V&M Management v. City of Boston, Et. AJ., V&M Management v. BRA
(Housing Court numbers 212269 and 25152)

These actions were originally filed in the Housing Court in 1988, and were subsequently transferred to the Superior Court. The actions claim that the City of Boston and the BRA set forth on a deliberate policy and plan to obstruct the sale of the Mandela Apartments to Shamir Construction, and did so by imposing conditions on Shamir concerning other properties that made it financially impossible to conclude the transaction. These conditions included selling a large apartment complex to a non-profit corporation at a price substantially below market value so that Councilman Scondras and Mayor Flynn could benefit politically, and requiring Shamir to submit itself to the jurisdiction of the rent equity board when it was not required to do so.

The actions of the City and the BRA would have benefited the white residents of the City, while there was no guarantee that Shamir would maintain affordability of the Mandela Apartments. The matter is still in litigation.

Estimated cost of litigation: $200,000

) Defendants )
For their Complaint, Plaintiffs allege that:
1. Plaintiff MANDELA RESIDENTS COOPERATIVE ASSOCIATION ("The Association") is a duly incorporated and chartered association of low and moderate income tenants of the Mandela Apartments, formerly known as Westminster-Willard, having its principal place of business in Boston, Massachusetts;
2. The principal business activity of the Association is the formation, organization, and operation of a resident ownership cooperative at the Mandela Apartments, the organization and training of the residents of the Mandela Apartments; and the negotiation for, and purchase of, the Mandela Apartments in the name of the Association;
3. Plaintiff V&M MANAGEMENT, INC is a duly incorporated and chartered corporation having its principal place of business in Boston, Massachusetts;
4. The principal business activity of V&M Management is^ the ownership and management of the Mandela Apartments, a low and moderate income housing development wholly subsidized by the federal Department of Housing and Urban Development ("HUD") pursuant to the Section 8 program;
5. Defendant THOMAS MENINO is the Mayor of the City of Boston, appoints the members of the Board of the Boston Redevelopment Authority, and has ultimate responsibility for the approval or disapproval of the actions of the Boston Redevelopment Authority;
6. Defendant MARISA LAGO is the Director of the Boston Redevelopment Authority, and as such, as ultimate supervisory authority for the on-going operation of the Boston Redevelopment Authority ;
7. Defendant BOSTON REDEVELOPMENT AUTHORITY (the "BRA") is a body corporate and politic, organized pursuant to the provisions of M.G.L. C.121B, and having its principal place of business in Boston, Massachusetts;
8. The principal business activities of the Boston Redevelopment Authority are urban planning, administration of projects formed and operated pursuant to M.G.L. 121A, buying and selling real estate, leasing real estate to private lessees, and investing funds in interest bearing accounts. B. JURISDICTION
9. This Court has jurisdiction pursuant to the provisions of M.G.L. Chapter 93A, Sections 9 and 11;
10. The requirements of a demand letter pursuant to C.93A, Section 9(3) have been met by the making of a written demand upon the director of the BRA, Marisa Lago by Helen Aizprua, president of the Mandela Residents Cooperative Association, on May 25, 1994;
11. Defendant BRA has denied liability;
12. The BRA purports that by statute and regulation it has ultimate supervisory authority over the activities of V&M Management, and that no sale or transfer from V&M Management to the Association can be lawfully completed without the approval of the BRA;
13. Under this assertion, both V&M Management and the Association are consumers of services provided by the BRA;
14. This Court has jurisdiction pursuant to the provisions of c. 93A, Section 11, in that all the parties are engaged in trade or commerce within the Commonwealth of Massachusetts, and jurisdiction pursuant to the provisions of c. 121B;
15. In 1986, the BRA was involved in litigation entitled Boston Redevelopment Authority v. Back Bay Restorations CQmpany_,, (Land Court Civil Action No. 116134) against Zena Nemitz, owner of Back Bay Restorations, for purported violations of a development restriction agreement;
16. On April 16, 1986, Kevin Morrison, counsel for the BRA, informed the BRA that it had received a check for
$250,000 as part of the Back Bay Restorations litigation, the money first to be used to pay expenses of the litigation, and any remainder to be spent for the limited purpose of assistance for low and moderate income housing, at the discretion of the BRA.
17. The total cost of the Back Bay Restorations
litigation was $48,737.98, leaving a balance of approximately $200,000 to be dedicated by the BRA to low and moderate income housing.
18. At the same time, the BRA was engaged in oversight of the sale of the Mandela complex by V&M Management to Shamir Construction Company, owned by Edmund Shamsi;
19. The BRA is required by law to conduct public hearings, with an opportunity for the public to participate and be heard, before any transfer of properties or funds within the scope of C.121A or c. 121B;
20. During the month of December, 1986, the BRA conducted public hearings concerning the sale of the Mandela Complex, and tenants and residents of the Mandela Apartments consulted with the BRA, and were given notice of the hearings, and the opportunity to appear and be heard;
21. On December 11, 1986, as part of these proceedings, the BRA conducted a public hearing at which time it established the "Westminster-Willard Affordability Fund;"
22. The Fund was established "for the sole benefit of the tenants of the Project, including, but not limited to,
expenditures for further rent subsidies or for providing equity for the acquisition of the Project as a cooperative;"
23. At the hearing, the BRA informed the tenants that the Fund was to be dedicated to the purpose of maintaining affordability, including, but not limited to, further rent subsidies for the project, and that the money could also be used as seed money for the acquisition of the project by the tenants.
24. The BRA informed the tenants that there was presently $200,000 in the Fund, and that the eventual proceeds could reach $2,000,000.
25. The BRA passed a resolution establishing the Affordability Fund, to consist of $200,000 and all future proceeds from the Back Bay Restorations litigation to be dedicated exclusively to the Mandela Project, for further rent subsidies or for providing equity for the acquisition of the project as a cooperative, unless such expenditures became unnecessary;
246. Due to unreasonable delay on the part of the BRA, the parties were unable to close, and in October 1987, Shamir sued V&M Management;
27. On March 10, 1988, Ricardo Millett and Robert Rush wrote a memo to the BRA in which they discussed the result of a number of meetings with V&M Management and Shamsi concerning conversion to a tenant owned cooperative, noting that approximately $200,000, was currently available. The memo also noted that the current BUD rents under the Section
8 program were only 61% to 76% of the 1988 Section 8 Fair Market Rents, and that a 10% increase in current rentals would still leave the rents below market levels, but would provide a sufficient basis for a mortgage and help the project achieve feasibility;
28. As of March 10, 1988, the BRA knew that rents were below market level, and that even under the HAP Section 8 contract, it would be necessary for the BRA to subsidize the rent if the cooperative were to be viable;
29. As of March 10, 1988, the BRA knew that the Section 8 contract with HUD expired in November, 1996;
30. The memorandum also recommended that the BRA pass a resolution authorizing the director to expend $10,000 for a consultant contract for a preliminary analysis of the structure of a tenant cooperative, the money to come from the Affordability Fund;
31. As of March, 1988, the BRA knew that the cooperative could not proceed without a private consultant working for and on behalf of the tenants, and that the funds for such a consultant would have to be provided by the BRA;
32. On March 10, 1988, Ralph Memolo, speaking on behalf of the BRA, informed the newspapers that regardless of the outcome of the V&M-Shamsi litigation, the BRA would support the efforts of the tenants to form a cooperative.
33. On March 11, 1988, the BRA wrote the predecessor-in-interest of the Plaintiff Residents' Association confirming discussions with V&M Management and Shamir and prior tenant
participation in consideration of a cooperative, and also expressing the desire of BRA. officials to meet with the tenants' association regarding the ongoing negotiations.
34. In May, 1988, the tenants' association wrote to the BRA with a formal proposal on behalf of the Mandela tenants to the BRA requesting $25,000 from the Back Bay Restorations account to be spent on a consultant and expenses to further the cooperative;
35. On June 29, 1988, Judge King ruled against Shamir in the litigation it had brought against V&M Management, finding that both Shamir and V&M Management had acted reasonably, but that the BRA "was hostile to the proposed transfer of ownership and for this reason imposed a number of onerous conditions." The Court found that none of the 16 month delay could be attributed to the parties, and went on to list a number of instances of delay which arose directly from the activities of the BRA;
36. On December 28, 1988, the BRA wrote to Winter Hill Savings, the holder of the mortgage for V&M Management stating that the BRA was reviewing a proposal by V&M Management to sell the project to a tenant cooperative, and that the BRA had allocated $25,000 for the tenants to retain consultants of their choice for the purpose of establishing a workable tenant cooperative.
37. On January 19, 1989, the BRA wrote to V&M Management indicating that it was studying several V&M proposals for sale to the tenants cooperative, and that the BRA is
"investigating possible sources of subsidy funds to augment the Zena Nemitz fund already committed to the project. The Nemitz fund at present consists of two hundred thousand dollars ($200,000) on hand and a five hundred thousand dollar ($500,000) principal only first mortgage. . .Our best judgment is that for the immediate future we can realistically count on only the $700,000 received or secured;"
38. On September 4, 1990, the tenants' association wrote the BRA, requesting release of the $20,000 being held by the BRA for purpose of hiring a consultant, the money to be deposited in Winter Hill Savings as the construction lender. The letter also indicated that coop unit reservations have been signed in excess of the regulatory minimum of 72%.
39. On March 14, 1991, the BRA voted to accept payment of $775,000 in satisfaction of a promissory note dated July 21, 1986, and a first mortgage on the Back Bay Restorations properties. It was also voted that "[T]he proceeds referenced in the above vote shall be treated as unencumbered by any prior vote of the Authority and shall be considered, when realized, as general revenue of the Authority."
40. This additional $775,000 created a total of $975,000 from the Back Bay Restorations litigation which should have
been held in escrow in the Fund for the Mandela tenants.
41. Neither the tenants, nor the tenant association, nor V&M Management were notified that the Fund now totaled almost one million dollars ,nor were they notified that their money
was being transferred into the BRA general fund, or that the money was no longer dedicated to the establishment of a cooperative.
42. Between 1990 and May, 1994, V&M Management and the tenants' Association continued to meet and to discuss the purchase of the complex as a cooperative;
43. Both V&M Management and the Residents' Association retained counsel and incurred expenses in a good faith reliance on the belief that the BRA was continuing to hold the Back Bay Restoration monies in the Fund for the eventual use of the tenants;
44. On May 25, 1994, Helen Aizprua, president of the Mandela Tenants Cooperative Association, wrote to Marisa Lago, Director of the BRA, requesting an accounting of the funds being held in trust by the BRA, and inquiring as to what arrangements can be made to place the funds in an escrow in light of reports in the Boston Globe that the BRA was in serious financial condition.
45. There was never any response to this letter.
46. On October 6, 1994, the Tenants' Association and V&M Management jointly wrote to the BRA as a result of the BRA'S failure to respond to the earlier inquiry by Helen Aizprua, requesting an accounting of all the money in the Fund within thirty days.
47. On November 3, 1994, Thomas O'Malley, an employee of the BRA purportedly wrote an internal BRA memo explaining where the initial $200,000 from the Fund went, but which
failed to discuss the disposition of the remaining $774,000, claiming that some unsigned agreement between the BRA and Shamir was the justification for dispersion of the funds.
48. On November 8, 1994, V&M Management, in the course of attempting to determine where the funds were, reviewed all the BRA files, and could find no documents indicating where any of the money went, and in particular, the purported O'Malley memo of November 3 was not in the files;
49. On November 14, 1994, the BRA responded to the joint Residents' Association/V&M Management letter indicating that the money had been disbursed, and the Fund no longer existed, but without providing any figures as to where the money went;
50. On November 17, 1995, Terry Lewis, Esq., a nationally known consultant in the formation and organization of tenant cooperatives, met with Thomas 0' Malley to discuss the Mandela situation, at which time Mr. O'Malley led Ms. Lewis to believe that there was at least $20,000 available to hire a consultant for the Tenants' Association;
51. Subsequently, V&M Management again reviewed the BRA'S files, and this time the O'Malley memo was in the file;
52. On June 6, 1995, a representative of the BRA testified before the Committee on Planning and Economic Development of the Boston City Council and promised that the BRA would meet with the Plaintiffs within ten days to proceed with the formation of the cooperative;
53. The BRA failed and refused to meet with the Plaintiffs;
54. On June 29, 1995, a representative of the BRA again testified before the Committee on Planning and Economic Development of the Boston City Council and again promised that the BRA would meet with the Plaintiffs within ten days to proceed with the formation of the cooperative;
55. The BRA failed and refused to come forward and meet after a meeting had been scheduled;
56. For approximately the last two years, the Association has been engaged in negotiations with V&M Management and HUD concerning the formation of a residents' cooperative, has elected a board, has obtained reservation forms from residents, and has otherwise completed preliminary steps necessary to obtain approval of the conversion to a cooperative from HUD;
57. HUD has informed both the Association and V&M Management that it is fully committed to conversion to a cooperative, but has informed the Association that initial organization and consultation efforts are solely the responsibility of the Association;
58. The process of conversion has proceeded to the point where the Association must hire consultants, retain counsel, and undertake training of management staff;
59. Beginning at a time at present unknown to the Plaintiffs, but at least since January, 1994, the BRA knew or should have known that HUD was discontinuing the Section 8 rent subsidy program, and was instead going to convert to a voucher system;
60. The BRA knew or should have known that many moderate income families in the City of Boston who now receive rent subsidies under the Section 8 program would not qualify for vouchers, and that a number of families within the Mandela Apartments might not qualify for the voucher program;
61. The BRA knew or should have known that for this reason HUD has failed and refused to act upon the application of V&M Management to renew the Section 8 subsidy;
62. The BRA knew or should have known that the monies contained in the Fund could have been used to temporarily subsidize rent for families in the Mandela Apartments who would not qualify for the voucher program until other housing could be found. D. FIRST CLAIM FOR RELIEF--VIOLATION OF CHAPTER. 93A
63. The allegations of paragraphs One through Sixty-two are incorporated by reference;
64. Both the Association and V&M Management have relied upon the existence and availability of these funds in proceeding with the formation of the Association, and in negotiations with HUD concerning the transfer of the property;
65. By virtue of the provisions of chapters 121A and 121B, the Plaintiffs are consumers of services provided by the BRA;
66. The BRA is under an obligation to engage in good faith and fair and honest dealing with the Plaintiffs, and is
under an obligation to not to make material misrepresentations to Plaintiffs;
67. The actions of the BRA in representing that funds were available for the purposes of the formation of a resident cooperative, and causing the parties to rely upon that representation, and then failing and refusing to disclose the non-existence of these funds, or the non-availability of the funds, or to take any action in response to inquiries of the party for whom the funds are being held in trust is a an unfair practice within the meaning of Section 2 of c. 93A;
68. As a direct and proximate result of the breach of its duties and obligations under c. 93A, the BRA has caused compensable injury and harm to the Plaintiffs;
69. The allegations of paragraphs One through Sixty-nine are incorporated by reference
70. The refusal of the BRA to comply with its resolutions and policies has interfered with the ability of the Association and V&M Management to enter into contractual negotiations, and is therefore contrary to public policy in favor of private ownership of low and moderate income housing;
71. The refusal of the BRA to comply with its resolutions and policies has interfered with the ability of the Association to proceed with organization of the
cooperative, and is therefore contrary to public policy in favor of resident ownership of low and moderate income housing;
72. The failure and refusal of the BRA to provide notice to Plaintiffs that additional funds had been received, or to provide Plaintiffs with notice that a meeting would be conducted in which Plaintiff Residents Association's right to use those funds would be terminated, violated the obligations of the BRA under chapters 121A and 121B, violated the administrative procedure and open hearing requirements of state law, and deprived Plaintiffs' of due process of law;
73. As a direct and proximate result of the breach of its duties and obligations under chapters 121A and 121B and relevant provisions of state law pertaining to open meetings, and the due process provisions of the State Constitution, the BRA has caused compensable injury and harm to the Plaintiffs;
74. The allegations of paragraphs One through Seventy-three are incorporated by reference;
75. By virtue of its position created under Chapters 121A and 121B, the BRA has fiduciary duty to the Plaintiffs;
76. As a direct and proximate result of the breach of its fiduciary duties and obligations the BRA has caused compensable injury and harm to the Plaintiffs;
77. The allegations of paragraphs One through Seventy-six are incorporated by reference;
78. The BRA represented to Plaintiffs that approximately $2,000,000 would be available from the Back Bay Restorations
79. The BRA has informed the Plaintiffs that no monies remain in the Fund;
80. As a direct and proximate result of the prior representations of the BRA, upon which the Plaintiffs relied in good faith, the Plaintiffs are now entitled to an accounting of all monies from the Back Bay Restorations
81. The allegations of Paragraphs One through Eighty are incorporated by reference?
82. On information and belief, the BRA has publicly declared that it is near bankruptcy, and is without sufficient funds to continue its operations;
83. On information and belief, the BRA, its agents, and employees, are under investigation by the Office of the Attorney General for alleged criminal activities in connection with the election and administration of former Mayor John Flynn;
84. On information and belief. Defendant Lago requested that City of Boston funds be given to the BRA to permit the BRA to continue its operation, and the transfer of such funds was approved by Defendant Menino;
85. Should the BRA declare itself bankrupt, or otherwise no longer have sufficient funds to continue its operations,
the monies belonging to the Plaintiff Association will be irretrievably lost and destroyed;
86. Unless this Court orders the impoundment of $2,000,000 of the funds of the BRA pending resolution of this matter, and the Association will suffer substantial and irreparable harm and injury.
WHEREFORE, Plaintiffs request that this Court;
1. Assume jurisdiction of this matter;
2. Set this matter to trial to a jury;
3. Upon a hearing, order the impoundment of $2,000,000 of the funds of the BRA pending a final resolution of this matter;
4. Order an accounting of all funds held in the "Westminster-Willard Affordability Fund;"
5. Declare that the Defendant BRA has engaged in an unfair practice within the meaning of C.93A
6. Enter a judgment in favor of Plaintiff Mandela Residents Cooperative Association for three times the amount held in the Fund;
7. Enter an order directing that the money judgment be placed in an escrow account to be maintained by HUD for the use of the Association;
8. Award Plaintiffs compensatory and punitive damages;
9. Award Plaintiffs their reasonable costs and attorney's fees;
10. Make any other order this Court deems appropriate.
Dated s _____________ By; _________________
James Dillon, Esq.
1 Billings Rd.
N. Quincy, MA. 02171
B.B.O.No. 547121
Attorney for
We have read the allegations of the foregoing Complaint, and they are true to the best of our knowledge, information or belief. Subscribed to under penalties of perjury this /^J$ day of July, 1995.
By: _____
Helen Aizprua, President, Mandela Residents / Cooperative Association /
By: ^^^^--^^^^^ A^phonse M6u^aa, ^ President, V&M Management

April 3,1996 TO THE CITY COUNCIL Dear Councillors:
Relative to Section 17F information request, passes by your Honorable Body on February 28. 1996 regarding the Boston Redevelopment Authority: please find the attached response.
Thomas M. Menino Mayor of Boston

Exhibit "D"
The BRA, along with its officers and employees, has been engaged in litigation commenced by V&M Management. Inc., the corporation that owns Westminster Willard housing project (also known as Mandela) and its. sole shareholder, officer and director Alphonse Mourad against it since 1986. The three primary cases involved are V&M Management. Inc.. v. Boston Redevelopment Authority Boston Housing Court No. 86-CV-21269: V&M Management. Inc.. v. Boston Redevelopment Authority, et al Suffolk Superior Court No. 89-6500-E; Alohonse Mourad v. Peter Dreier Middlesex Superior Court CA No. 92-6665.
The first case was brought by V&M against the BRA in August of 1986. The complaint sought a court order for the BRA to act on a request for approval of the sale of the Westminster Willard housing projects by V&M (for $5.5 million) to Shamir Construction Corporation, an entity owned by a Mr. Edmund Shamsi. It also sought damages against the BRA director (Stephen Coyle) personally and the BRA head of housing (Peter Dreier) for $7 million. The sale could not go forward without BRA approval because the complex is a Chapter 121 A urban renewal project
The second case was initiated by V&M management against the BRA. the City and the Department of Revenue of the Commonwealth of Massachusetts. In this case, V&M sought a ruling that it was not subject to M.G.L C.121A and that it did not have to pay C.121A excise taxes. It also sought a ruling that its constitutional rights had been violated because its was required to pay C.121A taxes.
The third case was a libel case brought by Alphonse Mourad personally against Peter Dreier for statements ha allegedly made to the press from 1989 through 1992. The statements complained of were largely responses allegedly given by Mr. Dreier to reporters who were writing stories about Westminster Willard a/k/a Mandela. There had been over the years numerous press releases, demonstrations, lawsuits and other newsworthy events concerning this project originated by the owner. For much of the period in question, Dreier was the spokesperson of the BRA on issues relating to the project.
In each case, the litigation was commenced by V&M or Mr. Mourad. not the BRA. In the first two cases, the court entered orders dismissing all claims made by V&M after years of litigation and before trial. In the third case, brought by Alphonse Mourad personally, he has elected to dismiss the case rather than complete pre-trail discovery. (Although now Mourad is contemplating restarting the case while still failing to provide the discovery.)
The only matter which remains for court action in these cases is the BRA'S request for an accounting and appropriate further court orders brought as a counterclaim in the Suffolk Superior case, where it emerged that apparently V&M and/or Mr. Mourad have taken out in excess of $2.5 million dollars from this low income federally subsidized
SDIR/69.RPT 060595/B
Exhibit "D"
housing project for non project uses, while simultaneously failing to pay any C.121A excise taxes (the outstanding amount being approximately $3.4 million), burdening the project wrth mortgage debt (in excess of $6 million), and generally failing to comply with the provisions of C.121A. (A more detailed description of each case follows.)
At an earlier point in the history of this project, when V&M was intending to sell the project to Shamsi. the BRA had offered, in the event of such a sale to Shamsi. to make available to the project some funds from an unrelated lawsuit involving Back Bay Restorations to ensure that the project remains affordable. That sale never took place and the funds were later reallocated to other activities involving affordable housing in the dty.
The BRA has been represented in most of the proceedings described above by Saul Schapiro. The fees are on a scale from paralegal to partner rates of $40.00 per hour for the former to $125.00 per hour for partner time. One hundred twenty-five ($125.00) dollars per hour is half of Mr. Schapiro's standard billing rate. The total amount of bills for the two cases brought against the BRA by V&M which will be described hereafter from 1988 through 1995, including expenses is $241,118.73. The total amount of bills for Mourad v. Dreier from 1992 to date. including expenses, is $76,469.95.
The BRA was represented in Bankruptcy Court relating to a petition filed by BBRC including the defense of an adversary proceeding and in a related, 1994, Norfolk Superior Courtcase by Saul Schapiro. The total amount of bills for the bankruptcy work including expenses, was $45.028.48. The total amount of bills for the Norfolk Superior Court case. including expenses, was $3,709.50.
There were also additional payments regarding Back Bay Restorations case to Attorney Alexander Kovel of approximately $49,000.00
SDIR/69.RPT 060595/B
To: File# From: Joe Murphy Date: November 8, 1994 Re: B.R.A-
On Wednesday, November 8, 1994,1 went to the offices of the Boston Redevelopment Authority, City Hall, Boston where I reviewed their Westminster Place and Willard Place files. I ordered copies of the 6A application under Chapter 121 for both projects as well as the first amendment to this agreement which will be available on Friday, December 9, 1994.
Note that there is little in their files regarding circa 1968 in these files. All ? documents of interest to this investigation were copied. I found no reference to any use of the $200,000 fund established in 1986.

* BRA owes Mandela Residents $2 Million fiollars
* The Tenants demand accountability of the funds
As former Senator Owens recently states: " As an advocate of tenants rights, I am requesting that the BRA put their cards on the table so that we can make a determination as to the amount of money the tenants should receive. At which point, a time frame for the transfer of ownership can be established." Senator Owens also noted that the BRA must keep its word in supporting a tenant cooperative at the Mandela Apartments.
The extension of Downtown Boston in the name of "Urban Renewal" means
Urban Removal for Lower Roxbury and Mandela Apartment Residents
WHEN: JUNE 29,1995 AT 6 PM
WHERE: BOSTON CITY HALL, COUNCIL CHAMBERS WHO: City Councilmen Saunders and lanella have invited:
Lower Roxbury Residents
Tenant Activist - Bill Owens, Former State Senator
Mandela Owner - Alphonse Mourad
Mandela Legal Counsel - Victor Aronow
Representatives from the BRA and the City of Boston
Buses wil leave Mandela, Mattapan, Mission Hill at 5:50 pm