TWO RECENT, damning audits of the Boston Redevelopment Authority are blots on the legacy of former mayor Tom Menino. During Menino’s tenure, an audit by the firm KPMG found, the agency in charge of building projects in Boston failed at some of its most basic tasks, including collecting rent and making sure that real estate developers lived up to agreements. The city has been shortchanged by millions of dollars, according to the audit. A separate, independent audit by Daniel Dennis & Co. has revealed that the small-business lending division of the BRA disregarded hundreds of thousands of dollars of outstanding loans. It’s nothing short of an embarrassment.
Mayor Walsh, who ordered the inquiries, won the election last year in part because he tapped into widespread public frustration with Menino’s BRA. Many residents viewed that agency as too arrogant, too cozy with developers, and too unresponsive to community concerns. The audits reveal an even deeper problem — a woeful lack of oversight of financial agreements with third parties. The quasi-public agency in charge of opening the door for new businesses slipped into deplorable business practices, including a lack of coordination among its affiliates and sloppy risk-management procedures.
The KPMG audit didn’t delve into the specific policy issues that tend to animate BRA critics, like building heights, but its findings will certainly buttress the general impression that it plays softball with some developers. And the fact that the agency sometimes doesn’t collect money it’s owed from developers creates the impression that it makes up the rules as it goes along. The same holds true for the BRA’s tax-funded, nonprofit lending arm known as the Boston Local Development Corporation. Clearly there is some inherent risk in trying to revitalize commercial centers and stimulate job growth by making loans to small businesses during a down economy. But there is no excuse for a portfolio in which more than half the loans are seriously delinquent.
An upcoming audit of the BRA’s planning department may lead to even more disturbing revelations.
Not every criticism directed at the BRA has been fair. As both Walsh and the BRA’s acting head have said, the agency has played a big role in making Boston the thriving city that it is today. But that doesn’t excuse the bad financial management practices revealed in the audits. Going forward, the best way for the agency to build public trust on big-picture issues is to make it an urgent priority to operate more transparently, fairly, and, yes, humbly in every facet of its business.