Five Takeaways from the Brutal Audit of the Boston Redevelopment Authority

Boston City Hall Photo by Naquib Hossain on Flickr

The latest audit of the Boston Redevelopment Authority found that it is a dysfunctional public agency suffering from poor organization, a lack of transparency, and has no long term vision for the city. The scathing audit, conducted by McKinsey & Company, said the organization lags behind its counterparts in other major cities in many areas, particularly planning.

Here are five key takeaways from the audit:

1. The BRA does not have a comprehensive citywide vision.

Boston has not had a wide-ranging citywide planning blueprint since 1965 when the automobile was king and urban renewers were tearing down the city’s soul from the inside to put up brutalist parking garages. The bulk of the BRA’s planning has only been conducted at the neighborhood level, if at all. The city does have smaller citywide plans that focus on certain areas like transportation, housing, and the environment but they are all standalone plans.

Boston today does less proactive planning than many of its North American peers, such as San Francisco, Philadelphia, Seattle and Vancouver, or leading global cities, including Singapore, Hong Kong, London and Berlin. Nearly all have a complete set of neighborhood plans, whereas Boston has plans only for select areas. Similarly, most large cities engage in comprehensive citywide planning or, at a minimum, set out a strategic planning vision and goals.

2. The BRA is not a one-stop shop for planning activities.

The processes that are typically handled by a comprehensive city planning agency are divided among several entities in Boston, creating a complicated and sometimes painful experience for developers and residents. The audit found that the BRA is unique in its structure among similar agencies in North America:

Like Boston, peer cities in North America conduct planning and development review within a single organization, but most have dedicated, standalone planning organizations that provide fully integrated customer experiences by handling planning, development services, permitting and inspection. Boston, in contrast, breaks up the customer experience across BRA, the ZBA (Zoning Board of Appeals), and ISD (Inspectional Services Department). None of the peer cities analyzed includes real estate management as part of its planning organization. Boston is unique in that the BRA is a self-funded entity with revenues coming primarily from rents and leases; other city planning agencies are funded through a combination of city budget and development fees.

3. Not only do they need more staff, the current staffers are unhappy.

The BRA has a litany of management problems, a dysfunctional culture, and a staff that feels helpless. To top it all off they need to hire more people to be on the same level as other planning agencies around North America. Boston employs approximately 45-55 people that work on the planning process for the city compared to the 60-110 that do the same in the similarly sized cities of San Francisco, Seattle, and Vancouver.

Across both the Planning Department and the BRA more broadly, the survey conducted during this effort highlighted personnel management processes are either absent or poorly executed. Employees in Planning describe the culture as hierarchical and say they do not feel empowered. A $300 software purchase, for example, was said to require approval from the Director of Planning. Employees say they receive no coaching or feedback and receive minimal communication from leadership.

4. The BRA really needs to improve its transparency.

State and municipal entities across Massachusetts are pretty bad when it comes to transparency and the BRA is no exception. The department’s finances are a confusing mess of outdated information that is focused on the short term and rarely posted publicly. The BRA does not have departmental breakdowns of its budget. Plus, just 18 percent of staffers think the BRA operates in a transparent manner even though the agency has made significant strides, particularly digitally, in the last two years.

The BRA’s Finance Department can play a pivotal role in improving transparency and strengthening governance. The research revealed several gaps between the BRA’s financial processes and capabilities and what is typically expected from a finance department. The BRA has no departmental budgets, for example. Forward-looking projections are limited to a year, and they do not reveal all of the logic behind the projections. Since the group conducts no annual strategic planning or budgeting, it does not explicitly identify the organization’s priorities for the year, which could help illuminate funding needs. Vital data, including balance sheets and employee lists, are not consistently up to date. Pulling accurate balance sheet detail – balances by account – took more than a week to complete. Audited financials have not been publicly posted since 2012. In short, the BRA could significantly improve its financial processes, capabilities and tools.

5. The BRA does not know where all of its real estate assets are.

The bulk of the BRA’s revenues come from activity related to property it owns. The BRA has several leases out on property and generates the occasional cash from the sale of a property. The problem? The BRA does not have an accurate accounting of all the properties its owns. The audit concluded that the BRA owns approximately 16-18 million square feet of land in Boston, of which 10-12 million is developable and for sale or lease. The BRA’s land is divided among approximately 500 parcels.

The BRA does not currently have a comprehensive, accurate list of its real estate assets. It maintains a list of all the land it owns in a database called BOLD, which is accessible to the general public through the BRA web page. But this database has not been updated recently, with staff acknowledging that several listings are inaccurate. For example, one parcel is listed at 1.9 million square feet, or seven square miles – 15% the total land area of Boston, which staff said could not be accurate. Similarly, BRA does not maintain a central database of all its current lease agreements or track lease expirations or re-negotiation triggers in real time. While lease documents are now digitized and centralized, the agency is just now putting in place a real estate and lease management tool, Yardi, which according to BRA Finance Dept. is expected to be fully functional by summer 2015.