State, feds probe conversion of pair of Downtown Crossing buildings into apartments

From the report: Barred emergency exit; also note ladder on left instead of stairs. 4/29/10.

The state Inspector General's office found major problems in city oversight of a Temple Place apartment conversion in which the developer let people move into buildings with inadequate - and in some cases locked - emergency exits and without occupancy permits and for which he may have tried to hide renovations from inspectors to save on permit fees.

In a letter to city officials Inspector General Gregory Sullivan said his office's probe into the renovation of 21-27 Temple Pl. had been hampered by an unidentified Inspectional Services supervisor who refused to talk to investigators or turn over one key document, despite a state law that requires municipal employees to talk to his investigators unless they are claiming their Fifth Amendment right against self incrimination. The letter, quietly posted on the IG Web site last month, adds that the US Attorney's office and the FBI are also looking into the renovation project, which first came to public attention in 2009, when then mayoral candidate Kevin McCrea blogged about it.

Sullivan said the entire affair shows the city needs to change the way it accepts cost statements from builders, to avoid getting cheated on permit fees that are based on those costs.

According to the report, developer Michael McGough obtained building permits in April, 2009, for work valued at around $325,000. But:

During this investigation, an ISD Building Inspector informed the OIG that he believed that the owner had significantly undervalued the cost of the work at 21-27 Temple Place and that the cost of the work performed by the owner was more likely in the vicinity of 1 million or 1.5 million dollars. The Building Inspector also informed the OIG that the owner did not show the installation of a new elevator in the original plans submitted to ISD by the owner for this project. Moreover, according to the Building Inspector, the owner nonetheless installed a new elevator and covered it over with sheet rock to disguise it from view. Later, apparently after the elevator was discovered by the Building Inspector, the owner listed its cost at $110,000.00 without any supporting documents when paying an additional permit fee to ISD on 9/4/09.

It comes as no surprise to the OIG that the owner of this property likely undervalued his costs in connection with his renovation of the property in question. As you know, a Building Inspector was dispatched by your Office to 21-27 Temple Place in September 2009 to investigate a complaint that the owner had permitted tenants to move into the building without a Certificate of Occupancy. Upon entering one of the apartments, the Building Inspector discovered a person who had just come out of the shower. The person was working on his computer. The Building Inspector observed numerous personal items in the apartment which provided strong evidence that the person was living there at the time. The Inspector found similar evidence in another apartment. The inspector wrote a violation the next day against the owner. This Office is aware of the fact that the owner informed ISD that he paid for some of his tenants to stay in hotels when the building was not ready for occupancy. However, based upon the issuance of a violation by ISD, it appears that this explanation was unconvincing.

Based upon the information set forth above and additional information described in detail below, the OIG has strong reason to conclude that the owner of 21-27 Temple Place has not been forthcoming regarding his actual costs in connection with his work on this project.

The report continues people were allowed to move into the building despite the lack of adequate fire escapes from all floors - and that in some instances what emergency egress there was was via windows, rather than the doors city inspectors wanted - and that in other cases, the doors to the fire escapes were barred.

The truth is that but for the April 29, 2010 inspection of the rear of 21-27 Temple Place, this fire safety problem would still exist.

In its report, the Inspector General's office says the city should conduct "a thorough and comprehensive inspection of the premises" to make sure it's safe and inhabitable. Longer term, the city should stop the practice of verbal agreements between builders and ISD plan examiners and get everything in writing. Also:

The ISD should consider requiring all developers and contractors seeking building permits in the City to submit invoices and payment receipts for all work performed on each project to insure that the City is receiving the appropriate amount of permit fees for each project. The owners/developers should be required to certify by signature under pains and penalty of perjury that the submitted documents are true and correct and all inclusive of costs incurred to the best of their knowledge and belief.