For Immediate Release - October 26, 2009

Attorney General Martha Coakley's Office Reaches Settlement with Braintree Developers Concerning Compliance with Chapter 40B

BOSTON - Attorney General Martha Coakley's Office has reached a $2.275 million settlement with the developers of the Turtle Crossing Condominium Complex ("Turtle Crossing") in Braintree, resolving the office's investigation into the developers' compliance with chapter 40B. The investigation focused on whether the developers conformed to chapter 40B's restriction on developer profits on affordable housing projects, which in this case were capped at 20 percent pursuant to an agreement between Braintree and the developers. Chapter 40B - the state's affordable housing law - encourages the development of affordable housing by granting developers waivers from zoning and other local ordinances and bylaws in return for a commitment to earn a limited development profit. Under Chapter 40B, those developers who benefit from the advantages of the law are limited to a reasonable profit on the affordable housing projects they develop.

Commerce Park Housing Associates, LLC ("Commerce Park") is a limited liability company formed for the purpose of developing Turtle Crossing. Fish Commerce, LLC ("Fish Commerce") and Messina Commerce LLC ("Messina Commerce") jointly formed Commerce Park. In 2003, Commerce Park received a Comprehensive Permit pursuant to chapter 40B to develop Turtle Crossing. The principals of Fish Commerce and Messina Commerce, including Edward A. Fish and Francis X. Messina, are long-term Massachusetts real estate developers.

Commerce Park has agreed to pay $2.275 million to settle any claims arising from this investigation, and claims related to the chapter 40B cost certification process. Under the terms of the settlement, $1.8 million of the payment will be directed to the Town of Braintree. Specifically, $1 million will be placed in Braintree's affordable housing fund and $800,000 will be delivered to Braintree for other public uses. The remaining $475,000 will be directed to the Commonwealth's General Fund.

"We are pleased that the developers' have agreed to pay back this money to the town of Braintree and the Commonwealth. Chapter 40B offers considerable benefits to affordable housing developers, but in exchange requires that developers must accept reasonable profit levels," said Attorney General Coakley. "Our office will continue to focus on developer compliance with the cost reporting and profit limitation requirements of the law."

Last month, the Attorney General's Office filed a lawsuit against Acton-based Crossroads Development LLC ("Crossroads"), its owners James Fenton and Michael Jeanson, as well as a related contractor, James Fenton & Son Contracting, Inc. (JF&S) for violating the False Claims Act (FCA) in connection with falsifying cost statements and profits on an affordable housing development in Acton.

"This is a victory for Braintree" said Braintree Mayor Joseph C. Sullivan. "Questions about Turtle Crossing were brought to my attention by Braintree Housing Authority Director Lauren Murphy in May 2008. I immediately contacted the Inspector General and through their offices, we secured the assistance of the Attorney General. The resolution announced today is the culmination of 16 months of work and illustrates Braintree's commitment to affordable housing."

With respect to the Turtle Crossing development, in February 2009, Massachusetts Housing Finance Agency ("MassHousing") submitted to Braintree a draft report concerning the Cost Certification process - the process by which a developer, at the end of a project, certifies revenues and costs for the purpose of determining allowable profit. The Attorney General's Office scrutinized the developers' reported costs for land acquisition, and other costs related to the project such as brokerage fees and the treatment of insurance proceeds. The settlement resolves all the issues raised by MassHousing in its draft report, as well as other concerns raised during the Attorney General's investigation.

MassHousing and the Department of Housing and Community Development ("DHCD") have been valuable partners to the Attorney General's Office during the investigation. The Inspector General Gregory Sullivan and his office initiated an independent investigation of the Turtle Crossing development, offered valuable guidance to the Attorney General's Office, and participated with the office in investigating and resolving this matter. The Town of Braintree and Braintree Mayor Joseph C. Sullivan also assisted in the investigation of this matter.

"The 40B program is the single most important tool to build affordable housing in Massachusetts,'' said MassHousing Executive Director Thomas R. Gleason. "We were pleased to work with the Attorney General and the Inspector General to reach a swift and effective resolution of this matter.''

"My office appreciates the efforts of Attorney General Coakley and her staff in addressing developer compliance with proper cost reporting and profit limitation requirements of chapter 40B," said Inspector General Gregory Sullivan. "Protecting the integrity of the chapter 40B process is paramount to protecting the public trust."

Assistant Attorney General Matthew T. Connolly and Legal Analyst Jeffrey T. Walker handled the matter for the Office of the Attorney General, with assistance from Chris Barry-Smith, chief of the Public Protection and Advocacy Bureau.