This story ran on page B1 of the Boston Globe on 8/1/2002.
© Copyright 2002 Globe Newspaper Company.

Massport exec discloses links to developers
Hertz recuses himself from their projects

By Sean P. Murphy, Globe Staff, 8/1/2002

The Massachusetts Port Authority announced yesterday that George K. Hertz, the agency's new deputy executive director, will not involve himself in some development issues in the Seaport District, where Massport owns a huge swath of land, because Hertz has a long business relationship with two Massport-designated waterfront developers.

''Mr. Hertz is inclined to not involve himself in any issues'' involving Fidelity or The Drew Company, said Jose Juves, a Massport spokesman.

Hertz decided to recuse himself ''for the sake of appearances,'' Juves said, adding that development on the waterfront by Fidelity and Drew ''is a minor part of what Massport focuses on.''

''It certainly has nothing to do with the day-to-day activity of the authority. It is not something George Hertz has responsibility over,'' Juves said. ''In the unlikely event some issue comes to him, then he is inclined to remove himself from the equation.''

Hertz's business relationship with developer John Drew was not publicly disclosed when Massport chief executive and executive director Craig P. Coy recommended Hertz as his chief deputy at a board meeting July 18.

However, Massport board members were given a letter of reference from Drew on behalf of Hertz, which cites their long relationship, according to Massport officials familiar with Hertz's application.

Massport declined to release the letter.

Hertz's business relationship with Drew dates at least to 1986 when they worked together to develop the Great Woods Center for the Performing Arts in Mansfield, now known as the Tweeter Center.

Drew, as president of the two Fidelity Capital companies then working on development of the World Trade Center Boston and the Seaport Hotel, both on Massport property, vouched for Hertz when Hertz joined Fidelity Capital in 1987, Drew said in an interview.

While at Fidelity, Hertz was not involved in waterfront ventures, but instead concentrated on human resources, communications, and insurance enterprises, according to interviews and Hertz's resume.

Vivien Li, executive director of the Boston Harbor Association, a nonprofit watchdog agency, said she was concerned about the way Hertz was selected.

''It doesn't sound like they did a nationwide search,'' she said. ''In these situations, disclosure of past relationships is key.''

Drew, besides being president of World Trade Center Boston and the Seaport Hotel, is codeveloper with Fidelity Investments of the two office towers next to the hotel.

The Drew Company and Fidelity Investments also are the Massport-designated developer of an approximately 1-acre parcel south of the 427-room Seaport Hotel, Drew said.

Massport plans to ask for proposals from developers for four other large parcels, in the so-called Commonwealth Flats area, located roughly between the Boston Fish Pier and the site of the Boston Convention and Exposition Center.

Developers are designated by Massport following recommendations from the agency's staff.

Asked about development plans, Drew said, ''Right now we are not pursuing any others.''

Even so, Massport and Drew must abide by the terms of voluminous, long-term leases of the Massport land. The waterfront area includes office, residential, and industrial use, plus portions set aside as open space.

''In theory, any development issue affects John Drew, because whatever Massport does affects what's already built,'' said Stephanie Pollack, vice president of the Conservation Law Foundation. ''John Drew is Massport's biggest tenant.''

Hertz has declined to be interviewed since being named to his position.

Juves refused to provide copies of the waterfront leases yesterday. He said development issues are the purview of Lowell Richards, Massport chief development officer, who reports directly to Coy.

Pollack said there was natural tension within Massport between the business development office, which generates revenues, and the maritime office, which maintains port facilities, such as cargo freight and fish processing, that do not provide profits to the agency.

Coy said he picked Hertz for the job, which pays $190,000 a year, as a result of an ''open process'' in which an ''untold number'' of resumes were reviewed. He interviewed seven candidates.

Coy publicly cited Hertz's work in the early 1980s as state budget director and his stints at Advanced MobileComm and at the Boston Communications Group.

''And most recently he's been with Fidelity Capital,'' Coy said.

Coy failed to disclose that while at Fidelity Capital, Hertz served as director of HR Logic Inc., a provider of payroll and other employee services, at the time Coy was recruited to HR Logic as CEO.

Coy last week acknowledged he should have been explicit about his past business relationship with Hertz.

HR Logic went out of business yesterday.

Sean P. Murphy can be reached at

This story ran on page B1 of the Boston Globe on 8/1/2002.
© Copyright 2002 Globe Newspaper Company.

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