Recent news that Gov. Deval Patrick’s administration was considering mothballing its so-called Super-MEPA pilot program shouldn’t have come as a great shock: in its first year, it attracted a single participant.
What is surprising is the amount of disagreement inside the state’s development community about why the voluntary integrated permitting program has fallen on its face.
More than a year ago, the administration offered developers a bargain. If the developers were willing to offer state regulators details about their projects earlier in the permitting process, the Massachusetts Environmental Policy Act Office (MEPA) would expedite participating projects’ environmental reviews. MEPA staff would also put officials from other state agencies into the room with the developers, allowing the agencies to run their project reviews concurrently, and speeding state permits for which MEPA approval is a prerequisite.
MEPA Director Alicia McDevitt told an Environmental Business Council breakfast in late June that while the administration had expected up to 10 projects to run through Super-MEPA during its first year, just one development project, Trinity Financial’s Hamilton Canal in Lowell, has gone through the process.
“We haven’t exactly had people lined up outside our door to participate,” McDevitt said. As a result, she added, “We’re wondering aloud whether to continue with it.”
McDevitt said Trinity told her office “they thought the process was really helpful and useful,” and the “state agencies were getting better information” about the project. She speculated that the national economy’s deterioration may have made participation impractical for some developers, as the pilot requires developers to “front-load the project with planning details,” which, in turn, “requires the proponent to put additional resources up front.” That’s a difficult request at a time when cash is scarce, McDevitt said.
Good Idea, Bad Timing
“I think it has more to do with the economy than anything else,” said Stephen Kasnet, CEO of Raymond Property Co. “The idea of the project was excellent, but it surfaced at the wrong time in the cycle. There’s not much going on. My sense is they’ll try it again when we’re in a normal cycle.”
“There’s not a lot of development activity these days,” concurred James Keefe, president of Trinity Financial. “The window for large-scale projects closed in July 2006. There aren’t a lot of major development deals being conceptualized and implemented. We fell into a unique window.”
Collapsing demand, falling rents and scarce financing have certainly slowed the pace of new MEPA filings. Year-to-date filings of environmental notification forms, the first step in a project’s environmental review, are down 25 percent.
Still, MEPA has some large, notable projects on its plate this year, including Plymouth Rock Studios, two new towers at the Prudential Center, a significant expansion of Patriots Place in Foxboro, Raymond’s Government Center Garage redevelopment, and the Chiofaro Co.’s proposed Harbor Garage towers. Taken together, these projects represent several million square feet – and billions of dollars – of new construction.
A number of sources in the state’s development community faulted fundamental design flaws, in addition to the anemic development environment, for Super-MEPA’s lukewarm reception.
Permitting isn’t cheap. Super-MEPA participation would add to the cost of permitting by requiring developers to produce detailed construction-level drawings early in the approval process. The problem with that proposition is MEPA normally runs concurrently with local project reviews. Since projects routinely change while being vetted at the local level, developers feared that running advanced details through Super-MEPA would waste both time and money.
“Developers didn’t want to spend money up front without having a clear sense that what they were proposing would be approved,” said Paula Devereaux, an attorney at Rubin and Rudman. “I would applaud MEPA for trying to do this, but it turned out to be too expensive.”
“Local approvals often change the design, especially if it’s a phased project” added Matthew Kiefer, a director in the real estate development and land use law practice at Goulston & Storrs. “Proponents hesitate to spend extra money to advance a design through Super-MEPA before local approvals are in place. You could spend millions on architects, engineers, environmental consultants, and lawyers, and if the project changes, the state approvals would need to be done again, so you wouldn’t realize the full benefit.”
What Controversy?
A proposed Back Bay tower, for instance, could easily lose 10 stories in city permitting, rendering the detailed planning of those 10 stories worthless. The same fear applied to dense suburban proposals. Efficiencies gained in speedier permitting could easily be outdone by duplicative design requirements. In most developers’ analyses, Super-MEPA could only expedite non-controversial projects. And in Massachusetts, non-controversial developments are few and far between.
“Their criteria for projects was limiting,” said Gregory Sampson, an attorney with Robinson & Cole. “They were more for non-controversial projects. Those are not the types of projects that would benefit from integrated review.”
Developers also steered clear of Super-MEPA because the pilot program lacked teeth.
“A lot of people in the development community had concerns that there was no way to force the state agencies to be bound by the process,” Sampson said. “There was never any requirement to commit to the time periods issuing decisions, or having their comments be binding.”
Even so, Raymond’s Kasnet said he hopes the pilot program becomes a permanent staple in the administration’s permitting arsenal. And Trinity’s Keefe said Super-MEPA helped his planners identify and confront potential problems earlier than they normally would have.
“My experience was, there was a real sense of urgency and sensitivity to keep the project moving,” Keefe said. “I think the special status helped. It’s an enormously complicated project – a lot of moving parts. We got through it and lived to tell about it.”
Keefe also suggested that if developers do their local legwork prior to their formal project filings, there shouldn’t be concerns about the decoupling of the state and local approval processes.
“We really worked hard to ensure that there were no issues at the local level that would bog things down,” he said. “It’s a style point, to do the process, be ahead of the community. The process forces you to look at where the bottlenecks are. You really don’t want to find that out in the process. The fact that [Super-MEPA] requires more details – the devil’s always in the details. You want to front-load it as much as possible, because if you don’t, you’re going to run into problems in the process.”
