tendered performance, and
neither was in breach or default. See Flynn v. Wallace, 359
Mass. 711, 716 (1971); Hapgood V. Shaw, 105 Mass. 276, 279
(1870). See also Corbin, Contracts § 663 (1960); § 1258 (1962).
Il
We turn now to LPA's claims against the BRA. The
Superior Court jury found that the BRA tortiously and
intentionally interfered with LPA's contractual relations with
* The jury returned a special verdict that
affirmed that "L.P.A. perform[ed] its obligations under
the contract." This verdict was incorrect as a matter of
law, given the fact that LPA fulfilled none of the
obligations set out above.
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
Campeau. The judge granted the BRA's motion for judgment
notwithstanding the jury's verdict. The judge ruled that the
Massachusetts Tort Claims Act (Act), G. L. c. 258, § 10 (c),
renders the BRA, as a "public employer,” immune from suit
for “any claim arising out of an intentional tort, including . .
. interference with contractual relations." LPA argues that the
BRA was not entitled to this ruling because it had raised the
bar of the statute in an untimely fashion; because the BRA
was an “independent body politic and corporate" and as such
explicitly excluded by G. L. c. 258, § I, from the immunity
accorded by § 10 (c); and because, even if § 10 (c) did apply
to the BRA, this would only remit the BRA to its situation
before the enactment of c. 258, at which time the BRA was
amenable to suit for intentional torts.
A
Although the BRA did not raise the bar of the statute in
a motion to dismiss or at summary judgment, it did do so in
its motion for a directed verdict at the close of all the
evidence. The BRA renewed this argument in a motion for
judgment notwithstanding the verdict. The judge ruled that
this was sufficient, and that there had been a "flurry of
arguments from both sides” on the issue. The only relevant
authorities LPA cites for the proposition that the BRA raised
this issue too late have to do with refusals to grant leave to
amend pleadings because of prejudice to the nonmoving
party. See Mathis v. Massachusetts Elec. Co., 409 Mass. 256, 264
(1991); Hamed v. Fadili, 408 Mass. 100, 105 (1990). These
authorities recognize that this sort of matter is committed to
the discretion of the judge. Assuming that this should be
treated as a motion to amend the pleadings, we conclude that
the judge did not abuse his discretion. This is particularly so
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
because the status of the BRA for purposes of § 10 (c) is a
purely legal question not requiring recourse to the jury.
B
In Whitney v. Worcester, 373 Mass. 208, 212 (1977), and
Mo- rash & Sons V. Commonwealth, 363 Mass. 612 (1973), we
warned that, if the Legislature did not act to abrogate the
immunity from liability in tort accorded at common law to
governmental entities, this court would do so. The
Massachusetts Tort Claims Act followed in 1978, providing a
scheme of tort liability for "public employers” in certain
circumstances and subject to several conditions. See generally
Glannon, Governmental Tort Liability under the
Massachusetts Tort Claims Act of 1978, 66 Mass. L. Rev. 7, 10
(1981). Section 10 (c) excludes liability for intentional torts
from the scope of c. 258 and specifically mentions the tort of
interference with contractual relations. See G. L. c. 258, § 10
(c). Section 1 defines a public employer as
“the commonwealth and any county, city, town,
educational collaborative, or district, including any
public health district or joint district or regional health
district or regional health board established pursuant
to the provisions of section twenty-seven A or
twenty-seven B of chapter one hundred and eleven,
and any department, office, commission, committee,
council, board, division, bureau, institution, agency or
authority thereof. . . which exercises direction and
control over the public employee, but not a private
contractor with any such public employer, the
Massachusetts Bay Transportation Authority, the
Massachusetts Port Authority, the Massachusetts
Turnpike Authority, or any other independent body
427 Mass. 509 (1998)
Lafayette Place Assuciates v. Boston Redevelopment Authority
politic and corporate. With respect to public
employees of a school committee of a city or town,
the public employer for the purposes of this chapter
shall be deemed to be said respective city or town.
The Superior Court judge ruled that the BRA was not an
"independent body politic and corporate.” Neither the statute
itself nor our prior decisions allow a ready answer to the
controversy the parties raise about this classification.
Certainly the term is not self-defining. The leading case on?
this matter, the learned cpinion of the Appeals Court in
Kargman v. Boston Water & Sewer Comm'n, 18 Mass. App. Ct.
_ 51(1984), see Commesso v. Hingham Hous. Auth., 399 Mass. 805,
808 (1987), traces the history of the term "body corporate and
politic" from its original appearance in the Preamble to our
Constitution to its present usage to designate “a legal entity
[created by the Legislature] to perform specified tasks
deemed to be essential public functions." Kargman, supra at
55. It is only the subset of independent bodies corporate and
politic that do not enjoy immunity from intentional torts
under § 10 (c). What entities, in addition to the three
specifically mentioned in § 1, are to be identified as
independent bodies corporate and politic we have been left
to discern from a rather - adequate set of hints. The term
itself is not very helpful, so that the Appeals Court in
Kargman sought to extrapolate from the list of authorities
specifically designated as independent in § 1 to instances not
specifically named. It identified two general features of the
designated entities: financial independence and _ political
independence. The court went on to identify certain indicia
of financial and political independence, id. at 56-58, and
concluded that the Boston water and sewer commission was
such an independent body. By defining the term
independence in terms of financial and__ political
eae EE
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
independence, the Kargman analysis at least has the virtue of
disaggregating the term into two possibly more manageable
units, but the norm is still defined by reference to itself, and
that is a problem.
The Superior Court judge, in a thorough and closely
reasoned memorandum, applied the Kargman analysis to the
situation of the BRA. He reached his conclusion that the BRA
is not an independent body politic by emphasizing the factors
that detract from the BRA's political independence: when
initiating urban renewal projects it is subject to stringent
public notice requirements and requires approval for many
of its actions at the State and local level. He also found
lacking indicia of financial independence, in that the BRA
must account for its expenditures at the State and the local
level and may receive State financial assistance for its urban
renewal projects and advances to cover certain of its
expenses. He concluded that "the BRA is subject to many
checks on its power to initiate and carry out redevelopment
Projects in Boston, which do not comport with political and
financial independence. It is significantly less autonomous
than either the MBTA, Turnpike, or Massport.” LPA points
out the many ways in which the BRA has financial and
political independence similar to that of the three authorities
named in § 1: removal of authority members only for cause;
its ability to sue and be sued in its own name; its ability to
hold title to property in its own name; its enjoyment of the
power of eminent domain; its ability to incur indebtedness
and issue bonds without pledging the credit of the State or
city; and its ability to charge market rents for its properties.
LPA also compares the BRA to the Boston water and sewer
commission, which was held to be independent in Kargman.
Moreover, LPA points out that some of the features urged by
the BRA as indicia of a lack of independence, such as the
oversight by the State auditor of its expenditures which the
judge mentions, apply to the three named authorities as well.
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427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
This battle of factors seems much closer to a standoff than
either the BRA's or the judge's analysis would acknowledge.
Any analysis that relies heavily on the Kargman factors
must cope with the embarrassment that just the factors that
are discerned in Kargman as the indicia of independence of
the three named entities are present with at least as much
force in the case of Boston, other cities and towns, and the
Commonwealth itself — all of which are designated at the
beginning of § 1 as public employers. The BRA suggests that
perhaps recourse to a possible underlying rationale for the
designation of the three named entities might assist analysis:
they all provide services for a fee not to the general public
but to that specific segment of the public that chooses to use
those services, and so it is fair that the users bear the cost in
higher fees of the injuries intentionally inflicted by the
authorities. This is only mildly convincing. We do not see
why the costs of injuries inflicted by non-independent bodies
should be borne by the injured parties alone and not by the
public in general.*
Though we do not decline the illumination that these
proposals and analyses might offer, we probably cannot do
much better in this case than to rely on analogy, that logically
imperfect but inveterate tool of the law in tight corners. See
generally Brewer, Exemplary Reasoning: Semantics,
Pragmatics, and the Rational Force of Legal Argument by
Analogy, 109 Harv. L. Rev. 925 (1996); Levi, An Introduction
to Legal Reasoning (1949). And here the closest analogy to
the BRA are the local housing authorities, to which in
Commesso we declined to as- sign independent status for the
purposes of §§ 1 and 10 (c). See Commesso, supra at 809. As
the Superior Court judge noted, it is significant that
* In Kargman v. Boston Water & Sewer Comm'n, 18 Mass. App.
Ct. 51, 56 n.5 (1984), the Appeals Court cast doubt on this criterion.
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427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
redevelopment authorities were created by the Legislature to
assume the powers, such as land assembly and the carrying
out of redevelopment projects, formerly held by housing
authorities. See St. 1952, c. 617, § 4, amending G. L. c. 121, §
’ 26QQ. In communities that choose not to establish
redevelopment authorities, the powers assigned to
redevelopment authorities remain with the housing
authorities. See G. L. c. 121B, § 9. If a community chooses to
establish a redevelopment authority, the governance of that
authority is the same as that which applies to a housing
authority, G. L. c. 121B, §§ 5-7. And, as the Superior Court
judge pointed out,
"As operating agencies, housing and redevelopment
authorities enjoy the same powers, including but not
limited to the power to: sue and be sued; work with
the federal government on urban renewal projects;
receive public or private loans and grants; take
property by eminent domain; clear and improve
property; enter into contracts necessary to carry out
housing and urban renewal projects; make relocation
payments to displaced businesses or persons; borrow
money upon the security of their bonds or notes;
invest in securities; contract with organizations
undertaking c. 121A projects; make and amend rules
| and regulations; and join with other operating
i agencies in exercising their respective powers. G. L. c.
121B, § 11.”
bh ide hts edt sat hile ids
Indeed, the two-page chart provided by LPA as an appendix
to its brief here comparing the political and financial situation
of various types of entities in the Commonwealth shows only
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
one nontrivial difference* between the BRA and a housing
authority: the existence of statutory limits on the rent that
housing authorities may charge tenants, see 0. L. c. 121 B, §
32, and the absence of such constraints on sales and leases of
property by a redevelopment authority under G. L. c. 121B,
§ 49. But of course this difference is merely the result of the
assignment of functions to a redevelopment authority in
communities that choose to establish one. If redevelopment
functions remain in the housing authority, which then plays
a dual role pursuant to G. L. c. 121B, § 9 (b) or (c), then the
housing authority too, in respect to those functions, may
charge market rents.” And it would be captious to suggest
that a housing authority does or does not enjoy the
immunities of the Act depending on whether redevelopment
functions have been left with it.
The BRA is unique among redevelopment authorities and
enjoys a special statutory basis. See generally Aronson, The
Boston Redevelopment Authority: A Quasi Public Authority,
43 B.U. L. Rev. 466 (1963). The most significant difference
between the BRA and other redevelopment authorities is that
the BRA functions as the city's planning board and enjoys the
powers of the State housing board in respect to c. 121A urban
renewal projects.” See St. 1960, c. 652. See also Opinion of the
* LPA also notes that the BRA does not need planning board
approval for projects, whereas a housing authority does. This is because
the BRA has had transferred to it the functions of the city’s planning
board in respect to its projects.
> General Laws c. 121B, § 9, states that housing authorities
with redevelopment authority have the powers granted regular
redevelopment authorities under (1. L. 121B, § 49.
** General Laws c. 121A, § 4, permits the housing board to
make rules and regulations regarding the approval of redevelopment
projects. The housing board must approve most redevelopment projects,
G. L. c. 121 A, § 5, and must inspect the construction of redevelopment
-55-
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
Justices, 341 Mass. 760, 787-788 (1960). But both a city
planning board and the State housing board would certainly
be within the § 1 definition of public employers for the
purposes of G. L. c. 258, § 10, and the addition of their
powers should not make the designation of the BRA as a
public employer less apt.
Finally, we resolve whatever indeterminacy this analysis
may leave in favor of subjecting the BRA to the general
regime of c. 258. The BRA is certainly a public body, a
governmental entity of some sort performing public
functions. Any doubts about the BRA's status under the
difficult and uncertain designation of "independent body
politic and corporate" should be resolved against such a
designation, because of the desirability of making the c. 258
regime as comprehensive as possible, thus avoiding
reintroducing the “crazy quilt" of immunities, Rogers v.
Metropolitan- Dist. Comm'n, 18 Mass. App. Ct. 337, 338-339
(1984), which the Act was meant to replace. This is
particularly so because any decision taking a governmental
entity out of the category of "public employers” has the effect
not only, as here, of making that entity liable for intentional
torts, but also of removing the immunities provided by the
other provisions of § 10. This may have large consequences
to which none of our cases so far has attended. Of particular
concern is removing a governmental body from the
protection of the immunity of § 10 (b), which refers to
"any claim based upon the exercise or performance or
the failure to exercise or perform a discretionary
function or duty on the part of a public employer or
public employee, acting within the scope of his office
projects to ensure that construction complies with the approved
proposal. G. L. c. 121A, § 8.
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
or employment, whether or not the discretion
involved is abused.”
We conclude that the BRA is a public employer not excluded
from the scope of the Act,
Cc
We have less difficulty disposing of LPA's ingenious
argument that, even if the BRA is not an independent body
politic and corporate, § 10 (c) does not confer upon it
immunity from liability for intentional torts. Section 10 of c.
258 provides that "[t]he provisions of sections one to eight,
inclusive, shall not apply to" any of the claims listed in that
section. G. L. c. 258, § 10. The list includes, among other
things, claims based "on the exercise or performance or the
failure to exercise or perform a discretionary function,” § 10
(b); and claims arising out of intentional torts, § 10 (c). Other
excluded claims relate to assessment or collection of taxes, §
10 (d); issuance, denial or revocation of permits or licenses,
§ 10 (e); inadequate or negligent inspections, § 10 (1); failure
to provide fire protection or police services, § 10 (g)-(h); and
negligent provision of medical services, § 10 (1) (2). Section
2 provides for liability of public employers for negligence, G.
L. c. 258, § 2, and §§ 4-7, impose certain prerequisites for
claims against public employers, including the prior
presentation of such claims for administrative action, and
provide for procedures for their resolution. G. L. c. 258, §§
4-7. LPA argues that because § 10 provides that none of these
provisions shall apply to intentional torts, the result is that
such claims are simply remitted to the preexisting law
governing liability. And because the BRA's enabling statute,
G. L. c. 121B, § 13, which preexisted C. 258, provided that the
BRA shall be “liable . . . in tort in the same manner as a
Oe En Oe ey ee ree cara
ati Site adi aedt caeek ta die ene: eee ee
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
private corporation,” the BRA continues to be liable for the
intentional tort charged here. LPA finds confirmation for this
conclusion in our decision in Spring v. Geriatric Auth. of
Holyoke, 394 Mass. 274 (1985), in which we stated that "[bly
excluding intentional torts from the scope of G. L. c. 258, the
Legislature left open the matter of governmental liability for
intentional torts. Consistent with the common law principles
of governmental immunity which preceded the Massachusetts
Tort Claims Act, we conclude that public employers retain
their immunity from suits arising from intentional torts.” Id.
at 284-285. Because the preexisting law, to which we are
remitted according to LPA's argument, allowed for BRA's
liability for intentional torts, the BRA does not enjoy
immunity for intentional torts now.
LPA's reading of the statute is not in accord with its
over-all purpose of enacting a comprehensive and uniform
regime of tort liability for public employers in the wake of
our decisions in Whitney v. Worcester, 373 Mass. 208, 212
(1977), and Mo- rash & Sons v. Commonwealth, 363 Mass. 612
(1973). Although we have not undertaken a review of such
legislation, it is likely that the enabling statutes of many
public bodies contain a variety of provisions relating to the
tort liability of those bodies. It would be the upshot of LPA's
argument that, whenever any of the provisions of § 10
(including, for instance, those excluding liability for
discretionary functions or for failure to grant or renew a
license or permit) applied, we would be remitted to the
preexisting law. It is sufficient to mention that the preexisting
law to which LPA refers, G. L. c. 121B, § 13, applies to the
Boston Housing Authority (BHA) as well, so that the BHA on
this argument would be liable for the whole range of claims
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
excluded by § 10.” Compare Commesso v. Hingham Hous.
Auth., supra at 809. Such a reading would be so manifestly
against the intention of the Legislature to introduce a uniform
regime of tort liability for public bodies, see Rogers v.
Metropolitan Dist. Comm'n, supra, that a mere drafting
infelicity will not lead us to adopt it. Similarly the statement
quoted from our decision in Spring will not move us in that
direction. In context it was quite irrelevant to the Spring case
whether § 10 (c) was described as prescribing immunity for
intentional torts or as remitting the matter to the preexisting
common law, which in that instance would have foreclosed
tort liability altogether. See Spring, supra at 295 (Abrams, J.,
concurring) (Federal Tort Claims Act, 28 U.S.C. § 2680[h]
[1982], on which c. 258 is patterned, provides an interpretive
guide and has been construed "as immunizing public
employers from suits arising out of intentional torts"). We
therefore hold that the BRA is immune under G. L. c. 258, §
10 (c), from suit for intentional torts.
IV
LPA also claims that the motion judge erred in entering
summary judgment against LPA on its G. L. c. 93A claims
against the city and the BRA. Chapter 93A proscribes “unfair
or deceptive practices in the conduct of any trade or
commerce.” G. L. c. 93A, § 2 (a). A party engages in trade or
*” LPA seeks support for its argument in a 1983 amendment of
G. L. c. 121B, § 13, that altered the treatment of the liability of
employees of redevelopment and housing authorities. This is
unpersuasive. The Legislature did not address itself directly to the
operative first sentence of § 13, and we will not assume that an
amendment of an independent portion of the section endorsed or
reaffirmed that first sentence in the face of the strong Legislative
mandate of c. 258.
427 Mass. 509 (1998) .
Lafayette Place Associates v. Boston Redevelopment Authority
commerce when it acts in a "business context." "This court .
. . has repeatedly held that c. 93A does not apply to parties
motivated by ‘legislative mandate, not business or personal
reasons.’ " Peabody N.E., Inc. v. Marshfield 426 Mass. 436,
439-440 (1998), quoting Poznik v. Medical Professional Ins.
Ass'n, 417 Mass. 48, 52 (1994). The gravamen of LPA's claim
against the city and the BRA is that it was cheated out of the
benefit that would have accrued to it if the agreement
regarding the Hayward Parcel had been performed. This is
indeed the kind of claim that is often made under c. 935A, see
e.g., Anthony's Pier Four; Inc. v. HBC Assocs., 411 Mass. 451,
475 (1991), but that does not mean that the city was engaged
: in trade or commerce when it entered into the arrangement
: nor when it took the actions of which LPA now complains.
It is perfectly possible for a governmental entity to engage in
dishonest or unscrupulous behavior as it pursues its
legislatively mandated ends. The allowance of the motion of
summary judgment was correct because the defendants’
involveinent in these transactions was wholly in pursuit of
the legislatively prescribed mandate of G. L. c. 121A, § 2, that
"the redevelopment of land not only in sub-standard areas
but also in blighted open and decadent areas in accordance
with a comprehensive plan to promote the sound growth of
; the community is necessary.” There simply cannot be any
i doubt that the parties’ dealings took place in the context of
the pursuit of the urban renewal and redevelopment goals of
i c. 121A and c. 121B. That is the premise of every other part
of this litigation. Although we have not yet addressed the
question whether a public entity is ever a proper defendant
427 Mass. 509 (1998)
Lafayette Place Associates v. Boston Redevelopment Authority
in a c. 93A action, it is quite clear that in this case at least
these public entities are not.*
V
Because we conclude as a matter of law that the city did
not breach its contract with LPA, we reverse the judgment of
the Superior Court and order entry of judgment for the city.
Whatever contractual claims LPA may have against the BRA
must fail for the same reason. The judgment in favor of the
BRA is affirmed because we agree that it is immune from suit
for an intentional tort. The judgment in favor of the city and
the BRA dismissing LPA's c. 93A is also affirmed.
So ordered.
8 Cases such as Boston v. Aetna Life Ins. Co., 399 Mass. 569, 575
(1987), in which the public entity may act as a plaintiff in a c. 93A
action, are not apposite. One who deals with a public entity, as for
instance in providing it with goods or services, may very well be
engaged in trade or commerce without the entity being so engaged as
well.
Saath
ey ajar
en gee at
-62-
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
CIVIL ACTION
No. 92-1664-A
LAFAYETTE PLACE ASSOCIATES,
Plaintiff
Vv.
BOSTON REDEVELOPMENT AUTHORITY, et al.,
Defendants
MEMORANDUM OF DECISION AND ORDER ON
PLAINTIFF'S MOTION TO AMEND JUDGMENT
The plaintiff, Lafayette Place Associates, "LPA", has
moved this court to amend the judgment against the City
of Boston by establishing Jan. 1, 1989 as the breach of
contract date in order that prejudgment interest be
computed as of that date pursuant to G.L. c. 231, §6C. For
the foregoing reasons, the Motion is denied.
This civil action was tried before a jury which found
that the City of Boston had entered into a valid contract
with LPA, that LPA performed its obligations under the
-63-
contract, that the City of Boston breached the contract, and
that LPA's damages as a result of the breach amounted to
$9,600,000. The verdict was recorded on a special verdict
slip containing nine questions. The jury verdict came after
a protracted, vigorously contested trial involving complex
issues, occasionally perplexing testimony and a mass of
elaborate documentary evidence.
There was no request that the court instruct the jury to
determine a breach of contract date or dates; there was no
request for any instruction as to that facet of the case. The
court neither instructed on the issue nor was the jury asked
to find a date or dates of the breach of contract by a special
question on the verdict slip. Nor was the jury asked by
special question to designate the conduct or action of
Boston which constituted the breach of contract.
The plaintiff did not object either to the lack of jury
instructions on determining the date of any breach of
contract, or to the lack of any question on the special
verdict slip establishing a date of breach. After the jury
-64-
found a breach of contract and damages of $9,600,000,
judgment entered with interest accruing from the date of
commencement of the action, March 16, 1992. (The original
judgment appeared to read: May 16, 1992; this has been
corrected by an agreed motion such that it now reads: May
16, 1992).
Although the jury did not find any date of breach of
the contract, the plaintiff's motion to amend judgment
requests that the court set the date of the breach at January
1, 1989, which was the date for closing on the Hayward
‘ parcel according to the Tripartite Agreement as amended
by the "Third Supplemental Agreement and Amendment".
DISCUSSION
Prejudgment interest in contract actions is determined
by GLL. 231, §6C.
In all actions based on contractual obligations, upon
a verdict, finding or order for judgment for
pecuniary damages, interest shall be added by the
clerk of the court to the amount of damages, at the
contract rate, if established, or at the rate of twelve
per cent per annum from the date of the breach or
demand. If the date of the breach or demand is not
-65-
established, interest shall be added by the clerk of
the court, at such contractual rate, or at the rate of
twelve percent per annum from the date of the
commencement of the action . . .”
The absence of a finding as to the date of breach may
have resulted from the plaintiff's tactical decision not to
pursue that issue. Placing the additional burden on the
jury to find a specific act by the City of Boston constituting
the breach and/or a specific date on which the breach
occurred, may have been sufficiently onerous so as to
jeopardize a jury finding that a breach had been proven.
Regardless of the reasons for not having the jury
establish the date of the breach, this court is not free to
evaluate the evidence and make a finding as to that date.
Fixing the date of the alleged breach is a question for the
trier of fact and, after a trial by jury, the trial judge can not
make that determination. Karen Construction Co. v.
Lizotte, 396 Mass. 143, 149 (1985); Deerskin Trading Post,
Inc. v. Spencer Press, Inc., 398 Mass 118, 125 (1986). A trial
judge sitting without jury may determine the date of
66
demand or breach. Cesco Mfg. Corp. v. Norcross, Inc., 7
Mass. App. Ct. 837, 845 (1979). See Sterilite Corp. v.
Continental Casualty Co., 397 Mass. 837, 841-842 (1986)
(after summary judgment declaring a breach of duty to
ERP MSE Ray A phn slor es
Xt nanan RE WE nen nL Re co ahs Magan aabe ee Ceasar asteeaNeeMie aaa
defend, a judge may establish the breach date). There were
no stipulations about the date of the breach. Compare
Bushkin Associates, Inc. v. Raytheon Co., 906 F.2d. 11 (1st
4 Cir. 1990).
4 In summary, where the plaintiff never requested and
i the jury was never asked to establish the date of the
i
breach, and where there was no finding as to the date of
fer nai Seb Tah Peat
the breach, this court can not and will not make that
determination. And, where the date of the breach is not
established, prejudgment interest is to be calculated from
the date of the commencement of the action. Starr v.
Fordham, 420 Mass. 178, 195 (1995).
a
’ i
24
=
3
Wy 2
The plaintiff's motion to amend is DENIED. Interest
on the judgment will run from March 16, 1992.
/s/_ Robert A. Mulligan
Justice of the Superior Court
DATED: August 20, 1997
-69-
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, SS. SUPERIOR COURT
CIVIL ACTION
NO. 92-1664A
LAFAYETTE PLACE ASSOCIATES,
Plaintiff
Vs.
BOSTON REDEVELOPMENT AUTHORITY and
CITY OF BOSTON,
Defendants
SPECIAL JURY VERDICT
PURSUANT TO MASS. R. CIV. P. 49(a)
1. Was there a valid contract between the City of Boston
and L.P.A. for the purchase and sale of the Hayward
parcel?
YES X NO
If yes, answer QO #2, if no, proceed no further but
announce that you have reached a verdict.
2. Did L.P.A. perform its obligations under the contract?
YES X NO
If yes, proceed to Q #4, if no, proceed to Q #3.
If L.P.A. did not perform its obligation under the
contract was its failure to perform caused solely by a
material breach by the City of Boston or solely because
the City of Boston and the BRA were dealing with
L.P.A. in bad faith during the process?
Breach by City YES NO
Bad faith by B.R.A. YES NO
Bad faith by City YES NO
If yes to any part of QO #3 proceed to OQ #4, if no,
proceed no further but announce that you have
reached a verdict.
Did the City of Boston breach the contract?
YES x NO
if yes or no, proceed to Q #5.
Was the B.R.A. acting as the agent of the City of Boston
regarding the purchase and sale of the Hayward
parcel?
YES NO X
If yes, proceed to O #6. If no, follow instructions
-under Q #6.
6. Did the B.R.A. breach the contract?
YES X NO
If you answered QO #6 yes or O #4 yes (i.e. found a
breach by the City or B.R.A.) answer OQ #7, otherwise
announce you have reached a verdict.
7. What damages were proximately caused to L.P.A. by
the breach, less any money received for the Hayward
parcel from Campeau.
Nine Million Six Hundred Thousand
ee ton Six Hundred Thousand
(WORDS)
9.600,000.00
(FIGURES)
If answered Q #7, proceed to QO #8.
8. Did the B.R.A. intentionally interfere with the
contractual relations between L.P.A. and Campeau?
YES X NO
oe oe
-72-
If yes, answer O #,, if no, proceed no further.
9. What damages resulted to L.P.A. from that interference
(less the money received from Campeau).
Six Million Four Hundred Thousand
(WORDS)
6,400,000.00
(FIGURES)
I hereby certify that the verdict is agreed to by ten of
the twelve jurors.
Claudia Juarez
FORELADY
DATED: , 1998
7.
APPENDIX E
-74-
TO: Mayor Raymond L. Flynn
FROM: Commissioner J. Edward Roche
DATE: December 30, 1987
RE: Sale of Lafayette Place Project
Lafayette Place Associates/Mondev wishes to
sell its development (the retail shops and
garage but not the hotel) to Campeau
Corporation of Toronto. In order to sell said
development, Lafayette (and Campeau) must
obtain the approval of the Boston
Redevelopment Authority and the Real
Property Board.
If, without negotiation, the BRA and City
allow the sale or transfer to occur, the new
owner, Campeau (and also the prior owner)
would realize an immediate monetary windfall
due to the ‘Option Agreement’ in this
Tripartite Agreement and the existing
iavorable lease Mondev has with the city
executed in 1980/81 by the White
Administration.
The Option Agreement concerns the Hayward
Place parcel (currently a leased open air
parking lot), which is separated from the
development by the Avenue De Lafayette (a
public way which may very will be
discontinued and sold with the Hayward
Parcel possibly under the same formula). If
this parcel were appraised at say $25 Million,
Campeau, under the present formula would
have to pay the City only approximately $13
Million.
75.
The Garage Lease calls for a yearly rental fee
to the City of Boston/Real Property
Department of $344,000.00 However, due toa
favorable formula in this lease, the City has
not received anything to date. There is a
provision for "Deferred Basic Rental", a
mechanism purportedly by which all monies
owed, but not paid in the particular year it
accrued, would be paid to the City sometime
in the future. The City is owed approximately
$2 Million in Deferred Basic Rental.
Query: Does this sum of money fall through
the ‘cracks’ if the Garage Lease is assigned?
The Real Property Department has not been
involved in the active negotiations with
Lafayette and Campeau. If this is currently
happening, it is the BRA which is doing it. I
have been kept apprised of the negotiations as
they go along.
-76-
APPENDIX F
Orr:
ae ge, :
erate Roars
ae:
-77-
BOARD MEETING: Friday, 22 January 1988
A meeting of the Real Property Board
was duly held in Room 801, Boston City Hall,
on Friday, 22 January 1988.
The following members were present:
]. Edward Roche, Chairman
Jon A. Chilingerian
Donald A. Walsh
Also present:
Mr. Joseph P. Kelly, Real
Property Department
Mr. James E. Robbins, Real
Property Department
Attorney Steven A. Whitkin,
Real Property Department
Mr. James D. Parsons, TAMS
The meeting was called to order by
the Chairman J. Edward Roche at 9:15 a.m.,
and the minutes of the 20 November 1987
Board Meeting were approved.
The Board Members were introduced
to Mr. James d. Parsons who will be the new
Project Manager from TAMS for the Citywide
Strategic Parking Study. They expressed their
displeasure with the latest timeline submitted
by TAMS for completion of the Final Draft,
the public/private briefing sessions, the
Symposium and the Final Report. The Board
then directed Mr. James Robbins to meet with
-78-
TAMS and to work out a new Timeline for the
Study. The Chairman also impressed on Mr.
Parsons the Board's need for competent project
management in light of the recent project
management changes at TAMS. The Board
distributed to Mr. Parsons, for his review, a
copy of their November 20, 1987 Board
Minutes which contains Board comments on
the TAMS Study up to that time.
The Executive Secretary announced
the following tabulations of bids filed at the
Office of the Board for leasing the off-street
parking facility at Purchase and High Streets
and Atlantic Avenue, under the Fitzgerald
Expressway, Boston for a term of two (2) years
beginning January 1, 1988. Said proposals
were publicly opened and read aloud at the
Office of Board with Mr. Joseph Kelly and
Attorney Steven Whitkin at 10:00 a.m., on
Tuesday, December 15, 1987:
Mr. Steven Whitkin updated the
Board on the possible transfer of the retail and
garage components of the Lafayette Place
Development from Mondev to Campeau (the
company which acquired Allied Stores,
including Jordan Marsh).
The three issues directly involving this
department are the approximate $2 million in
deferred basic rental which has accrued over
the past six years, the formula in the Tripartite
Option Agreement to compute payment for
the Hayward Parcel and the yearly garage
rental of a minimum of $344,000.00.
-79-
The Board expressed its desire to
capture the $2 million owed the City (but
deferred until now); to receive the fair market
value for the Hayward Parcel (abandoning the
Tripartite formula), and to receive the basic
rental of $344,000.00 without contingency
allowing for deferment of same.
Attorney Whitkin apprised the Board
members that both the Mayor's Office of
Development and the Boston Redevelopment
Authority had been apprised of their concerns
and that these three issues were among those
that were ‘on the table’ in the negotiations
between the BRA, Mondev and Campeau.
In response to an advertisement for a
Parking and Transportation Consultant to
undertake a study to determine the feasibility
and transportation impact of developing and
underground garage on and about the present
site of the Kingston/Bedford Garage, the
following five (5) firms submitted proposals
submitted to the Real Property Department
prior to the 5:00 p.m., November 17, 1987
filing date:
URS Corporation
80 Boylston Street
Boston, MA 02116
TAMS
38 Chauncy Street
Boston, MA 02111
Vanasse Hangen Brustin, Inc.
60 Birmingham Parkway
Boston, MA 02135
LEA Group
75 Kneeland Street RICH AND
Boston, MA 02111 ASSOCIATES -
Barnes and Jarnis, Inc.
216 Tremont Street
Boston, MA 02116
A proposal evaluation process was
designed to select the best parking and
transportation consultant for this important
project.
The proposal evaluation committee
consisted of five (5) individuals. Said
committee reviewed each firm's proposal and
presented its findings to the Commissioner of
the Real Property Department and the Real
Property Board.
As a result of this process Rich And
Associates, Inc. was the recommendation of
the Committee. Attorney Whitkin also
distributed a letter detailing the scope of
services, time schedule, and fee. He also
recommended that the Board rescind its vote
of 22 May 1987 regarding this topic as being
inappropriate. After discussion, on motion
duly made and seconded, it was unanimously
VOTED: To rescind the Real
Property Board Vote
taken on 22 May 1987
regarding the hiring of a
consultant to perform a
feasibility study of the
Kingston-Bedford
-81-
development site as
follows:
It was also unanimously
That the
Chairman is
authorized to
enter into an
appropriate
agreement with
the Boston
Redevelopment
Authority for the
services of a
consultant to
perform a
feasibility study
for an
underground
parking structure
at the Kingston-
Bedford
development
parcel in an
amount not to
exceed $30,000.
The BRA will
provide $15,000
for the study
from Kingston-
Bedford garage
disposition
proceeds and the
Real Property
Board will select
and manage the
consultant's work.
| mea a aaa np nse
-82-
VOTED: To authorize the
Chairman to enter into a
contract with Rich and
Associates, Inc., 25240
Lahser Road, Southfield,
Michigan, to provide
parking and
transportation consulting
services to undertake a
study to determine the
feasibility and
transportation impact of
developing an
underground parking
garage on the Kingston-
Bedford and Essex-
Lincoln sites, in an
amount not to exceed
$60,000 to be paid out of
the Parking Facilities
Fund. The Boston
Redevelopment
Authority will partially
reimburse the Board for
the cost of this study in
an amount not less than
$15,000.
The Executive Secretary noted that
Attorney Steven A. Whitkin's contract would
expire February 23, 1988. Under terms of a
new contract Attorney Whitkin would provide
development consultant services for Lafayette
Place Phase II and the
Kingston-Bedford/ Parcel 18 parcel to parcel
linkage project in addition to being involved
with disposition and/or construction of
-83-
parking facilities in the neighborhoods and
downtown.
After discussion, on motion duly
made and seconded, it was unanimously
VOTED: To approve a contract
with Steven A. Whitkin,
778 Tremont Street,
Boston, Ma 02118 as
Development Consultant
to the Real Property
Board for one year
beginning February 24,
1988, at a salary not to
exceed Forty Eight
Thousand One Hundred
($48,100) Dollars, said
salary to be paid out of
the Parking Facilities
Fund; and to authorize
the Chairman to execute
a contract for the Board
in accordance with the
terms discussed above.
There being no further business, on
motion duly made and seconded, it was
unanimously
VOTED: To adjourn at 10:20 a.m.
ATTEST
A TRUE COPY
Richard M. Carter
Executive Secretary
Real Property Board
-85-
APPENDIX G
B6-
CAMPEAU
CORPORATION
320 Bay Street, Toronto, Ontario M5H 2P2 Telephone (416)
868-6460
December 19, 1988
Honorable Raymond Flynn
Mayor of the City of Boston
One City Hall Plaza
Boston, MA 02201
Dear Mayor Flynn:
Since our last meeting, the Presidential
election has now taken place and although
the result might have been a
disappointment to you, I feel that the
process of election of a president is so long
that I am glad it is over. I feel that Mr.
Dukakis put up a very good fight and
certainly appeared sincere in his policies
as to how he would discharge his
responsibility as president.
ROBERT CAMPEAU
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
PRESIDENT DU CONSEIL ET DIRECTEUR GENERAL
BZ.
CAMPEAU
CORPORATION
320 Bay Street, Toronto, Ontario M5H 2P2 Telephone (416)
868-6460
Our people have been seeking an
extension to close on our purchase of land
owned by the city, which is part of our
downtown project. Mr. Coyle refused to
extend the closing, but wanted to give
some kind of letter which would, in fact,
protect us on buying the land, but that
change would expose us to perhaps
paying a much higher price and could
significantly affect our economics on the
project.
My lawyers advised me today that we
have no recourse but to officially notify
the city that we wish to complete the
transaction and make payment
immediately.
I was somewhat surprised with that turn
of event, because I was under the
impression and I still am, that our people
and your officials had been making good
ROBERT CAMPEAU
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
PRESIDENT DU CONSEIL ET DIRECTEUR GENERAL
—B8-
CAMPEAU
CORPORATION
320 Bay Street, Toronto, Ontario M5H 2P2 Telephone (416)
868-6460
progress towards the final approval of this
project. I know that you want this project,
because it would clean up what is
presently an eyesore and it would further
your plans to continue to redevelop the
combat zone. The fact that we have
committed to put a Bloomingdale's on the
piece of land that we are buying from the
city certainly demonstrates our belief that
this will be a very good project in the long
run and that we also believe that the city
will continue to do everything it can to
erase the combat zone by encouraging
more redevelopment, of the area. Our
project will go a long way towards
helping that process.
I should underline, Mr. Mayor, that this
project is not black or white, but that we
have decided to take this risk and we
hope that the final outcome will be in our
ROBERT CAMPEAU
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
>.
PRESIDENT DU CONSEIL ET DIRECTEUR GENERAL
—B9-
CAMPEAU
CORPORATION
320 Bay Street, Toronto, Ontario M5H 2P2 Telephone (416)
868-6460
favor, but I want you to appreciate that
we know that we have a risk.
In order to expedite the zoning process
this Spring, I agreed with your proposal
and desire to further build more low cost
housing in the Boston area, which I
thought was very good, and we are
committed to go ahead and help you with
housing along the plans that I discussed
with you this Spring or some other
variation at your choice.
Mr. Mayor, I have great affection for the
city of Boston - I told you that before. I
feel you have done a great deal to
preserve its heritage and since we have a
big stake in the Boston area throughout
the entire state. We are anxious to make
our project a major success for the city of
Boston. I am sure you can appreciate, Mr.
Mayor, that by committing our effort at
ROBERT CAMPEAU
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
PRESIDENT DU CONSEIL ET DIRECTEUR GENERAL
-I0-
CAMPEAU
CORPORATION
320 Bay Street, Toronto, Ontario M5H 2P2 Telephone (416)
868-6460
the present time to this project and
committing Bloomingdale's to it, it must
come to a fruitful conclusion very soon
because in the meantime, there are other
opportunities which we are passing by.
I am wondering if Mr. Coyle has been
influenced by the recent article that
appeared in The Wall Street Journal,
which was extremely unfair, and totally
inaccurate.
I am enclosing herewith a copy of our 10-
K and a copy of our 10-Q, which were
approved by the Board of Directors on
December 11. The numbers speak for
themselves. We have completed the sale
of our assets at the price that we set out to
do and not as reported in the Journal.
You will notice that the numbers reflect a
much more substantial profit than last
year, even thought we had flat sales and
ROBERT CAMPEAU
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
PRESIDENT DU CONSEIL ET DIRECTEUR GENERAL
-OT-
CAMPEAU
CORPORATION
320 Bay Street, Toronto, Ontario M5H 2P2 Telephone (416)
868-6460
were feeling the effects of having gone
through a major takeover.
We expect the company to perform well
next year for two reasons: In 1988, sales
were projected to increase by 5-6%, the
reason the projections were not met was
because of the takeover disruption and
steamlining. By the middle of the
summer, we were quite under water.
Since September we have come up very
fast and we hope to finish slightly ahead
of flat sales by December. Also, our
streamlining is now complete, and annual
savings should exceed $300 million per
year.
The Journal reported also that we had a
$10 billion debt. Wrong again, the debt in
Campeau Canada is approximately $1.5
billion, and the debt in Federated/ Allied
about $6 billion. I should point out,
ROBERT CAMPEAU
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
PRESIDENT DU CONSEIL ET DIRECTEUR GENERAL
~97-
CAMPEAU
CORPORATION
320 Bay Street, Toronto, Ontario M5H 2P2 Telephone (416)
868-6460
however, that the retail operations in the
United States are on a stand alone basis.
Campeau is a real estate development
corporation which has done many large
Projects and we have just completed one
of the most major office towers in Toronto,
of 2.5 million square feet. I have extended
an invitation to you to visit some of my
projects and hope we will still have the
Opportunity to visit with you in Canada
and the United States.
I want to confirm again to you, Mr.
Mayor, that we are committed to this
project. We hope that the zoning can be
completed by mid 1989 to allow
construction to start. I want to take this
Opportunity to wish you and your family
a Merry Christmas and Happy New Year.
/sm
Attachments
ROBERT CAMPEAU
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
PRESIDENT DU CONSEIL ET DIRECTEUR GENERAL
-93-
APPENDIX H
December 30, 1988
Mr. Robert Campeau
Chairman and Chief Executive Officer
Campeau Corporation
320 Bay Street
Toronto, Ontario
Dear Mr. Campeau:
On behalf of the City and in response to
your letter to Mayor Flynn, I would like to
reconfirm our intent to work with your
organization on the Boston Crossing
project. The Campeau Corporation is to
be commended for its development
concept and for its retail plan for the area.
As part of the Midtown Cultural District,
the project will not only benefit from the
district's economic potential, but could be
an integral part of its renaissance.
Although the project is generally well
conceived, several issues need to be
worked out as part of the normal
development review process. Of
particular concern are the proposed height
of the Hayward Place office tower and the
size and massing of the Summer Street
component... Recent discussions with Len
McQuarrie have been very helpful in our
effort to resolve these concerns. I know
you understand our desire for a project
-95-
that Boston and the Campeau Corporation
can look to with pride.
Regarding your stited concern over the
price of the Hayward Place parcel, once
the development review process is
complete, the City's parcel can be sold for
its fair reuse value, determined through
appraisal, using all relevant factors,
including existing zoning as well as
constraints on the overall development site
as a guide. Such a sale is subject to the
approvals of the Real Property Board, the
City Council, and the Mayor.
By their own terms, prior agreements on
Hayward Place will expire on January 1,
1989. This event does not in our judgment
alter our willingness to work with you
and your representatives to develop the
Boston Crossing project. It simply puts
the question of the disposition of Hayward
Place in a current context.
It is anticipated that the development
review process and Land Disposition
Agreement negotiations can be completed
in the coming year. With your continued
cooperation, we believe we can work out
the terms necessary for the Campeau
Corporation to go forward with the Boston
Crossing project.
The project is exciting and can be very
beneficial for Boston and accordingly will
N-
be given careful attention and assistance.
Given the considerable work to date, it
would be unfortunate for your project not
to go forward. You have our commitment
to work collaboratively on the Boston
Crossing project and the Midtown
Cultural District Plan.
Sincerely,
Stephen Coyle
cc: Mr. John P. Boorn
Mr. Lenard McQuarrie
-97-
APPENDIX I
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TRIPARITE AGREEMENT
AMONG
CITY OF BOSTON
BOSTON REDEVELOPMENT
AUTHORITY
AND
LAFAYETTE PLACE ASSOCIATES
dated
December 22, 1978
CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Se ha. on tt ee
Section 1.02 Air Rights Deed and
|
Section 1.03 Alstores Realty
eS a
Section 1.04 City-BRA Agreement .. .
Section 1.05 Cimpter 121A.........
Section 1.06 ee ae
Section 1.07 2 ee a a
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Section 1.08 Design Review Process .
Section 1.09 Development Program . .
Section 1.10 Hayward Place Garage .
Section 1.11 Institutional Lender ....
Section 1.12 Jordan Marsh Facility
Section 1.13 Maintenance and
Easement Agreement .. .
Section 1.14 Master Schedule ......
Section 1.15 Mortgagee ...........
Section 1.16 Parking Garage .......
Section 1.17 Passageway ..........
Section 1.18 PE Oa Pel ettbice sus
Section 1.19 3... BRC are
Section 1.20 PUGS POI tc cvseve
Section 1.21 Project Rights ........
Section 1.22 Public Improvements .. .
Section 1.23 Public Utilities ........
Section 1.24 Sale and Construction
pv Peer eee e
ection 1.25 Substantial Completion .
Section 1.26 SOU PE see css
ARTICLE I
LAND ASSEMBLY
Section 2.01 Land Acquisition ......
ARTICLE Il
PRE-C N ING
DATE; AIR N
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Section 3.01 Pre-Closing Activities
Section 3.02 Closing Date .........
Section 3.03 Ran eer
Section 3.04 Air Rights Disposition . .
RTICLE IV
DEVELOPER'S IMPROVEMENTS
Section 4.01 Development Program . .
Section 4.02 ok ae
Section 4.03 Design Review Process .
Section 4.04 Development .........
Section 4.05 Diligent Prosecution
Section 4.06 Certificate(s) of
Compeeion ..........
Section 4.07 Local Employment .... .
Section 4.08 Staging Area .........
ARTICLE V
PUBLIC IMPROVEMENTS
Section 5.01
Section 5.02
Section 5.03
Section 5.04
Section 5.05
Section 5.06
Program for Public
Improvements ........
Environmental Approvals
Cost of Parking Garage .
Design of Certain Public
Improvements
Construction .........
Operation and
Maintenance of Parking
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Garage and Hayward
TINGE CSOT 5 i
Section 5.07 Plaza, Malls and
Circulation System .....
Section 5.08 Parking Garage Budget;
Plaza Malls and
Circulation System Budget
Section 5.09 Maintenance of Other
Public Improvements . . .
ARTICLE VI
PARCELS D-1, D-2, D-3 AND D-4;
PARCEL E
Section 6.01 Demolition of Hayward
Place Garage .........
Section 6.02 Right to Acquire Parcels
D-1, D-2, D-3 and D-4 ..
Section 6.03 Right to Acquire Parcel E
ARTICLE Vil
CONSTRUCTION STANDARDS;
INSURANCE
Section 7.01 Construction Standards .
Section 7.02 Insurance During
Curries Se kk
ARTICLE VII
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ZONING A D USE
Section 8.01 Zoning and Land Use of
hee es. eee
Section 8.02 Zoning of Adjacent
ME See i sc ci.
ARTICLE Ix
ASSIGNMENT
Section 9.01 Selection of Developer . .
Section 9.02 Prohibited Transfers
Section 9.03 Permitted Transfers ... .
Section 9.04 Authority's Consent ... .
Section 9.05 Excepted Transfers
ARTICLE X
Section 10.01 A OE SR ae
ARTICLE XI
DEFAULT
Section 11.01 Event of Default ......
Section 11.02 Default by the Developer
Section 11.03 _ Rights of Mortgagees .. .
Section 11.04 Authority's Right to
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Section 11.05 Default by the City or the
rere eres
ARTICLE Xil
CONDITIONS TO DEVELOPER'S
OBLIGATIONS
Section 12.02 Conditions to Developer's
tee ee eee
Section 12.03 Termination for Failure of
ee
ARTICLE Xiil
FAIR MARKET VALUE
Section 13.01 Fair Market Value .....
ARTICLE XIV
SALE D CONSTRUCTION
AGREEMENT
Section 14.01 Coordination with
BO ee eee
ARTICLE XV
MISCELLANEOUS
Section 15.01 Governing Law .......
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Section 15.02 Captions and Headings .
Section 15.03 Consents and Approvals
Section 15.04 No Waiver...........
Section 15.05 Alternatives to Sale of Air
WE Sh Stee es a
Section 15.06 Notices .............
Section 15.07. Force Majeur .........
Section 15.08 Invalidity of Provisions .
Section 15.09 Rights of Others ......
Section 15.10 Survival of Obligations .
Section 15.11 Time of Essence .......
Section 15.12 Duration of Plan ......
Section 15.13 Real Estate Taxes ......
Section 15.14 Supplemental Documents
Section 15.15 Superseding Effect .... .
Section 15.16 Speedy Trial .........
Section 15.17 Operating Covenant... .
EXHIBITS
A Site Plan
B Cooperation Agreement
Master Schedule
D Development Program
E Design Review Process
F New Essex Street Layout and Other
Street Improvements
New Essex Street and Bedford
Street Improvements
Construction Manager Terms
Bedford West Urban Renewal Plan
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TRIPARTITE AGREEMENT
AGREEMENT made as of this 22nd
day of December, 1978 by and among the
CITY OF BOSTON, a municipal
corporation ("City"), acting by and through
its Mayor and its Real Property Board, the
BOSTON REDEVELOPMENT
AUTHORITY, a public body politic and
corporate organized under the laws of the
Commonwealth of Massachusetts
("Authority"), and LAFAYETTE PLACE
ASSOCIATES, a general partnership (the
"Developer") whose partners are Mondev
Mass., Inc., a Massachusetts corporation,
and Sefrius Corp., a Delaware corporation.
WITNESSETH:
WHEREAS, with the assistance of
the federal, state and city governments,
the Authority is carrying out the Bedford
West Urban Renewal Project pursuant to
the Bedford West Urban Renewal Plan
approved by the Authority on February 8,
1973, by the Boston City Council on April
23, 1973, by the Mayor of Boston on April
30, 1973, by the Massachusetts Department
of Community Affairs on May 23, 1973, as
amended by proclaimer dated May 2,
1974, and recorded at Suffolk County
Registry of Deeds, Book 8777, Page 650;
WHEREAS, the City, the Authority
and Developer desire to carry out the
-106-
proposed development sometimes known
as Lafayette Place;
WHEREAS, the aspects of the
Project will be located in air rights within,
above and contiguous to three parcels of
land (Parcels A, B and C) and portions of
certain streets to be discontinued, all of
which parcels and streets are to be
acquired by the City and are shown on the
plan annexed hereto and marked Exhibit
A;
WHEREAS, incident to the Project
the City will enter into arrangements for
the acquisition of five additional parcels of
land and improvements thereon and the
discontinuance and acquisition of streets
adjacent thereto, which parcels are
designated Parcels D-1, D-2, D-3, D-4 and
E which parcels and streets are shown on
Exhibit A;
WHEREAS, the Bedford West
Urban Renewal Project is a part of the
Project;
WHEREAS, the City and the
Authority have entered into the
Cooperation Agreement annexed hereto
and marked Exhibit B and pursuant to
which the City and the Authority have
agreed to take certain actions in
furtherance of the Bedford West Urban
Renewal Project;
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WHEREAS, certain public
improvements are to be constructed by
the City and the Authority incident to the
Project;
WHEREAS, the City and the
Authority have determined that the Project
and the aforesaid public improvements are
in the best interests of the City and the
public good and welfare;
WHEREAS, the City, acting by and
through its Real Property Board, has
determined that the Parking Garage to be
undertaken by its pursuant to this
Agreement and its relationship to the
Project is reasonable and in furtherance of
Chapter 474 of the Acts of 1946, as
amended, and special acts supplementing
the power of the Real Property Board
under said Chapter 474, as amended;
WHEREAS, the City, acting by and
through its Real Property Board, has
determined that said Parcels A, B, C, D-1,
D-2, D-3 and D-4 and Parcel E (as shown
on Exhibit A), are appropriate for parking
facilities but that such portions of such
Parcels as are not devoted to parking
facilities and facilities in support thereof
constitute surplus air-space unnecessary or
inappropriate for parking facilities above,
within or contiguous to the parking
facilities to be constructed pursuant to this
Agreement;
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WHEREAS, the Developer intends
to form a partnership under Chapter 121A
of the General Laws and Chapter 652 of
the Acts of 1960, as amended, and to
undertake certain of the non-public
portions of the Project in accordance
therewith, thereby serving public uses by
eliminating decadent and substandard
areas, providing increased employment
opportunities for the citizens of the City, OO
stabilizing land values in the area, and
assuring the City of needed revenue;
WHEREAS, the Developer and the
City have determined that the benefit of
the combined public and private
development could not be achieved by
private enterprise alone without the aid
provided by Chapter 121A of the General
Laws and Chapter 652 of the Acts of 1960,
as amended;
WHEREAS, Alstores Realty
Corporation has constructed and
reconstructed certain buildings, all of
which together comprise the department
store operated under the name of Jordan
Marsh and all of which are to be
physically and operationally integrated
with the Project;
WHEREAS, the Developer and the
City have entered into this Agreement and
other documents providing for such
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integration of the Project and such
department store; and
WHEREAS, the City, the Authority
and Developer are entering into this
Agreement in reliance upon the
performance of their various obligations
hereunder and the construction by each of
them of certain improvements as a part of
and incident to the Project.
NOW, THEREFORE, in
consideration of the mutual promises
herein contained and for other good and
valuable consideration, the receipt and
sufficiency of which are hereby
acknowledged, the parties hereto agree as
follows:
Section 6.02. Right to Acquire
Parcels D-1, D-2, D-3 and D4. In the
event that the City shall determine to
discontinue the Hayward Place Garage,
the Developer and its successors and
affiliates (as defined in Section 9.03. j)
hereof) are hereby given the sole and
exclusive right and option on the terms
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herein set forth to acquire the
unencumbered title to the interest of the
City (except that such title shall revert to
the City one hundred (100) years and one
(1) day from the date of recording of the
deed thereof) in parcels D-1, D-2, D-3 and
D-4 or, if a subsurface parking facility
shall be constructed thereunder, in the air
rights over parcels D-1, D-2, D-3 and D-4
and New Essex Street (but only between
Harrison Avenue Extension and
Washington Street as shown on Exhibit A)
and such rights appurtenant thereto as are
necessary to make the air rights
commercially viable. No sale, transfer or
other disposition of any such rights shall
be made by the City until three (3) years
from the date on which the City has
finally determined in accordance with law
that the Hayward Place Garage is to be
discontinued in operation and has given
notice to the Developer of such
determination and of the extent, if any, to
which the City has determined and agrees
to create subsurface parking beyond that
to which it is obligated hereunder. If
within such period (the "Option Period")
the Developer shall notify the City that it
desires to purchase the rights hereby made
available to it then the City shall sell the
same (without air rights over New Essex
Street, if the Developer shall so elect) to
the Developer, its successors or its
affiliates.
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The City has obtained appraisals
which it has determined are acceptable to
it and which set forth the current fair
market values of Parcels D-1 and D-2 and
shall forthwith after the date of this
Agreement obtain likewise acceptable
appraisals for the current fair market
values of Parcels D-3, D-4 and relevant
interests in New Essex Street. Forthwith
after the same are available, the City shall
give copies of such appraisals to the
Developer. The purchase price to be paid
hereunder shall, if subsurface rights are
not retained by the City, be the fair market
values shown by such appraisals plus one-
half (1/2) of the increase, if any, in such
values as the result of construction of the
Public Improvements and the Project. The
purchase price to be paid hereunder shall,
if subsurface rights are retained by the
City, be one-half (1/2) of the fair market
values shown by such appraisals plus one-
half (1/2) of the increase, if any, in such
values as the result of construction of the
Public Improvements and the Project. The
existence and amount of increase in fair
market values attributable to the
construction of the Public Improvements
and the Project shall be determined by
independent appraisal.
As aforesaid, the Developer may
exercise the right and option set forth in
this Section 6.02 by giving notice of its
desire to purchase such rights to the City
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at any time within the Option Period.
After the receipt of and following such
notice from the Developer, the parties
shall in good faith negotiate and enter into
an agreement calling for the purchase ‘and
sale of the rights in question. Such
agreement shall be in the customary form
of agreements for the purchase and sale of
real estate in the greater Boston area
except that the agreement shall reflect such
reservation and shall contain other
appropriate provisions with respect to the
integration of construction and other
matters relevant to coordinated use of the
rights conveyed and the rights retained by
the City. Any such purchase and sale
agreement may provide for a closing date
extending up to six (6) months after the
end of the Option Period and the
expiration of the Option Period in any
event shall not affect the rights of the
Developer to proceed with an acquisition
if notice of the exercise of such rights has
been given prior to the expiration thereof,
provided that, the Developer shall lose its
rights hereunder to proceed with an
acquisition if, because of a failure of the
Developer to work in good faith to
conclude a purchase and sale agreement
or to perform thereunder, a closing has
not occurred within six (6) months after
the end of the Option Period, unless the
City and the Developer shall agree to a
further extension. Notwithstanding the
foregoing, in all cases the Developer's
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rights hereunder shall extend for such
period of time as may be necessary for the
City to substantially complete construction
of any subsurface parking facilities for
which the City is or may become obligated
hereunder.
Prior to the construction of any _
additional subsurface parking facilities on”
Parcels D-1, D-2, D-3 or D-4 and prior to °
disposition of such rights to the
Developer, its successors or affiliates, the
City may use the surface of the land for
parking so long as the same is operated
and maintained to the highest standards
and in keeping with the character of the
Project. A conveyance under this Section
6.02 to the City which results in a
reduction in the number of parking spaces
in the Project Area shall not render the
City in default under this Agreement.
Section 6.03. Rights to Acquire
Parcel E. The City agrees to demolish the
garage known as the Lincoln-Essex
Parking Garage and designated on Exhibit
A. Such demolition shall commence no
later than the date on which the Parking
Garage shall be available for occupancy
and demolition shall be expeditiously
completed once started. Pursuant to
understandings that the City has orally
reached (and hereby agrees to exercise
best efforts to confirm in writing) with
Boston Edison Company, it is expected
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that the City shall acquire from Boston
Edison Company Parcel E and the air
rights over the adjacent, existing
substation in exchange for the
unencumbered fee simple absolute interest
in the parcel of real estate from which the
Lincoln-Essex Parking Garage will have
been cleared. Such exchange shall occur
as soon as possible after the completion of
demolition of the Lincoln-Essex Parking
Garage.
The Developer and its successors
and affiliates are hereby given the sole and
exclusive right and option to acquire
unencumbered fee simple absolute of the
City in Parcel E and such air rights over
said substation (less areas retained by the
City for street purposes) for a period
which degins on the date hereof and ends
on the last to occur of five (5) years from
the date on which the City shall satisfy its
obligations to acquire title to Parcel E and
such air rights over said substation or
twelve (12) months from the date of
issuance of all certificates of completion
permitted under Section 4.06 hereof.
However, if the City shall determine and
agree to construct subsurface parking
under Parcel E the acquisition right and
option shall be limited to a right and
option to purchase the air rights above
Parcel E and such subsurface parking and
Over said substation and such rights
appurtenant thereto as are necessary or
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appropriate to make the air rights
commercially viable.
The City shall within thirty (30)
days after the date on which the City
Council shall approve this Agreement
cause an appraisal to be made of the fair
market value of Parcel E (less any areas
proposed to be retained for future street
purposes) and such air rights over said
substation as of such date. The purchase
price to be paid hereunder shall, if
subsurface rights are not retained by the
City, be the fair market value shown by
such appraisal plus one-half (1/2) of the
increase, if any, in such value as the result
of construction of the Public
Improvements and the Project. The
purchase price to be paid hereunder shall,
if subsurface rights are retained by the
City, be one-half (1/2) of the fair market
value shown by such appraisal plus one-
half (1/2) of the increase, if any, in such
value as the result of construction of the
Public Improvements and the Project. The
existence and amount of increase in fair
market value attributable to the
construction of the Public Improvements
and the Project shall be determined by
independent appraisal.
The Developer's (or its successors’
or affiliates’) exercise of the right and
option set forth in this Section 6.03 shall be
undertaken with the benefit of all time
’.
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periods and in the same manner as it is
entitled to exercise the right and option
provided under Section 6.02, above. If
under either of such Sections the City has
determined and agreed to construct
subsurface parking facilities then the City
shall forthwith thereafter perform such
construction in order that the acquisition
rights of the Developer (or its successors
or affiliates) hereunder may be availed of
on a timely basis.
ARTICLE Xiil
F T VAL
Section 13.01. Fair Market Value.
The term "Fair Market Value" as used in
this Agreement means the price, as of the
Notice Date, which a seller, willing but not
obligated to sell, would accept for the
Project Rights, and which a buyer, willing
but not obligated to buy, would pay
therefor in an arms’ length transaction.
Fair Market Value shall be determined in
accordance with the following procedure.
Either party may give written notice
to the other party and in such notice shall
designate the first appraiser (the "First
Appraiser"). Within fifteen (15) days after
the service of such notice, the other party
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shall give written notice to the party
giving the first notice, which notice shall
designate the second appraiser (the
"Second Appraiser"). If the Second
Appraiser is not so designated with or by
the time above specified, then the party
designating the First Appraiser may
request appointment of the Second
Appraiser by the Chief Judge of the
United States District Court for the District
of Massachusetts or any successor federal
court of original jurisdiction but if such
Chief Judge shall not act then appointment
may be requested of the President of the
Boston Bar Association. The First and
Second Appraisers so designated or
appointed shall appoint a third appraiser
(the "Third Appraiser") and if they shall be
unable to agree upon such appointment
within ten (10) days after the time
aforesaid, the Third Appraiser shall be
selected by the parties themselves, if they
can agree thereon within a further period
of fifteen (15) days. If the parties do not
so agree, then either party, on behalf of
both, may request that such appointment
be made by the Chief Judge of the United
States District Court for the District of
Massachusetts or any successor federal
court of original jurisdiction. In the event
of the failure, refusal or inability of any
appraiser to act, a new appraiser shall be
appointed in his stead, which appointment
shall be made in the same manner as
hereinbefore provided for the appointment
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of such appraiser so failing, refusing or
being unable to act. Each party shall pay
the fees and expenses of the appraiser
appointed by such party, or in whose
stead, as above provided, such appraiser
was appointed, and the fees and expenses
of the Third Appraiser, and all other
expenses, if any, shall be borne equally by
both parties. Any appraiser designated to
serve as above provided, shall be
disinterested, and shall be familiar with
property values in metropolitan Boston,
Massachusetts. The appraisers shall
determined the Fair Market Value of the
Project Rights. A decision joined in by
two of the three appraisers shall be the
decision of all the appraisers. After
reaching a decision, the appraisers shall
give written notice thereof to the parties
hereto which notice shall in reasonable
detail state the Fair Market Value so
determined and the factors considered by
the appraisers in making such
determination, and the Fair Market Value
so stated shall be considered Fair Market
Value for the purposes of this Agreement
and shall be final and binding upon such
parties. If the appraisers shall fail to reach
a decision within ninety (90) days (or such
further time as may reasonably be
requested by either party and approved by
the other) after the appointment of the
third appraiser, either party may make
application to any court of competent
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jurisdiction for a determination by such
court of Fair Market Value.
IN WITNESS WHEREOF, the
parties hereto have hereunto set their
hands and seals as of the day and year
first above written.
APPROVED AS TO FORM:
\s\ illegible
Corporation Counsel
City of Boston
CITY OF BOSTON
By \s\ Kevin H. White
Kevin H. White
Mayor
APPROVED AS TO FORM:
\s\ illegible
General Counsel
Boston Redevelopment Authority
-120-
CITY OF BOSTON
By: Real Property Board
By \s\ Joanne A. Prevost
Joanne A. Prevost
Commissioner of Real
Property Board
Chairman of Real
Property Board
WITNESS:
\s\ illegible
BOSTON REDEVELOPMENT
AUTHORITY
By \s\ illegible
Director
WITNESS:
\s\ illegible
-121-
LAFAYETTE PLACE ASSOCIATES
By: Mondev Mass., Inc.
general partner
By \s\ illegible
Its Vice President
WITNESS:
\s\ illegible
By: Sefrius Corp.
general partner
By \s\ illegible
Its President
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.