To the editor:
On Monday, City Council will vote on a Black Cow lease. We do not oppose redevelopment of the waterfront, but this lease is a bad deal for Beverly.
The proposed rent is only $30,000 a year, or $2,500 a month, which is less than a third of what the Green Papaya restaurant on Cabot Street is paying. For a prime one-acre parcel the city invested more than $4 million in! Since the original bid was accepted, the mayor has thrown in a number of “freebies” for the Black Cow, including a free liquor license, worth roughly $80,000. The restaurant is 50 percent (2,200 feet) larger than the one in the bid and the lease permits the Black Cow to sublease 2,010 square feet. This could pay for the entire $30,000 per year. Further, the lease obligates Beverly to provide, for 40 years, a dedicated on-site security person during summer months. This will likely be detail work, at overtime rates at a cost of more than $15,000 per year. Where else does Beverly pay for a dedicated security person for a private business? The lease is for the entire parcel, but the Black Cow is taxed only on far less than half of the property. The mayor says this lease will generate more than $100,000, but he is including revenue from parking meters and tickets, which the city could get anyway, and not including the expenses of meters, security person, etc.?
The city can do so much better. One of my customers owns Dunkin’ Donuts shops. He called the proposed Black Cow rent “laughable” and said he pays $225,000 a year rent for some of his stores. The city claims that we should be lucky to have the Black Cow since they were the only bidder on the request for proposal. However, the request for proposal was issued seven years ago, before the city invested $2 million in the site, threw in a liquor license, increased the size by 50 percent, provided lease-free space, free security, vehicle access over Ferryway Landing, etc. The property is much more attractive today.
The lease is a legal minefield. Public bidding laws (Ch 30B) require an appraisal prior to signing a lease, which has not been done. The laws also prohibit the city from improving the terms after the bid has been accepted, such as by investing $2 million in the property, throwing in a free liquor license, the security guard and vehicular access across Ferryway Landing. In addition, the lease violates Article 97 of the Massachusetts Constitution, which requires approval by two-thirds vote of the state Legislature for any disposition, including a lease, of this property. No such legislative approval has been obtained. If the city can’t deliver on the promises in the lease, the Black Cow can sue the city. This will be the golf course all over again.
The way forward is clear: Wait for the Appeals Court decision in January and if necessary, modify the DPA. Get permission for access across Ferryway Landing. Address the parking and traffic concerns of the neighborhood and adjust the plan if required. Eliminate the dedicated security guard. Do a study of comparable rents as required by law. Rebid the restaurant as fully permitted, including a liquor license, including the $2 million in improvements, etc. There is no doubt that the city will get bids three or four times higher than the one in the lease.
Why is Mayor Bill Scanlon pressing so hard to rush this through before the new mayor and City Council take their seats? The only thing a quick signing does is create legal rights for the Black Cow to sue the city. We urge the council to take no action on this lease until the new mayor and council are seated.
Editor’s note: Frank and Suzanne Kinzie own the Beverly Port Marina next door to the waterfront property in question. Their appeal of the project is currently before the state Appeals Court.