Harvard Treats Tenants Unfairly

As a major landholder in Cambridge, Harvard Planning and Real Estate (HPRE) is responsible for much of the financial dealings between Harvard and local merchants and tenants. Its recent decision to transform the Holyoke arcade into a Harvard-oriented service area has been implemented in a manner that is at best negligent and at worst deceptive.

At present, the Shops By Harvard Yard are comprised of Harvard-related stores, privately owned stores, vacant stores and roughly 10 kiosks. As of July, all kiosk leases and some store leases will not be renewed. The arcade will then be renovated, and when it reopens, it will consist almost entirely of university-related shops and services. Some private stores that "complement" the Harvard ones will also occupy the arcade, according to HPRE Director of University and Commercial Properties Scott Levitan.

When viewed strictly financially, this decision is understandable. According to Levitan, the kiosks and stores have only been earning 27 percent of what is expected of them.

According to context provided by the Holyoke merchants, however, HPRE's decision comes in the wake of a string of false impressions which may have been intentional.

When the arcade first opened in the fall of 1993, HPRE--which was then Harvard Real Estate (HRE)--went out of its way to entice merchants to the arcade by creating the impression of considerable retail potential. HPRE wined and dined prospective merchants and threw a huge gala opening. Irma B. King Licorish, proprietor of the Caribbean-African Creations kiosk, said she feels Harvard "enticed us in here under false pretenses."

The kiosk leases are valid for the short time period of three months, a fact Scott Levitan stresses. However, every single merchant I talked to said that no businessperson is going to accept such a lease and make an initial investment unless he or she gets the strong impression that there is long-term potential for his or her business. Licorish, J.B. Jain, who owns the Watch Works kiosk, and Doina I. Contescu '89, who co-owns the My Dog kiosk, all said they were told that they could renew indefinitely as long as they did well. (Mr. Levitan denies that any kiosk owner would have been told this.)

Renato D. Reis, who owns Renato's men's accessory store, went through six months of interviews and invested $60,000 in his 180-square-foot store because he received a similar impression of longevity. He will lose his entire investment when his lease expires.

This strong impression was not shared solely by the shop owners. Larry Kerns, who was leasing manager for HRE when the arcade opened (he quit in August of 1994) says the financial analysis for the Shops By Harvard Yard was done on a 20- to 30-year-basis and that the arcade was "definitely not a short term project. I don't think it makes any sense for a real-estate developer to plan on such a short basis." He adds that he was "shocked" when he heard it was closing.

Given the above facts, HPRE's decision to cancel so many leases comes in extremely bad faith. Harvard is first and foremost a university, not a corporation, and should not use the community in such a manner. Levitan mentioned that the kiosk owners who are leaving are being given a six-month grace period and help in relocating, but this hardly seems to compensate for the loss of their initial investments and the disruption in their lives.

The truly troubling aspect of this, however, is that there is evidence that HPRE continued to deceive merchants as to the longevity of the project even after it knew that the kiosks and some stores would be forced out.

According to Levitan, HPRE only began to seriously rethink the mission of the arcade this past November, and the final decision to "wind down the kiosk program" was announced at a meeting in late January. However, Reis and Contescu said they believe this is untrue.

Reis' lease became eligible for renegotiation last October. In late November he finally met with Levitan, who told him that his lease would not be renewed and that in fact no leases would be renegotiated. But Contescu's My Dog kiosk first opened for business in late November, and she was told nothing of the intended closing. In fact, when she expressed concern about the brevity of the kiosk lease, she was told that it was actually to her advantage because it gave her an easy out in case her business failed, and that she could renew indefinitely if she did well. When questioned about this, Levitan replied that both Reis and Contescu were misinformed, and that Renato could not possibly have been told about the closing because it hadn't really been discussed yet.

It is possible that the differing accounts I have related are due to simple miscommunication. Even if this is true, however, Harvard has still acted in extremely bad faith by terminating the project so abruptly. Obviously, a healthy endowment is necessary for the well-being of the University and its members, but Harvard has the inherent responsibility to balance its financial dealings with social responsibility. In this case, that balance seems sorely lacking.

David H. Goldbrenner's column appears on alternate Fridays.