Massport makes push for diversity

The proposed $700 million Headquarters Hotel Project would be sited between Summer Street and Interstate 90 (the area in red above). (Photo: Photo Courtesy Massport)

The state’s massive transportation authority, Massport, may be best known for running Boston Logan International Airport and handling the local shipping ports, but that is not all it does. With well over 300 acres of real estate in addition to Logan, the agency has a big hand in some of the major development going on in Boston. Now its leaders are making a historic diversity stand with a new project to build a headquarters hotel near the Boston Convention & Exhibition Center.

In his first media interview about the proposed $700 million Headquarters Hotel Project, which is slated for 30-acres of Massport-owned land near the convention center in South Boston, Massport CEO Thomas Glynn does not beat around the bush about what his agency is hoping to do on the diversity front. They want to shatter the status quo and set a new standard for all future Boston development.

And he is serious.

While most large development projects, particularly any with state or federal ties, are going to have diversity and inclusion components — meaning targets to hit for the percentage of minority-owned or women-owned small businesses that are involved in the project — this number often hovers at only around 5 percent.

Glynn and Massport have firmly established 25 percent as the project’s diversity goal. This is more than just an improvement. This is an unprecedented leap forward.

So why would Massport make such a move when reaching for even 10 percent diversity would be celebrated? Glynn and his leadership team at Massport say they are in a unique position to have an impact on how diversity in development is handled and how Boston can set the standard for the rest of the country.

“We want to be a game changer on this issue. We want to send a signal that we are serious,” Glynn said. “The real issue is we are a public agency and we should be advancing the public agenda and the public agenda is to give everybody a chance to have a seat at the table.

“This is how we want to do business,” Glynn added. “So maybe as opposed to [Boston] being seen sometimes as a city that is a little bit slow, maybe now we will be seen as a city that is leading the pack on some of these kind of issues.”

The Headquarters Hotel Project is tied in with the proposed 1 million-square-foot expansion of the Boston Convention & Exhibition Center, which is designed to allow the center to host an additional 15-20 events every year and generate an estimated $184 million annual economic impact.

State legislation approved $1 billion in funding for the expansion last summer. Currently, the funding is on hold, but officials expect it will eventually be made available. Early projections were that the expansion would be completed by 2019. Either way, the Headquarters Hotel Project is not reliant on this funding and is continuing to move forward.

Building equity

Massport is working with the Massachusetts Convention Center Authority on the project and the plan is to build a 1,000-room-plus hotel that can help handle the additional big events at the convention center, which could bring the need for as many as 1,000 additional rooms per night during big events. The project also includes a large parking garage and possibly another smaller hotel.

The fact that Massport owns the land for the proposed project on Summer Street, directly opposite the convention center within the South Boston Waterfront District, gives the agency the bargaining chip to make such high diversity demands.

Last fall, Massport began the process of soliciting bids for the project. In February, they received six different submissions — all demonstrating they could hit the 25 percent diversity bar.

Massport now begins the arduous task of sorting through the proposals to figure out who is the best developer and hotel brand to take on the project.

James Doolin, Massport’s chief development officer, predicts they should have a recommendation this summer. Both the board of Massport and MCCA will make the final decision on who gets the green light. The hope is the project will break ground in 2016 and be finished on track with the convention center expansion in 2019.

Integrated approach

Massport board member L. Duane Jackson, a member of the real estate development and investment firm Alinea Capital Partners, is another driving force behind the diversity efforts on the Headquarters Hotel Project.

A veteran of large-scale development, Jackson knows that minority-owned and women-owned businesses often are on the outside looking in on such lucrative projects. He sees it as imperative that Massport does not continue this kind of business as usual.

Even beyond the significant call for 25 percent inclusion, Jackson says the effort to have diversity participation in all levels of the project — from development, financing and ownership to design and construction to hotel operations — is what really sets it apart.

He credits Massport’s leaders for working to get this done. It’s not a new idea, but he calls the opportunity for a state agency like Massport to make it standard practice “revolutionary.”

“The issue now is that we are trying to institutionalize it. And we are trying to say this is the way we will do business in the state of Massachusetts, in the City of Boston. That has never been done before,” Jackson said.

“We have never been in this space where we have advocated for participation across the entire spectrum as a public agency — equity, professional services and workforce,” he added. “Secondly, this is the first time where we have placed diversity on equal footing.”

As to establishing a challenging 25 percent number, Massport’s leaders say it was put in from the start so everything done on the project from day one has had that number in mind.

Kenn Turner, director of diversity and inclusion at Massport, was involved from the beginning and he will function as the watchdog. The MCCA will also work with Turner to monitor the diversity aspects of the project.

“It is about treating diversity as a business imperative, so every step of the way we have been engaged,” Turner said. “We have been included from the ground floor. Nothing happens on this project that we are excluded from or not a part of — every step of the way.”

On March 23rd, Massport sent a letter to the editor to clarify their position on their diversity plans. Read below:

Diversity given equal weight

I would like to clarify a recent article in the Bay State Banner (Massport makes push for diversity, March 11, 2015) in regards to the standards that the Massachusetts Port Authority has established for diversity in the Headquarters Hotel construction project. While, as stated in the article, Massport “wants to shatter the status quo and set a new standard for all future Boston development,” in terms of diversity and inclusion components, Massport does so by ranking diversity and inclusion in its evaluation criteria equally with all other criteria, not by, as stated in the article, having “firmly established 25 percent as the project’s diversity goal.”
As the article duly notes, what distinguishes this project is that Massport is making an “effort to have diversity participation in all levels of the project — from development, financing and ownership to design and construction to hotel operations.” The ability of proposers to fulfill a commitment to participation in these elements will be accorded equal weight at the evaluation stage of the process. Massport’s efforts on diversity and inclusion issues are both permissible and practical, and we remain very optimistic about the outcome of these efforts.

Matthew Brellis
Director of Media Relations
Massport