Businesses Score Dream Leases At Taxpayers' Expense
BOSTON (CBS) - There are some incredible deals when it comes to leasing state property. The State Auditor is reviewing the way these deals are struck.
Whether it's a boathouse on the Charles River, or a small private yacht club in Quincy, they have two things in common: They both sit on state property, and boy do they have a deal at taxpayer's expense.
"I think the system was flawed," says Ed Lambert.
Lambert is the Commissioner of the Department of Conservation and Recreation. His agency handles 1,000 leases for taxpayer property.
"These are precious assets that belong to all residents of the Commonwealth," says Lambert.
Lambert has personally asked the State Auditor to help overhaul the system which he inherited.
There used to be 13 state employees assigned to oversee the leasing program, but that changed during the fiscal crisis starting in 2008.
Shortsleeve: "So at one point you had two people over seeing one thousand leases?"
Lambert: "That is correct and that is the result of not only financial issues but organization issues as well."
That meant no one noticed when the Wollaston Yacht Club didn't pay its rent for six years. And that rent was just $400 a month to begin with.
Now Lambert has told the club to pay up or close down.
And then there's Harvard University, which operates a sailing club on the Charles River and pays just one dollar a year in rent.
And while their lease requires some public access, there is none.
Lambert says, "We have asked Harvard to come in so we can review their relationship with us on that sailing pavilion both in terms of monetary contribution as well as public benefit."
Then there are leases state officials can't do much about. They are called legislative leases, leases that become law.
The lease for Harvard's Newall Boathouse across the street from Harvard Stadium is perhaps the granddaddy of them all.
Harvard gave the state 46 acres down river around the year 1900. In return, Harvard can rent the prime riverfront space for a dollar a year for a thousand years.
Shortsleeve: "Have you ever heard of a thousand-year lease?"
Lambert: "That is a long lease."
Yes it is.
In fact, it even gives Harvard an option for another 1,000 years.
State Senator Bruce Tarr welcomes the auditor's review, but says the whole leasing system has to be reformed and that includes both traditional and legislative leases.
"It is about the integrity of state government," says Tarr.
For example, Tarr wonders if there is enough free public programming at the Museum of Science which has a legislative lease which runs thru 2048 at a buck a year.
And then there is Sullivan's restaurant on Castle Island which enjoys a monopoly.
It's the result of a very affordable legislative lease passed a few days after Christmas in 1984 without a roll call vote.
South Boston's William Bulger was presiding over the State Senate at that time.
"I think there needs to be more scrutiny," says Tarr.
"I think all too often it is easy being part of another bill and gets slipped through."
Employees from the State Auditor's office now spend their days at the Department of Conservation and Recreation pouring over hundreds of leases.
The auditor's office expects their review to be complete by the fall.
