The True Story of Simeon Bruner's Attempted Windfall Profit at the Hands of the Massachusetts Taxpayer

The Piano Factory, a live/work artists community located at 791 Tremont Street in the South End of Boston is facing its demise at the hands of its creator. Simeon Bruner, the architect who developed the property, has taken the tenants to court twice because they refuse to sign new leases with rent increases as high as 600%.

Bruner (together with his partner Leland Cott, President of the Boston Architects Society) has taken these actions because he wants a "return on his investment". His initial investment was only $50.00, and he is trying to get a return of as much as six and a half million dollars.

$50 INITIAL INVESTMENT: Bruner's partnership that provided the equity for the property is The Piano Craft Guild Associates. Their initial investment was only $88,060 (raised through saleable tax credits!) for a mortgage of $3,382,916. This was no ordinary mortgage, either: through a sweet deal with the State, a subsidy provided payments on 75% of the mortgage, effectively reducing the interest rate for this portion of the mortgage to 1%. In short, taxpayers provided a large portion of the financing for the Piano Factory, in return for its use as an affordable artists community. Indeed, the Massachusetts Housing and Finance Agency (MHFA), principal funders for the deal, made less than ten of these types of mortagages in the entire state before changing their policy. Not everyone had the chance Bruner got!

Even though he provided very little capital to the property, Bruner has made substantial profits. By selling interests in the partnership as part of a syndication of the tax depreciation, Bruner's corporation received approximately $700,000.00 over the course of a four year period. Other money was garnered through the management fee. Bruner is conveniently the President of the management company, Shoreline Corporation, which has been earning approximately 6% of the operating costs for the last 24 years.

WALKS AWAY FROM DEAL: While these profits would seem substantial enough, Bruner's motivation for much more than doubling the rents and trying to destroy the affordable artists community financed by taxpayers appears to be the desire to make millions more. In 1994, Bruner willingly entered into an optional Federal program, LIPRHA, whereby the Federal government provides money for the sale of properties to the tenants. The tenants at the Piano Factory were excited about the prospect of ownership and worked hard to meet the requirements of the LIPRHA process. As part of this process, an appraisal of the Piano Factory was commissioned by the MHFA.

This appraisal was for ten million one hundred thousand dollars. Had this amount been the sale price for the property, Bruner's corporation would have reaped over three million dollars. To the tenants' dismay, Bruner refused to sell the property for this amount, claiming he had commissioned a report appraising the property at seventeen million. By trying to more than double the rents at the Piano Factory, he feels he can attempt to sell the property for seventeen million or place a second mortgage on the property for a total debt amount of seventeen million. If this were to work, his corporation would pocket close to seven million dollars, most of it financed by the Massachusetts taxpayer who had no chance to close a deal like this... Not bad for a $50.00 investment! To the dismay of the MHFA who wanted to keep the property for it's originally intended purpose-- multifamily, three-tiered-rent level affordable housing--Bruner walked away from the arrangement.

HERE COME THE JUDGE, HERE COME THE JUDGE: As mentioned, Bruner took the tenants to court twice. Boston Housing Court Judge E. George Daher twice ruled that existing leases are valid. He stated that leases do not become invalidated simply because Bruner prepaid his mortgage from one lender-- MHFA-- and refinaced through Grove Bank. A lease is a lease, he said. (He went on to quote an Egyptian stone tablet from 3,000 years ago, and expressed his wish that by this time lawyers could have drafted a valid lease.)

In a telling example of how reprehensible are these activities of Simeon Bruner and Shoreline, the MHFA has temporarily suspended all prepayments of its buildings, and quoted directly from the Bruner/Shoreline Versus Tenants court cases!

SOCIALLY CONSCIOUS? One of the most shocking details is Bruner built his career as a "socially conscious" architect, developing and refurbishing affordable housing. Bruner cut his teeth with the Piano Factory, acquiring a reputation as the developer for socially conscious public projects. Through his reputation from the Piano Factory, Bruner was awarded a 10.5 million dollar contract from the Cambridge Housing Authority to rehabilitate a failed public housing project, the Washington Elms. As recently as 1990, Bruner's architectural firm was referred to as "remain[ing] committed to housing for public-welfare reasons." (Additionally, Bruner's partner Leland Cott is a former Peace Corps volunteer.) Unfortunately, it looks like the public-welfare recipient in the current Piano Factory situation is Bruner himself.

Piano Craft Guild Tenants Association

791 Tremont Street, Box T

Boston, MA 02118

617.536.6094

pcgta@geocities.com

WHAT YOU CAN DO:

Write Simeon Bruner, tell him what you think about what he's doing. Or phone him-- ask to speak directly to him. Simeon Bruner, 130 Prospect Street, Cambridge, MA 2139 617/491-2320 phone, 617/876-4002 FAX. Be polite but specific.

Write Governor Cellucci and voice your opinion for affordable housing, and tell him to restore individual-city rent control options (home-rule petitions.) Or phone him; ask to speak to him personally. Governor Cellucci, The State House, Boston, MA 02133. 617/727-3600, phone.

Send a donation to help with our legal costs. Make checks payable to: PCGTA, (which stands for Piano Craft Guild Tenants Association,) Mail it to the address above.

Buy a T-shirt: $15.00. High quality, bright red. Front: "THE PIANO FACTORY: Home is Where the Art Is" in black printing; back: "GREED" in white printing, with the international "NO" symbol-- a circle with a slash-- superimposed over it. Please include size, home phone number, plus $3.00 to defray postage. Make checks payable to "PCGTA". Thank you.

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