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BRA releases findings of independent operational review and action plan for continued reforms

Jul 16, 2015

Restructuring of real estate and finance departments and elevating role of proactive planning identified as priorities

Director Brian Golden today released the findings of an independent operational review of the Boston Redevelopment Authority (BRA) and an action plan for addressing concerns that were uncovered during the months-long study. The review, commissioned last winter and conducted by McKinsey & Company, identified several areas in need of improvement for the BRA, whose leadership team has been working to reform the management, culture, and operations of the agency since last year.

Coming on the heels of a more limited analysis conducted by KPMG in 2014, this review forms the basis of a new action plan that Director Golden and senior staff at the BRA have begun to implement. The action plan calls for the elevation and restructuring of the agency’s real estate management department in order to optimize BRA-owned assets and generate new revenue from those holdings. The plan also highlights the need to continue to improve systems and implement a more forward-looking budget strategy within BRA’s administration and finance department.

The report’s findings suggest that the BRA’s planning division, which was the initial focus of the review, should add staff to support the proactive planning initiatives that are currently underway.

“As director, nothing is more valuable to me than an honest assessment of our shortcomings and strengths because it allows us to take a thoughtful approach as we implement reforms,” said Brian Golden. “We have embraced the challenge that comes with improving the way we do business, and this latest review provides the information we need to create a robust and positive plan for the future of the BRA. Change is already underway, and we are intent on delivering upon the rest of the action plan. This work will take time, but in the end I’m confident that it will lead to results for which we can all be proud.”

In comparing Boston to cities such as San Francisco, Philadelphia, Seattle, and Vancouver, the independent review found that the BRA does less proactive planning than many of its peers. Nearly all of the comparison cities have completed neighborhood plans, and most large cities engaged in comprehensive citywide planning. In order to strengthen the planning division, the BRA will hire five to six new planners to help support the Mayor’s Imagine Boston 2030 citywide planning initiative and the recently launched transit oriented planning studies in Jamaica Plain, Roxbury, and South Boston.

Through an informal survey of developers and community members, the consultants found that the BRA’s design review process varies greatly in the length of time and number of meetings necessary to approve projects. The timeline is partially contingent upon how responsive a developer is in incorporating design review feedback. However, the review findings noted several potential changes – such as clearly written best practices for developers and offline reviews to lessen the need for in-person meetings – that the BRA could consider implementing so that the process functions more smoothly. As a result of the BRA’s action plan, the urban design department has begun to track its performance in reviewing projects with the goal of streamlining the design review process. New leadership will oversee changes within the department.

A review of the agency’s finance department found “several gaps between the BRA’s financial processes and capabilities and what is typically expected from a finance department.” The report points to a lack of departmental budgets and insufficient annual strategic planning and budgeting. Basic documents such as balance sheets and annual audited financial statements were not always available in a timely manner for the independent reviewers or the general public.

While there is significant room to modernize financial systems and processes, the BRA is in a much stronger cash position than it was just six years ago. At the end of the 2009 fiscal year, the agency was operating with a $6.2 million deficit. Through a combination of staff and salary reductions and lean budgeting, that deficit has since been erased. The BRA now has approximately $18 million available for capital spending and other important investments essential to the agency’s long-term success. This money will help fund capital improvements for two significant BRA-owned properties, the China Trade Center, in Chinatown, and 12 Channel Street, in the Marine Industrial Park, to help make those facilities more attractive to potential tenants. $2.5 million of the $18 million has been allocated for unfunded liabilities, such as post-retirement benefits. And several million dollars will be held aside to create a stabilization fund for fiscal emergencies.

To address the department’s shortcomings, Director Golden will seek fresh leadership to take over the BRA’s finance operation. However, acknowledging the great strides that have been made to stabilize the organization’s balance sheet, he has asked the current finance director to remain with the BRA as a special assistant who will advise on continued finance and human resource reforms.

The BRA’s asset management division will also be restructured as a result of the operational review and subsequent action plan. The agency relies heavily on the leasing of properties to generate most of its revenue, and the BRA’s real estate portfolio is not configured to maximize the value of these assets. Just two individuals within the facilities and engineering division currently handle real estate management. While estimates suggest that the BRA owns 10 to 12 million square feet of undeveloped land and buildings, including roughly 100 parcels that are more than 20,000 square feet each, no comprehensive list of real estate assets exists. The review estimates that untapped lease opportunities could generate $6 to $8 million in new revenue for the BRA.

A new director of real estate will be hired, the search for which is currently underway, to better manage the utilization, marketing, and leasing of the BRA’s real estate portfolio. That person will build out a more professionalized department that will include the current facilities and engineering division. The new department will be responsible for developing a plan to grow the BRA’s real estate revenue by at least five percent per year over the next five years.

In an effort to improve morale among employees, many of whom felt the BRA lacked a clear vision when surveyed earlier this year, the agency began sponsoring more professional development opportunities, started an employee wellness program, launched a performance review system for staff, and is piloting an internal data dashboard to help departments track key metrics. Since taking charge of the BRA, Director Golden has organized three all-staff events to bring employees from different departments together, and he has held periodic lunches with staff this year.

The full report and a summary of the findings, along with the BRA’s action plan, are available below:
BRA Action Plan for Management and Operational Reforms
Executive Summary of BRA Operational Review
Operational Review of the BRA
BRA Action Plan Update: April 2016

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BRA releases findings of independent operational review and action plan for continued reforms

Jul 16, 2015

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