Harvard buys land in secret real estate deals

Harvard University officials recently revealed that they spent $88 million over the last eight years to secretly acquire over 52.6 acres of land in the Allston area of Boston located across the Charles River from Harvard's Cambridge campus. In a controversial move, the university purchased the properties -- which include a shopping center, vacant Sears building and the site of a former concrete plant -- through the Beal Companies of Boston. The university now owns 220 acres in Cambridge and 192 acres in Allston. While most people associate Harvard with Cambridge, the Harvard Business School and Alumni Stadium are both already located in Allston. In a letter to Harvard President Neal Rudenstine, Mayor Thomas Menino said he was disappointed the university chose to conceal its identity rather than being up front with the people and the city. He said the recent real estate dealings represent "the highest level of arrogance seen in our city in many years." But Harvard spokesperson Joe Wrinn explained that buying anonymously through an agent was "fiscally prudent" because it allowed the university to attain the properties at a fair price. If the sellers had known that one of the potential buyers was Harvard -- with its endowment of over $9 billion -- Wrinn speculated that they would have demanded that the university pay more than market value for the acquisitions. While Harvard does not yet know how it will put the properties to use, Vice President for Administration Sally Zeckhauser explained that "it is essential, with an educational institution, to ensure that there are enough physical resources to sustain future academic programs." She called the recent acquisitions "an investment in the future of both Harvard and Allston." Zeckhauser added that other organizations have used similar tactics in their real estate dealings. "Sometimes an outside party is asked to make such purchases in order to avoid having to pay significant premiums above the fair market value," she said. "Past local examples include the Boston Public Library, International Place and New England Life." Associate Vice President for Planning and Real Estate Kathy Spiegelman said the acquisitions provide an opportunity for the university to work with community members to encourage Allston's economic development. "We believe that by planning for Harvard's future in Allston, we can be part of Allston's full participation in the positive economic development of Boston," she said. "We are committed to working with the Boston Redevelopment Authority and our Allston neighbors toward the realization of that goal." Zeckhauser added that Beal continues to handle the day-to-day management, leasing and redevelopment of the properties. "Harvard plans to continue to lease the properties in the near term, aiming to encourage uses compatible with the interests of adjacent residential areas and conducive to the area's economic vitality."

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