Ruling calls developers' projects into question
Court faults state's stand on public's access to filled lands
By Thomas C. Palmer Jr., Globe Staff | May 29, 2007
When the state's highest court ruled in February that developers of a huge mixed-use project in East Cambridge near the Charles River might have to provide more public accommodations, such as a pedestrian tunnel under a busy street, the justices declared there were no broader implications.
That turned out not to be true.
Instead, the decision has thrown into question the legitimacy of scores of buildings and future projects on 3,000 acres in Cambridge and Boston alone. If the question is left unresolved, state permits for existing buildings could be invalid, and agreements between developers and the state for future projects would have to be renegotiated or scrapped.
The court decision concerned a complex case involving owners' rights on tidal lands that have been filled to allow development. The Supreme Judicial Court said state environmental officials did not have the power to exempt the NorthPoint development from provisions of a stringent state law, called Chapter 91, which provides for public access to property near waterways.
Local residents wanted NorthPoint to be required under Chapter 91 to provide some accommodations and amenities, such as possibly a tunnel.
"There's an awful lot in the decision that's questionable," said David I. Begelfer, chief executive of the National Association of Industrial and Office Properties' local chapter. "With the land filled in over the last 300 years, some of this is a quarter of a mile from the water -- clearly no longer under the intent of the law."
The SJC later acknowledged its ruling could affect many other properties in tidelands, but delayed the effect of its decision until late summer, in effect inviting the Legislature to fix the problem.
Developers and property owners are now waiting anxiously to see how the matter will be resolved. Governor Deval Patrick, for example, proposed a legislative fix months ago, but it has not been adopted.
Corcoran Jennison Cos. is nearly ready to start on the second phase of its Peninsula apartments on filled land near the Dorchester waterfront. The company has locked in many prices for labor and materials, contracts that will expire over the coming months. If the legal status of Peninsula's permits isn't secure by the time the price guarantees expire, then the project's largest investor may have second thoughts about providing financing, because of potentially higher costs. And that could put the entire 132-unit building in jeopardy.
"The investor is getting nervous, given the SJC decision," said John Mostyn, a lawyer for Corcoran Jennison.
Property right on the water isn't at issue -- anything on the harbor or along rivers is unquestionably subject to the public access requirements of Chapter 91.
Instead, it is those properties on filled tidelands that are set back some distance from the waterfront, such as NorthPoint, that are now in question.
The state adopted regulations in 1990 that gave officials authority to exempt these properties from Chapter 91. But the court ruled the state did not have the right to enact the 1990 exemptions.
"Most people would agree there's a strong value in protecting public access to the waterfront," said Matthew J. Kiefer, a director at the law firm Goulston & Storrs PC. "But it's hard to find a public interest in using Chapter 91 to regulate property that has no meaningful connection to the waterfront today."
The implications of the SJC decision were so broad that Patrick immediately proposed legislation that would validate the permits of the properties in question. But some legislators objected, saying the governor's bill would also allow developers of future projects to disregard public requests for access and accommodation.
In a letter to legislators, the law firm Marsh, Moriarty, Ontell & Golder PC of Boston, which does title work, wrote, "We cannot be certain that lenders will continue to finance acquisition loans or construction loans" if the issue is not resolved.
For now, the firm is telling affected property owners they may be subject to the potentially expensive provisions of waterways protection.
Many prominent properties are affected, such 75 State St. and One Post Office Square in downtown Boston, as well as projects now in construction, such as the Mandarin Oriental hotel at the Prudential Center and the 23-acre Seaport Square in South Boston. They could be required to make expensive public accommodations that no one contemplated, lawyers said.
"Large sections of many of our coastal cities require legislation that provides clarity for existing investments," said R.J. Lyman, a partner at the law firm Goodwin Procter, and for "long-term plans that are extraordinarily important to the agenda of the Commonwealth."
As currently written, a separate bill in the Legislature's Joint Committee on the Environment would clear up the status of current tidelands projects and subject future ones to a different state oversight, the Massachusetts Environmental Policy Act, which industry executives said would still add too much lengthy review time to developments.
Representative Frank Smizik, a Brookline Democrat who cochairs the committee, said the current draft would not give the residents in the NorthPoint case the Chapter 91 requirements that they sought, but is a compromise that could expand public access in the future.
The watchdog Boston Harbor Association favors legislation, like that filed by Patrick, that would simply restore the situation to where it was before the NorthPoint ruling.
Changing the law in any other way risks giving the development community an opportunity to weaken existing waterfront protections, said Vivien Li, executive director of the association.
"Taking up other issues will open up a very, very large can of worms that will take years to resolve," she said.
Thomas C. Palmer Jr. can be reached at
tpalmer@globe.com.
? Copyright 2007 Globe Newspaper Company.
