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“Non-profit” MIT takes a quick $320 million out of latest Tech Square real estate deal
According to the Bay State’s leading real estate weekly, MIT will sell Tech Square in Area Four to a California-based investment company for more than $600 million. (Joe Clements, Banker and Tradesman 6/26/06)
MIT’s real estate manager had earlier remarked, “It's a great time for us to be taking money out of the deal.” (Thomas C. Palmer Jr. Boston Globe 1/14/06)
And what a deal! Five short years ago, MIT paid “just” $279 million for the same property. That was the second time MIT bought the land on which Tech Square is now located. Thirty-seven years earlier, the Institute had bought it for one dollar.
Just over fifty years ago, hundreds of tenants were being evicted from there as part of an urban renewal and highway master plan to transform Cambridge from a working class city to a university city.
“It is hard enough to find good teachers,” wrote Harvard student Christopher Jencks in a February 1956 issue of the Harvard Crimson. “Inducing them to live in slums is next to impossible… the only alternative is to attack the existing pattern, to develop a new pattern through urban renewal.”
Jencks described the city’s eviction of the poor people who lived in the area east of Portland Street as “the most encouraging sign” that the City had the political will to carryout this ethnic cleansing operation.
In 1955, the property was seized by eminent domain. The section called the Rogers Block was demolished right after the last 133 families were evicted. After that, it was a vacant lot for eight years.
Finally, in 1964, the Cambridge Redevelopment Agency sold the property to MIT for one dollar. MIT partnered with The Prudential, and developed it as Tech Square. Yep, kids, and that's how eminent domain works to this very day.
For many years, Tech Square’s “anchor tenant” was the mighty Polaroid Corporation. By 2001, Polaroid wasn’t so mighty—it was defaulting on loans and heading for bankruptcy. After carefully planning how best to cheat its thousands of faithful employees and retirees out of their “lifetime” medical insurance and pensions, the Polaroid Corporation bailed out of Cambridge and Tech Square. The Board of Directors equipped themselves with golden parachutes before jumping off .
A few years earlier, Beacon Capital Partners, a huge real estate firm, had bought Tech Square from Prudential/MIT. In 2001, as Polaroid was departing, Beacon made a nice profit by selling it back to MIT for $279 million.
The Beacon Companies’ owners are among the Democrat party’s most generous financial supporters.
MIT and its associated “spin-off” corporations constitute one of the largest defense contractors in the U.S. At least two-thirds of its employees are directly engaged in research, largely underwritten by the U.S. military.
In December 2004, Cambridge City Manager Robert Healey signed an agreement committing the City to a 40-year Payments In Lieu Of Taxes (PILOT) deal with tax-exempt MIT, without first submitting it to the city council for review.