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Sox advisor vows to repay some debt, seeks aid

By Meg Vaillancourt, Globe Staff, 03/28/00

Under pressure from team officials, Red Sox development adviser Robert Walsh pledged yesterday to pay the state nearly $200,000 in late mortgage payments owed on a publicly subsidized housing project he helped develop.

But Walsh, who is involved in the Red Sox's proposed $600 million ballpark project, is also looking to City Hall to erase up to $1 million in outstanding city loans for three Boston development projects that he supervised. Two of the three debt-riddled developments that Walsh oversaw have ties to the team.

The city is owed money on the Latin Academy housing project, in which the Jean R. Yawkey Trust, which controls the Red Sox, is one of five limited partners, and an office project in Dorchester at the former St. Peter's School, in which Red Sox executive John Buckley was a limited investor. Walsh played a lead role in managing both developments.

But his push for forgiveness of the public debt comes at a sensitive time for team officials, who are expected within the next few weeks to request up to $250 million in city and state funds for their new ballpark.

Walsh stressed that he undertook the projects years before he and Buckley began working for the Red Sox, and said the projects were a victim of the real estate crash of the 1980s and early '90s. "This has nothing to do with the Red Sox," Walsh said last night.

While Walsh led all three developments, he had different partners in each one. Buckley, for example, was working as an accountant with Ernst and Young when he invested in the Dorchester office park.

Eventually the FDIC took possession of the property and sold the mortgage to another investor. Walsh said the development team still owes "about $200,000" to the city on the project, but said he and city officials are in talks about forgiving or "restructuring" the debt.

The Latin Academy project was financed in part through a Massachusetts Housing Finance Agency loan of more than $3 million and roughly $800,000 in city loans. As the Boston Herald reported last week, the project was 11 months delinquent and the state was owed roughly $200,000 on its MHFA mortgage.

As a limited partner, the Yawkey Trust was not liable for the overdue mortgage. However, apparently concerned about the impact of the delinquency on the team's plans, Red Sox chief John Harrington pressed Walsh to pay up. Yesterday Walsh notified the MHFA in writing that he would cover the overdue payments.

City development officials noted that the city often "forgives" loans when a project that serves a public purpose becomes burdened with too much debt. They also stressed that Walsh, a close friend and informal development adviser to Mayor Thomas M. Menino, is "not recieving any preferential treatment."

However, the delay in paying the state mortgage may prove costly when the team looks for public investment in a new ballpark on Beacon Hill this spring. "Clearly some damage has been done," House Speaker Thomas M. Finneran said yesterday when asked about Walsh's stewardship of the Latin Academy project. "This gives skeptics more ammunition."



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