Middle Line plan poses ethics issues for bidder

By Nelson Sigelman - April 27, 2006

The state ethics commission Monday sent an eight-page letter to John Abrams describing the limitations he would face as president and CEO of South Mountain Company, should he be chosen to be the developer of Chilmark's Middle Line Road affordable housing project.

In sum, the ethics commission found that for the purposes of the conflict of interest law, Mr. Abrams was a "municipal employee" in his role as consultant for the project. Because the Island Housing Trust, which was the only bidder to build the housing, plans to employ Mr. Abrams and his South Mountain Company, the conflict of interest law "imposes certain restrictions on you [Mr. Abrams] as a former municipal employee," according to an ethics commission lawyer who wrote the letter. The letter went on to cite four sections of the law that would pertain to Mr. Abrams's future relationship with the town.

[Copies of the state ethics commission letter and Mr. Rappaport's letter are available here]

Ron Rappaport, Chilmark town counsel, Tuesday reduced the ethics commission opinion, dense with the sorts of references and tortuous what-ifs that require a legal translator, into a one-page summary containing two options.

Mr. Rappaport said that in the event the contract is awarded to Island Housing Trust and South Mountain Company is the designer and builder, and if Mr. Abrams is designated as a special municipal employee by the selectmen, then "for all practical purposes, Mr. Abrams will be in compliance with the state ethics act."

If the selectmen decide not to designate Mr. Abrams a municipal employee, and South Mountain is the builder, then Mr. Abrams would be unable to appear before any Chilmark town boards on behalf of private clients, Mr. Rappaport explained.

A consortium led by the Island Housing Trust (IHT), which includes South Mountain Company of West Tisbury and the Dukes County Regional Housing Authority, submitted the only response to a town request for proposals to build 12 housing units, consisting of six privately owned houses and six rental units on 21 acres of town-owned land off Tabor House Road.

Mr. Abrams serves on the boards of the Island Affordable Housing Fund and the Island Housing Trust, and he is a shareholder in South Mountain Company.

Two of the three selectmen, Riggs Parker and Frank Fenner, questioned the proposal last week and said they were not prepared to accept it. Selectman Warren Doty said he had confidence in the people behind the proposal and urged acceptance.

With legal guidance from Mr. Rappaport, the three selectmen agreed at a meeting on April 19 to ask the IHT to extend its development proposal deadline for 30 days and to present selectmen with a revised proposal that addressed their concerns about town financing, rent affordability, and the possibility that Mr. Abrams might run afoul of the state ethics law.

The ethics question stems from a November 2004 $24,000 consultancy contract the town signed with the South Mountain Company and Keen Development Corp. of Cambridge for planning and consulting services to develop the Middle Line Road property.

At a meeting with selectmen last month, Mr. Rappaport explained that when the town hired Mr. Abrams as a consultant, it may have made him a municipal employee.

Because the feasibility study was an integral part of the RFP process, in effect Mr. Abrams might be seen to have been bidding on a project that he helped to create as a municipal employee, Mr. Rappaport said.

Mr. Rappaport said Mr. Abrams had sought an informal opinion from the ethics commission prior to submitting his proposal, but no major concerns were raised at that time. Mr. Rappaport said the state ethics commission wanted a more detailed submission from Mr. Abrams, prior to providing a more detailed ethics ruling in writing.

That ruling arrived this week. Yesterday, Mr. Abrams told The Times that he could not agree to any arrangement under which he was unable to represent private clients.

Mr. Abrams said that in 2004 he asked the same questions of the ethics commission and received a very simple answer and proceeded based on that opinion. "Where it leaves us is that if the town wants to award the contract to IHT, and they want us to be involved, then I will need to be a special municipal employee," he said.

The selectmen have so far been unwilling to designate special employees. Selectmen refused a request last month from Perry Ambulos that would have allowed him to serve on the affordable housing committee, while seeking to be awarded one of the available units.

Mr. Abrams said that without such a designation, he will be unable to do the project. "The selectmen will read the letter, and if that is what they think is the appropriate action, they will take it," he said, referring to Mr. Rappaport's cover sheet. "It is pretty simple. You have paragraph one and paragraph two. That's how I see it."

Mr. Abrams said that Middle Line has been a complex and time-consuming project. He said the issues Mr. Fenner and Mr. Parker have raised, while new to him, have to be settled so the selectmen can move forward.

Yesterday, selectman Warren Doty expressed frustration with the legal entanglements and complexity of the state ethics letter. "I think the lawyers at the state must be working by the hour," he said. "We asked them a simple question, and they gave us an eight-page response and took eight weeks to do it."

Mr. Doty, a member of the IHT board of directors, said the ethics letter answered one of the set of questions posed by the board. He said once the selectmen get answers to their other questions, they will be ready to consider the proposal.

Mr. Parker, a former corporate lawyer, provided another view. "The ethics opinion states the official position on the IHT, South Mountain conflict of interest dilemma, one of several thorny questions we have to address during the 30-day extension on the RFP submission," he said. "As much as we all want this project to happen quickly, the bottom line is that it has to be done right."

Mr. Fenner said he wants to move speedily to review all information and options to ensure a quality project for the town and the eventual tenants. In that way, the voters, who must eventually approve the proposal, would have the information they need to make an educated decision.

The entire proposal, including the use of Community Preservation Act funds and a 99-year lease to IHT, must still be approved at a special town meeting, yet to be scheduled.

Mr. Rappaport had previously furnished the selectmen with legal opinions regarding the town's use of CPA funds and the complications that could arise from the proposed arrangement for their use, in which the town hands the project over to a non-profit consortium, thereby avoiding the requirements of certain competitive bidding and construction wage laws.

Last week, selectmen asked that IHT return with a proposal that specifies that the town's contribution will be no more than $982,207, an amount specified in the original submission. IHT was also asked to reduce the amount of the proposed rents.