Business

Shirley Leung

On Fort Point property, a classic standoff between bureaucracies

A view of Boston's main Post Office from the Boston Fort Point Channel Bridge.
Jonathan Wiggs/Globe Staff
A view of Boston's main Post Office from the Boston Fort Point Channel Bridge.

Rain or snow, the Postal Service always delivers. But not this time.

The state wants to take over the post office’s Fort Point Channel property to make way for a $1 billion expansion of South Station, which sits next door. The federal agency won’t budge, saying the state isn’t offering a rich enough deal for a site in one of the country’s hottest neighborhoods.

How far apart are they? Try $100 million.

Advertisement

The two sides have been talking on and off for a decade — you read that right, more than 10 years. Of late, negotiations have intensified, reaching the highest level of the agency with a meeting involving Postmaster General Patrick Donahoe, US Representative Stephen Lynch, the state’s transportation secretary, Rich Davey, and Massport chief Tom Glynn.

Get Talking Points in your inbox:
An afternoon recap of the day’s most important business news, delivered weekdays.
Thank you for signing up! Sign up for more newsletters here

It’s become a classic standoff between two bureaucracies, turning political gridlock into real gridlock, with the losers being all of us stuck waiting on a train platform. What hangs in the balance is more convenience and less stress for thousands of travelers daily. An expanded South Station would usher in a new era of public transit in Massachusetts. Imagine: more commuter rail, more Acelas, even true high-speed trains.

“We have offered so many solutions to the problem,” said Davey. “The time is now to make this happen. All the interests are aligned. At the end of the day, we’re all trying to serve the people of Massachusetts.”

The state is fast losing patience, fearing the Postal Service is trying to run out the clock on the Patrick administration.

Davey has offered to build the post office a new processing facility a mile away in the Seaport District, close to Logan Airport and with easy access to interstates 90 and 93. To sweeten the deal, he threw in a 1,000-car garage for postal workers.

Advertisement

When that didn’t work, he came back with a new proposal, thinking cash must be king to an agency that has lost $46 billion in recent years. The Postal Service, if you can believe it, said “No thank you” to $350 million. Who knew the Commonwealth had this much money just lying around?

David L. Ryan/Globe Staff
The Postal Service’s massive facility on Fort Point Channel would be demolished to make way for the expansion of South Station if the state gets its way.

“On a scale of 1 to 10, this is an 8 in the mystery department in why we haven’t been able to work this out,” Glynn said. “They are under a lot of pressure to reduce their losses.”

Glynn is involved because a deal to move the post office would be as complicated as a three-team trade in the NBA. The state would get the post office property, while the post office would move to a site primarily owned by Massport on E Street just off Summer Street. Massport, which runs the airport and port, would get a chunk of postal-owned property on A Street that’s now an employee parking lot.

The official word from the Postal Service is that it’s off-loading a lot of property to boost the bottom line, but the South Boston site isn’t one of the parcels up for sale. Wow, hardball. Not the Cliff Clavin we remember in “Cheers.”

What happened is the Postal Service signed an agreement with the state in 2011 to negotiate a sale, but that pact has expired. The agency, in a statement Thursday, said it realizes the importance of getting a deal done and “has spent millions of its limited funds to move this project forward.”

Advertisement

Postal officials believe the new proposal is a bad one, saying “assumptions of value used by [the state] do not comport with the Postal Service’s required accounting practices.”

‘We have offered so many solutions to the problem. The time is now to make this happen.’

Richard A. Davey, secretary of transportation 

Let me translate: We’re desperate, but not that desperate.

The sticking point is over the value of the A Street parcel, a portion of which would be given to Massport in a land swap. The Postal Service, according to the state, pegs the price at about $170 million. Its assessed value is $58 million.

The Postal Service said it prefers the terms of the expired agreement. When I told that to the state, Davey, the transportation secretary, got back on the phone with me and said he’ll gladly honor those terms. What he doesn’t want is for the state to buy the Postal Service’s old house and build it a new one.

“We want to fairly compensate them, but not at all costs,” he said.

Now leave it to Congressman Lynch, fresh from grilling Secret Service chief Julia Pierson — who resigned this week under pressure — to try to get both sides to yes. The South Boston Democrat is the ranking member on the Postal Service subcommittee and is playing the unusual role of peace broker. He was the one who hosted a meeting last month at his Washington office with Postmaster Donahoe and state officials.

Lynch doesn’t think the two sides are that far apart, explaining there’s a lot of posturing going on. That’s what happens in negotiations, something he knows a lot about, having been head of the local ironworkers union more than two decades ago.

“I am trying to get people to a good place,” Lynch assured me Thursday. “We are at the five-yard line.”

He can understand why the Postal Service wants the most lucrative deal possible — it’s hemorrhaging money and is under the close watch of the Postal Service’s inspector general. Lynch has gone as far to suggest the inspector general take a seat at the negotiating table and preapprove any deal.

While Lynch can appreciate that the post office needs to shore up its finances, he doesn’t want that to happen at the expense of the Commonwealth.

“This is different,” he said. “This is a government-to-
government transaction.”

C’mon everybody, let’s make a deal. Snail mail shouldn’t be holding up our high-speed future.

Shirley Leung is a Globe columnist. She can be reached at shirley.leung@globe.com. Follow her on Twitter @leung.