MIT Faculty Newsletter  
Vol. XXIII No. 5
May / June 2011
A Letter to the Class of 2011
A Call for Nominations to
Faculty Newsletter Editorial Board
An MIT Housing Dream Finally Comes True
Can Nuclear Disarmament Become a Reaility?
Faculty Governance @ MIT:
Strengths and Future Challenges
Faculty Priorities for MIT
Thanks to the 150th Staff
Technology Enabled Transformation
in the MIT Learning Experience
Interim Report on the HASS First-Year Focus Pilot Program, to be Renamed the HASS Exploration Program
Sam Allen New Chair of the Faculty
Preventing Utter Devastation in Tornado/Hurricane Prone Areas
MIT Subject Evaluations Now Online
MIT Class of 2015: Incoming Freshmen Stats
Center for Work, Family & Personal Life Changes Name
Sponsored Research Expenditures
(2001 – 2010)
Printable Version

An MIT Housing Dream Finally Comes True

O. R. Simha

The dream was to create a residence close to the campus where members of the MIT family, across the age spectrum, could build a convenient and comfortable community. That dream, reflecting the best of MIT’s culture of mutual support and collaboration, is finally coming to fruition, though not without considerable struggle. The courage and tenacity of a small cadre of faculty, staff, alumni, and friends, who would not let the dream die, deserve a special salute as they begin finally to move into their new homes at 303 Third Street in Cambridge.

incremental cost over budget

303 Third Street, Cambridge
(click on image to enlarge)

The story of this amazing effort begins in the spring of 2003 when a group of MIT and Harvard faculty and alumni came together to explore the idea of creating a cooperative residence where like minded people could age in place and that would allow young people, just starting out, the opportunity to live close to the campus and more easily become part of MIT’s intergenerational mentoring tradition.

Organized under the banner of University Residential Communities (URC) in the spring of 2004, and led by President Emeritus Paul Gray, nine founding members from MIT and Harvard moved forward.

O. R. Simha, MIT’s long-time Planning Director, agreed to serve as executive manager; Neil Harper, PhD from Civil Engineering, agreed to serve as treasurer; and Carl Sapers of Harvard agreed to serve as manager and legal guru.

Enthusiasm for this idea from MIT, Harvard, MGH, and the larger academic community grew rapidly. Over 100 MIT families signed up and made a modest payment to hold a place for the prospective development.

Also in 2004, URC teamed up with the Beal Company who provided the professional services and working capital that we needed to proceed.

URC sought the help of MIT President Vest, and later President Hockfield, from whom we received sympathy but, on the advice of their treasurers, no substantive support.

In contrast, after World War II, MIT’s treasurers were creative in their support of faculty and presidential calls for increasing the housing community around MIT. One such effort resulted in the development of 100 Memorial Drive. More recently, however, we have found that MIT treasurers and investment managers have looked upon initiatives and proposals to use sites owned by MIT or to utilize the Institute’s fiscal leverage for housing projects with little interest and, in some cases, outright hostility.

In 2005, we began the search for sites during a highly competitive real estate environment. We bid on several sites, but were often out-bid by a narrow margin by better-financed competition. In the late fall of 2006, however, representatives of the New York Extell Corporation, the developers of an apartment complex at 303 Third Street, called on us. Their buildings had been designed and approved by the City of Cambridge; they were ready to go into construction and they wanted to explore our participation in their venture. We began a negotiation that finally resulted in an agreement signed in April 2007.

The agreement included many of our suggestions for improvement in the design of the units and quality of the building: we increased the size and variety of the apartments and aligned them more closely to the needs of our community. But the agreement that had taken so long to negotiate meant that we would miss the primary sales season for homebuyers that begins in the spring.

On June 11, 2007, after a public presentation at the Broad Institute, sales began, although the developer had not fully developed the sales contract materials and had not yet provided, as promised, a sales office. In spite of that, the URC/Beal team began to accept agreements from buyers who were enthusiastic about the building at 303 Third Street, which they could see was now under construction. But time was not our friend. The economy had begun to slow and families eager to join this enterprise were worrying about selling their current homes. Still, interest in the project grew and sales increased, although challenges continued apace.

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But just as we were getting started, the original Boston partner in the developer’s team, the person with whom we had negotiated our agreement, decided to leave the company. We now found ourselves dealing with new partners who did not necessarily share our vision. We began to notice evidence of their interest in unraveling our agreements. However, the strong interest from the university communities in the idea of a cooperative residence continued to bring forward interested buyers. But, as we began to make good progress on sales, out of left field came a dispute about the rights of Massachusetts residential cooperatives to choose their members. Uncertainty about pending legislation governing coop status did not help us. Happily, the issue was finally settled in favor of existing coop legislation and we could once again move forward.

A key feature of our agreement with the developer was that we would agree to sell enough units at milestone dates to assure that the project would be successful. The first of these milestones was in March 2008, the second three months later. Although we were able to make the first milestone, we were shy of the target at the second. But being so close to our goal, we put our faith in earlier indications that MIT would be willing to buy a number of units to be held for Institute visitors. We presented a proposal for the acquisition of apartments to President Hockfield and Provost Reif, who were sympathetic. However, the Institute’s Executive Vice President and Treasurer needed to make the call. Unfortunately, too late to meet the second milestone, we heard that this was not to be.

While disappointed, we took heart in the fact that even though the rate of sales had slowed, it had continued at a rate better than any other project in the city and that the reservation list continued to grow. While we now faced the prospect of losing some of the amenities for which we had initially negotiated, such as control of commercial space for a restaurant on the ground floor, we worked hard to make the case that, as we were reaching out to other university community members in the Boston area, we would ultimately succeed in selling all of the units.

All through the summer and fall the original developer, the Extell Corporation, encouraged us to believe that they would stay the course with us. We only later realized that their partner, EQR of Chicago, the owner of the rental apartment building that made up the other half of the project, was pressing to acquire sole ownership of the project and was quietly seeking to end our ability to sell units so that they could take over the entire project as a rental building. This divergence of interests between the two owners was finally resolved when EQR bought out Extell.

Then, on November 21, 2008, the managers of the URC were told by EQR that they could not sell any more units, that the 16 buyers who had reservation agreements would have those agreements cancelled, and that the 38 families who already had purchase contracts were invited to give up their contracts and have their down payments returned.

Our community was stunned by this action and gathered together to formulate a response. Some of the buyers felt they needed to move on with their lives, while others were anxious to have their deposits returned so that they could find other solutions to their housing needs. Several buyers had developed serious health problems during this stressful period and were regretful about leaving the fold as they looked for other alternatives close by. However, a phalanx of about 15 individuals and families decided to stand and fight.

By early 2009, our group had retained legal counsel and hoped for a rapid resolution in the courts. Sadly, our hopes were dashed as the case was caught up in delays generated by the developer’s attorneys. Finally, in April 2010, a Superior Court judge determined that the developer’s arguments were without merit and that they were in breach of contract. This decision was followed by a judgement on June 30, 2010 that provided for specific relief requiring the developer to promptly execute the purchase and sale agreements the buyers had contracted for.

When a couple of buyers decided that their delays had been too great and health issues prevented the completion of their purchase, the developer pounced. EQR created the impression that the buyers were not really serious and did not have the resources to buy their units. ERC also raised numerous other specious arguments designed to delay the process and confuse and weaken the determination of the group to realize their goal. The judge, in an effort to be responsive to the developers’ last ditch complaint, allowed that if fewer than six buyers were prepared to complete their purchase, the defendant could seek a stay of the entire process.

Instead of responding to the sprit of the judgement, the developer sought to impede the execution of agreements through a series of maneuvers that were both crude and clever. In March 2011, two years after litigation commenced, the buyer’s group asked the judge to find EQR in contempt of court, which would enable the judge to impose punitive actions unless the developer completed the steps that would allow buyers to execute the purchase of their units.

In open court on April 5, 2011, the judge chastised the developer for unnecessary delays and instructed their attorney to execute purchase and sale agreements without delay and to report no later than April 21 on their meeting the requirements of the judgement.

The developer finally relented and the first completed purchase was made on April 21, 2011; it has been followed rapidly by others. Happily, the local managers of the building have been warm and welcoming to the new owner-residents and there is every indication that living at 303 Third Street will be friction free.

By now, the determination of this pioneering group has resulted in an extraordinary commitment both to one another and to the creation of a real university community at the site. This goal, for so long delayed and very nearly throttled so many times, was achieved by an extraordinary group of MIT families and friends who, by their willingness to commit their time and treasure to work toward creating a humane community adjacent to the MIT campus, are owed a well-deserved tribute. Although this beginning falls somewhat short of our original dream, we believe our new community will thrive and grow over time and ultimately not only represent a dream fulfilled, but also be a model for many more such efforts, helping to make MIT a more welcoming and supportive community.

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