Committee Report CR-2

Joint public meeting of the Neighborhood Long Term Planning Committee, the Economic Development, Training and Employment Committee and the Public Facilities, Arts and Celebrations Committee

Councillor Leland Cheung, Chair, Neighborhood and Long Term Planning Committee, Councillor Timothy Toomey, Chair, Economic Development, Training and Employment Committee, Councillor Kenneth E. Reeves, Chair, Public Facilities, Arts and Celebrations Committee, Councillor Minka vanBeuzekom, Vice Mayor E. Denise Simmons, Mayor Henrietta Davis, Richard Rossi, City Manager, Lisa Peterson, Deputy City Manager, Robert Reardon, Director of Assessing, Louis DePasquale, Assistant City Manager for Fiscal Affairs, Brian Murphy, Assistant City Manager for Community Development (CDD), Lisa Hemmerle, Economic Development Director, CDD, Stuart Dash, Director of Community Planning, CDD, Pardis Saffari, Associate Planner, Economic Development Division, CDD, Ellen Semonoff, Assistant City Manager for Human Services, Nancy Glowa, City Solicitor, Cynthia Griffin, Purchasing Agent, George Metzger, Consultant, HMFH Architects, Inc., Alan Penstein, HMFH Architects, Inc., Rebecca Rutenberg, Aide to Councillor Cheung, Jason Alves, Aide to Councillor Toomey, John Clifford, Aide to Councillor Reeves and Donna P. Lopez, City Clerk.

Rozann Kraus, 91 Chilton Street, Dance Complex, Trudi Goodman, 1221 Cambridge Street, D. Margaret Drury, l Dudley Court, Tom Stohlman, 19 Channing Street, Young Kim, 17 Norris Street, Seth Teller, Marzyeh Ghassemi, Pat White, Artist, CAA member, Heather Hoffman, 213 Hurley Street, Nadeem Mazen, 73A Magazine Street, Mark Jaquith, 213 Hurley Street, Gary Dmytryk, 2440 Mass. Avenue, David Bass, Joh Magnahan, Ilan Levy, 148 Spring Street, Michael Devney, 205 Green Street, Kim Kaufman, David Mather, Carol Bellew, 257 Charles Street, Rachel Spiller and Bob Hurlbut, 5 Sparks Street.

Councillor Cheung convened the Neighborhood and Long Term Planning Committee, Councillor Reeves convened the Public Facilities, Arts and Celebrations Committee and Councillor Toomey convened the Economic Development, Training and Employment Committee.

Councillor Cheung stated that this meeting is to discuss the future of the Foundry Building. In response to an order adopted by the City Council, the assessor submitted a report on the current status of the building, preliminary estimated costs of bringing the building up to code and a variety of financing scenarios. Councillor Reeves stated that the Foundry Building Reuse Study document was received but there was no discussion or presentation. He awaits the presentation. Councillor Cheung remarked that he believes that having programs about innovation and arts in this building would be going in the right direction.  Going forward, the question is how we get there.

Mr. Rossi stated that in the spring, the City Council adopted an order asking the City to look at the Foundry Building and to prepare a list of the current deficiencies in the building and an estimate as to the costs of rehabbing the building to bring it up the code. HMFH was asked to prepare an analysis, without prescribed notions for use, as to the current state of the building and costs to make it usable going forward.  Mr. Rossi noted that there are several issues to grapple with going forward, including potential financing, as this is not in the financing plan or the bonding plan for the City. He asked Mr. Metzger for a brief summary of the study.

Mr. Metzger explained that HMFH was asked to determine what it would take to put the building in usable condition without any preconception of the potential use. The Foundry is structurally an interesting building that was built with open bays and heavy tempered framing. In 1980, it was changed to a three floor building.  All analysis that was done was merely visual without cutting into the walls.  HMFH explored two potential scenarios - a renovation of the building of minimal effort to bring it up to code, or a renovation of a higher level with energy conservation.  The difference between the two costs is approximately 1.5 million, with the higher cost for the mechanical systems and higher energy consumption, as the 1980s systems are not energy efficient . A premium cost was not estimated for a historic building. This building is not considered a historic building.

Mr. Rossi asked Mr. Metzger if the building's use is continued without renovation and the City added 10,000 square feet for community use, would it still trigger the accessibility requirement. Mr. Metzger responded in the affirmative. Anything that invites the public in has to be accessible. He remarked that if the building was rented today as is, the City would not get much rent. The market value without significant improvements is limited.

Councillor Reeves stated that the market is telling us that there is so little available in Kendall Square that Central Square is the overflow. So why would rental be low? Mr. Metzger stated that he meant in the current condition the rental income would be small. Councillor Cheung commented that Intrepid Lab had a discount on rent and the space is similar to the top floor of Foundry building.

Councillor Toomey stated that when the building was deeded to City, its value was $16 million. He is surprised to hear about the discrepancy in value. Mr. Rossi stated that Mr. Metzger did the building construction cost. Councillor Toomey stated that he assumed the value of building is rising. Mr. Reardon added that this building is now vacant and when deeded to the City, it was a full service building. Councillor Toomey felt there would be more use for this building now. Mr. Reardon noted that the lower figure includes deductions for renovations so that it meets City specifications. It would be worth $18.5 million, but after renovations, it will only be worth six million.

Councillor Cheung asked Mr. Murphy what the going rate of class B office space is. Mr. Murphy responded it is in the $40/square foot range. Mr. Reardon added that the Foundry building is a class B property, but it is not in the $40 price range. There is 53,000 square feet of space leased out.

Councillor Reeves noted that he has seen this happen before. He mentioned the dance complex buying the Odd Mans Hall. The City gave a gift of $75,000 and then the stores on the first floor paid the rental space for the top floor. There were no renovations made to this space. He would be interested in a use that can happen now at the Foundry building without a significant cost.

Mr. Rossi stated that it would helpful for the City Council to specify the amount they want to spend on the building and their ideal uses so that we can explore creative financing.

Councillor Toomey remarked that residents have expressed that they would like to keep the building and have it be a mixed use space. The City can give high tech companies space to offset costs, provide performance space, art venues, and community space. This is a doable plan, and he does not want this to take as long as it took to make a decision on the library.

Councillor Cheung wanted to look at creative financing. He noted that the City should not simply peg itself to 10,000 square feet of community space, but should use this time to think creatively about a use that would be the best for the community. He noted that this building is between Fletcher Maynard and Kendall Square, and that it would be a great environment for students to go for an art class, see nonprofits in action, run into an entrepreneur in the elevator, and do their homework in a collaborative working space. He wants to fit different communities in this space, and to explore creative financing options to make this building useable. He does not want to sell the building.

Mr. Rossi stated that the City administration is awaiting a policy decision by the City Council as to how to proceed.  It is a challenge to have agencies with small finances go into a space that is inefficient. Exploring creative financing options is essential. Councillor Cheung inquired as to whether the City can come up with a model that would allow us to take a loan on the back end. Mr. Rossi stated that nowhere is there a plan for the City to bond the upgrade of this building in the financing plan.

Councillor Toomey asked Mr. Rossi and Mr. Metzger if it would be more cost effective to tear the building down and partner with a private entity to create a state-of-the-art facility. Mr. Metzger stated that the zoning in district is what the building is. The building is currently built to maximum zoning. The value of this property is in its location. Parking would become a requirement if it were torn down and rebuilt. It isn't a question he is able to answer at the moment. A market study would need to be done on this.

Councillor Reeves spoke about the Alexandria zoning. Creative incubator space would enhance arts space. He spoke about a vision and the possibility of subsidizing. He did not hear anyone say they wanted to sell the building.

Vice Mayor Simmons stated that she is not in favor of selling the building. This building is an amenity from the Alexandria zoning. She asked Mr. Rossi about whether the CHA multiservice center partnership model could be used. She inquired if the City is in any rented space at the moment.  Mr. Rossi responded that the School Department is only department in rental space. The rental fee is $130,000 annually. Mr. Rossi explained that the CHA brought monthly rental payments that were used to offset the debt service.

Vice Mayor Simmons suggested putting the School Department on top floor of the Foundry building and the community space in the bottom floor on the Foundry building. Councillor Cheung stated that this is an opportunity for the City Council to discuss this issue. He favors putting the school administration in a school building. He wants the Foundry building to be a building that kids go to.

Councillor vanBeuzekom stated that she has three questions going forward:  should the City sell the Foundry or manage it ourselves or partner with nonprofits; what is the use of the building; and can renovations be done in phases? The reuse study assumes all renovations will be done at once. Does the roof need to be replaced now or can this renovation be done at a later time. Mr. Metzger responded that it was not approached as phasing. The assumption of a building this size is that you do not want to inconvenience tenants in the building by having to replace the roof. A completed renovated building is more appealable to the market. Councillor vanBeuzekom noted that there were no financial plans to do the schools, but this work is occurring. Mr. Rossi explained that the bonding rating agencies information about the City needs to be disclosed and this will need to be revisited. This involves a lot of decision making on the financial side. Councillor vanBeuzekom remarked that the City owns the Foundry building. It would criminal to do nothing with it. Either sell it or partner with a private entity. Mr. Rossi stated that the current project bonding does not have a new bridge - this figures into the tax rate. Councillor vanBeuzekom commented that there are four ways to fund the Foundry. They are raise taxes, get bonding, pay out of free cash or do some creative process. Mr. Rossi added leasing to a developer who would do the renovations.

Mr. DePasquale informed the committees that although the capital plan can be modified, the tax rate projected for the next three to four years is higher than previously projected due to the school buildings. The real issue is the impact on the taxpayer. If new capital projects are added, there will be increased taxes. There would be ramifications to the City if free cash were used to lower tax bills. Councillor vanBeuzekom would prefer the creative solution or the use of free cash. Mr. Rossi further added that the City does not have the expertise to manage real estate. He noted that there are other needs for free cash that we may not be aware of, including other city buildings that need repair as well as City streets that need repair. The City is not just doing one thing.

Councillor Toomey commented that Alexandria and the Broad buildings will soon be opening. The Broad capital should be used to fund this project. There will be additional taxes paid in the city. Money is coming into the City. Mr. DePasquale stated that new construction helps distribution on the commercial side. This needs to be looked at and planned.

Councillor Reeves stated that there are limitless options here. We could get many options with no decisions. How much in taxes did City receive when the building was fully occupied? Mr. Reardon responded $280,000. Councillor Reeves we are losing money and a decision needs to be made.

Councillor Reeves stated that the City should have a performance space. Boston owns a performance center. There is no arts space in eastern part of City, but the multicultural arts center is there. The City's track record of owning and manage property is not the City's strong point. Councillor Reeves questioned if the City did a long-term land lease, similar to what is done by MIT, and if City still owned the building would it impact the accessibility and systems issues. Mr. Rossi noted that it depends on how the lease is structured, but it is a public space. Councillor Reeves spoke about The Brewery in Jamaica Plain as an interesting space. The person who is running this space is from Cambridge.

Councillor Cheung stated that this meeting is an opportunity to state where we are in general so that the administration knows what the City Council wants. He noted that if the City stipulates a set of conditions on the sale of a building, developers still can find a way to do what they want with it. The only way to make sure that this is for the community is to retain ownership of the building. Can a master lease be done with the uses defined?

Mr. Rossi stated that this building is a historic building by its age. The Historical Commission will want input in the decision making process and will not want the building to be demolished but rather rehabbed.

Councillor vanBeuzekom stated that she likes the long-term land lease model used by MIT. She stated that the City should want the building net zero.

Councillor Toomey stated that he would like to see a rough estimate of the financial differences between renovating the building and tearing it down completely.

). He stated that each option is creative financing. The first three options are if the property is sold and options four through six are estimates if there is a land lease. Councillor Cheung stated that he wanted the backup that went into the numbers in the options supplied by Mr. Reardon.

Councillor Reeves questioned option five as a rental. Mr. Reardon stated that 80 percent of the building would pay for the 100 percent of the operating expense with 10,000 square feet not being charged. Mr. Rossi added that the old police station before renovations was 35,000 square feet.

Councillor Cheung asked about the diminution of the process. He inquired whether there could be a way to solicit bids as to how the uses determined by the City Council could be put into the building and have it still be sustainable and net profitable for the City. Could the process specifically specify the importance of community benefit over money? Mr. Rossi remarked that Councillor Cheung is describing a RFP where price is not the sole issue. The City would seek proposals, ask for a response back, and not just evaluate based on cost. It would be quality compliance for start up space and the arts. If the City had a proposal the diminution would be sent to City Council. Ms. Glowa stated that compliance with Chapter 30B would be needed as well as a recommendation from the City Manager for the diminution of process. It would make good sense and the proposal could always be rejected. Councillor vanBeuzekom asked what the public process is if not 30B. Ms. Glowa stated that Chapter 30B does not have a set period of time. There is a time for the responses and then they are evaluated. Bidders would bid on the qualifications. A lease is a disposition of the property and is subject to state law and city ordinances. Councillor Reeves added that the MIT lease with Forest City was done at a lower economic time. He cautioned about building in an escalator on long-term lease.

Mayor Davis stated that she is interested in City Council coming to a consensus as to what the desired use of the building is. The Mayor's summer youth intern in her office completed research on the necessary financing for arts organizations throughout the Commonwealth, and found they require a substantial amount of money. She spoke about unfinished arts space in Somerville that is a different kind of space. Councillor Toomey stated that this is warehouse space.

Mayor Davis commented that the maximum value of the Foundry to the City is $2.5-$3.5 million. Mr. Reardon explained that if the Foundry building were sold free and clear it is worth $6 million without contingencies for the 10,000 community space. Mr. Murphy added that the letter of commitment in the zoning requires the uses to be education or institution space. Mayor Davis stated that the sale of the building could be a sale to an arts institute.

Trudi Goodman, 1221 Cambridge Street stated that there are six educational institutions in the nearby vicinity that could use the space immediately. People are interested in developing the space, including various institutions in the area that have run out of space such as the East End House. She suggested another feasibility study that thinks outside the box with reuse material and passive solar MIT should help out with this. People need this.  She stated that the figures do not jive. This is a different space. If deemed a historic building would federal government be sued to adapt the space?

Young Kim, 17 Norris Street, stated that this is a great opportunity to have a community arts center in Cambridge. Do not sell the property.

Ilan Levy, 148 Spring Street, stated that a community plan for the arts should be the primary use. Starts ups should be the first eliminated for the use of this space.

Heather Hoffman, 213 Hurley Street, read from Cambridge zoning which talks about what this building should be used for: municipal, educational and community uses. This is the entire building, not the 10,000 square feet. This building was not given to the City to be another office building. This is supposed to be something special. She is baffled why the City does not follow the municipal code.  Just do it and use it.

Nadeem Mazen, 73A Magazine Street, supported the Foundry building as an arts and culture space in its entirety. If leased or sold certain arts organizations will be left out because of the costs, as they cannot afford $40.00 per square foot. It would be great to see the breakdown of the math and the renovations costs. This is a great opportunity for the City. It is good to have the City Council prepared with creative solutions for meetings like this. Using free cash is a great idea. How much is in free cash?

Michael Devney, 205 Green Street, stated that his family made trucks at the Foundry building. He would love the building to be used well. He asked about access from Bent Street. This building was designed for large open space; this would be a better use of the space. The foundation was built for the weight.  He commented on the five year plan in comparison to the age of the Foundry building, which has existed for 150 years. To put a five year limit seems to be an inappropriately short length. He inquired what type of auditorium space is available in this area that could be rented out.

Kim Kaufman urged the City Council to keep the property and use it for the arts. This is an excellent opportunity to support the arts organizations. She spoke about Debra Mason that lost their space and this could be used for them for kids and adults. The non-profits provide the means for enrichment for children whose parents cannot afford the service. She asked what is it worth to the City to let the Foundry building go from the City.

David Matter, resident of Watertown, fellow at MIT and affiliation with the arts. He spoke about the RFP process. He stated that one aspect is the credibility of the agency. MIT has credibility. He spoke about partnerships between the arts, technology and science is being looked at by MIT. This is a mixed use. Exhibition, workshop, café and conferences could be used as well as for open space. This is a modest space for smaller theater groups. The possibilities would be interesting to pursue with MIT. MIT would have to know about the RFP and think through the financial constraints. A proposal from MIT may have safeguards and fit into a long term lease.

Carol Bellew, 257 Charles Street, stated that East Cambridge has worked hard on the Foundry building for two years. She stated that a third of Foundry building should go to the non-profit industry. There is no technology space in Kendall Square and these companies are going to Boston. She hopes that this can be moved along. She hoped a web site would be available for the public to record their feelings for Foundry building. The remainder of the building should be used for innovation space.

Mark Jaquith, 213 Hurley Street, remarked that all options need to be discussed. This is a good start. The development and taxes in East Cambridge have been watching all the development coming on line in the future. This represents a lot of money. A neighborhood development corporation should be considered. This is what runs the Brewery. The Multicultural Art Center does not do much for the City.

Desmond Yeung, 280 Harvard Street, an arts administrator, stated that MIT is an excellent resource for arts, technology and science. The Cambridge Arts Council board members should be involved. He attended the open house at Foundry building. There were not a lot of Cambridge artists at the open house.

Rachel Spiller stated that the Cambridge Arts Council is not here. There are a number of larger groups that need space and have not been invited to this meeting. Developing another arts center is not in competition with the Multicultural Arts Center. On the financial side there is a digging in of heels - it is not in the financial bonding plan. She has never seen Cambridge stand still and stay stagnant. She encouraged a more open approach to the financing.

Bob Hurlbut, 5 Sparks Street, stated that the Cambridge Community Foundation has an artist studio on Bent Street and has exposed this to school children. Children can show sparks if they have exposure to the arts. This is a partnership between the School Department, Lesley University and the Cambridge Creativity Commons. Mr. Weeks is part of this process that has been ongoing for three years. Cambridge is wild and creative for the arts.

Councillor Toomey stated that we haven't considered that there is a financial opportunity to tap into the resources of private developers and private citizens.  The citizens of Watertown raised over seven million for the Arsenal Arts Center. Mr. Rossi stated that was done with the Watertown Redevelopment Authority. He can discuss this with the CRA.

Councillor Reeves stated that in Massachusetts the taxes cannot be dedicated to a particular source. The court stated that the tax money could not be dedicated from a space to a dedicated cause. He wants something done that is edgy with the arts connected. Our local artists tell us who we are. Cambridge could use an infusion about what makes the heart happy. The creative, art and innovation, is where money should be put and should be put soon. This should not be a protracted discussion. This needs to be decided.

Mayor Davis asked who will operate the arts center. This is a non-profit operation. Mr. Rossi responded that this is not a predetermined decision by the City. The City Council must decide this. It is a little tricky with the anti-aide amendment. Mayor Davis spoke about a housing need for the artists. She questioned if this has a funding stream. Councillor Cheung asked Mr. Metzger if the Foundry building was studied for livability. Mr. Metzger responded that the property is zoned for housing. There is no reason this cannot be considered.

Councillor Reeves stated that Mr. Rossi brings the ability to help a group to come up with a great outcome. He spoke specifically about the library. The City Council is fractured with making a decision in this decade. Make this decision and get it rolling. Mayor Davis would like this done by January.

Councillor Cheung stated that he hears that this is not a preset notion. He is happy to hear that Mr. Rossi is looking to the City Council for direction. We do not want to sell the building and do not want to run the building. He stated that he wanted projections and the math background to understand the figures. He stated that auditorium space is available in the Broad. He asked if Cambridge groups could use the IBM space for performance space.

Mayor Davis stated that the Council should not take selling the building off the table as part of the whole package with stated requirements for the use of the building. There is nothing wrong with this. This is the City's contribution to the cause. Mayor Davis stated that the dance complex, Dante Alighieri and CMAC are all examples of how this could happen. Cambridge is good with partnerships. These are complicated issues. City runs good schools and senior centers.

Councillor Cheung stated that he heard an inclination not to sell. He spoke about the long-term gain to the City. He asked does the City have an online tool to see the Foundry building. What is the City Council's common vision for the building?

Councillor Reeves suggested seeing the Foundry building and the Arsenal Arts Center. He wanted CDD to arrange this. The next meeting should take us forward. Mayor Davis suggested adding Maude Morgan. She wants a work space for artists like Brickbottom.

Councillor Cheung there is an appetite to visit these sites and explore copying different buildings and how the financing took place. Mr. Rossi stated they should see the models and talk to MIT.