For nearly two years, the Boston Planning & Development Agency has tried to promote diversity among bidders for city-owned properties. But City Hall is now issuing a warning shot to the real estate development community, one that essentially says: We’re serious about this.
The agency is poised to redo the bidding for three properties after city staffers were disappointed by the inadequate details concerning diversity and inclusion among the initial bids. For the next round of bids, the BPDA is making it clear that a full 25 percent of the scoring will be based on the diversity of the would-be developers’ equity partners or development teams.
The crackdown is being welcomed by people of color in the industry who say it can be tough to break into Boston’s insular development scene.
“That’s a wake-up call for the developers,” said Joseph Feaster, a land-use lawyer and chairman of the Urban League of Eastern Massachusetts.
The BPDA board of directors is scheduled to approve the rebidding of the three parcels at its meeting on Thursday. The properties in question include an unused power plant in the Charlestown Navy Yard and parcels at 142 Shawmut St. in the South End and 516 Main St. in Charlestown.
“All we’re saying is broaden your horizons, stretch yourself,” said Brian Golden, director of the BPDA. “If we don’t have something that we call out in black and white, I’m concerned that human beings will do what human beings do, and just go back to where they are most comfortable, to the people they’ve always known.”
The Main Street and Shawmut properties received bids only from abutting owners, BPDA officials said. The old power station received two bids initially, but only one development proposal made it far in the BPDA review. Golden said the relatively small number of bids was not surprising, given the complexities associated with these properties, and had nothing to do with the decision to reopen the bids.
The BPDA’s actions, though, come in the context of waves of protest in Boston and across the country over racial and economic disparities. As a result, political leaders such as Mayor Marty Walsh are facing calls to take a stronger stance in addressing these inequities.
The Walsh administration adopted a policy in October 2018 that required all bidders for city land to craft a diversity and inclusion plan aimed at increasing opportunities for people of color and women.
But a specific scoring system that factored diversity into bid evaluations was not identified at the time. Now, ratings of land dispositions for all city-owned properties, controlled by the BPDA or another city agency, will factor diversity in at 25 percent of the scoring.
Such an approach is known informally in Boston as the “Massport model,” because the Massachusetts Port Authority decided to give a 25 percent weighting to diversity criteria when evaluating bidders for surplus land it owns in the Seaport. An Omni hotel on Summer Street and a nearby office building are being built under this approach, with more in the pipeline. Many people of color are part of the projects’ investment and development teams.
Can the Massport model be successfully replicated? Robert Livingston, a public policy lecturer at the Harvard Kennedy School who coauthored a case study on Massport’s approach in 2019, believes it can — in the right circumstances.
In an e-mail, Livingston said what makes the Massport model so effective is that it goes well beyond good intentions and noble mission-statement claims. The port authority changed policy, he said, and saw immediate results.
“Massport was in a powerful position to change the rules of the game, playing in one of the hottest real estate markets in the country,” Livingston said. “I don’t know if the model would work in Kansas, but I believe it could be replicated in other public agencies, like the BPDA, that have the leverage to change the rules on how business gets done.”
Dave Madan, founder of the Builders of Color Coalition, said the BPDA’s action sends a strong signal to everyone in the industry to expand their professional networks. This is just one way, Madan said, to address the persistent segregation that remains in Boston.
“I feel like this is one lever in the process,” Madan said. “We see this as a solid step ahead.”
The BPDA’s change in approach involves only the land-disposition process. However, the agency is looking to hire a director of diversity, inclusion, and equity. That person will be charged with reviewing how to improve diversity and inclusion across all of the agency’s processes.
“If you take this posture, it sends a firm message you are serious,” said Kirk Sykes of Accordia Partners, whose firm specializes in putting together diverse development teams. “It’s going to take that level of conviction to change a culture that has been exclusive for a very long time.”