The Star Store 20-Year Lease
A Lack of Shared Vision and Collec�ve Accountability
Wastes Millions in Public Dollars
September 16, 2024
Jeffrey S. Shapiro, Esq., CIG
Inspector General
Office of the Inspector General
Commonwealth of Massachuse�s
 Inspector General Council
Susan Terrey, Chair (elected) – By designa�on of Secretary of Public Safety and Security
Michael Leung-Tat, Vice Chair (elected) – By designa�on of State Auditor
Amy Cra�s – By designa�on of A�orney General
Comptroller William McNamara – By statute
Michael Caira – By Governor’s appointment
Rachel Ciocci – By State Auditor’s appointment
James Morris – By A�orney General’s appointment
Christopher Walsh – By Governor’s appointment
 September 16, 2024
Via Electronic Mail
Her Excellency Maura Healey The Hon. Michael J. Rodrigues, Chair The Hon. Aaron M. Michlewitz, Chair
Governor of Massachusetts Senate Committee on Ways and Means House Committee on Ways and Means
Maura.Healey@mass.gov Michael.Rodrigues@masenate.gov Aaron.M.Michlewitz@mahouse.gov
The Hon. Ronald Mariano The Hon. Marc R. Pacheco, Chair The Hon. John J. Mahoney, Chair
Speaker of the House Senate Post Audit and Oversight House Post Audit and Oversight
Ronald.Mariano@mahouse.gov Marc.Pacheco@masenate.gov John.Mahoney@mahouse.gov
The Hon. Karen E. Spilka Matthew Gorzkowicz, Secretary The Hon. Bruce E. Tarr
President of the Senate Exec. Office of Admin. and Finance Senate Minority Leader
Karen.Spilka@masenate.gov Matthew.Gorzkowicz@mass.gov Bruce.Tarr@masenate.gov
The Hon. Bradley H. Jones Jr. Michael D. Hurley, Senate Clerk Steven T. James, House Clerk
House Minority Leader Office of the Clerk of the Senate Office of the Clerk of the House
Bradley.Jones@mahouse.gov Michael.Hurley@masenate.gov Steven.James@mahouse.gov
Re: The Star Store 20-Year Lease: A Lack of Shared Vision and Collective Accountability
Wastes Millions in Public Dollars
Dear Governor Healey and Commonwealth Leaders:
The Legislature directed the Office of the Inspector General (OIG) to review expenditures incurred
by the Division of Capital Asset Management and Maintenance (DCAMM) and the University of
Massachusetts Building Authority (UMBA) in leasing the Star Store in New Bedford for use by the
University of Massachusetts Dartmouth (UMD).
The original 20-year lease ran from August 15, 2001, to August 14, 2021. The parties subsequently
entered a short-term lease with a continuation of terms from August 15, 2021, to August 14, 2022. Upon
the expiration of the short-term lease, UMD remained in the Star Store for another year through a month-
to-month tenancy that ended when the Legislature stopped funding the rent payments.
The Legislature’s mandate tasked the OIG with reviewing expenses incurred after the initial 20-
year lease expired, specifically from September 7, 2021, until UMD vacated the building on August 31,
2023. Based upon the fact that one of my predecessors, Inspector General Robert A. Cerasoli, urged the
then-Governor to veto the 1996 legislation that authorized the procurement of the underlying 20-year
lease, I used my authority under M.G.L. Chapter 12A to expand the review to revisit the decisions related
to the initial procurement and original 20-year lease and to cover the entire period of UMD’s occupancy.
I present a summary and findings of said review herein.
The OIG found that the state-funded lease of the Star Store on behalf of UMD was flawed from
its inception and resulted in a waste of public funds. The legislation that authorized DCAMM to issue a
request for proposals (RFP) for a 20-year lease of a building on behalf of UMD, ostensibly to drive
Office of the Inspector General for the Commonwealth of Massachusetts 3|Page
economic revitalization in the Gateway City of New Bedford, was not open, fair, or competitive. In fact, I
conclude that it was a procurement in name only.
As forewarned by IG Cerasoli, the 1996 legislation unnecessarily exempted the procurement from
existing statutory safeguards and was written so narrowly that there was no competition. Therefore, it
comes as no surprise that this sham procurement resulted in a flawed lease that was financially structured
to offset a $1.00 option to purchase the building at lease end (which was not executed) with premium
rents paid by the Commonwealth. While the OIG found no evidence of fraud in the period of review
mandated by the Legislature, the OIG did find that over $4 million in public funds were wasted due to a
lack of ownership or oversight of the lease and its provisions.
The parties – the Legislature, DCAMM, UMD, UMBA and the owner of the Star Store – lacked a
shared vision about the objectives of the lease, which resulted in a lack of responsibility to adhere to the
lease’s terms, particularly regarding maintenance and capital repairs. Maintaining the building was
essential to ensure that it was in good repair at the lease’s end, making the option to own a reasonable
one. The Commonwealth funded most of the operational needs of the lease through a special line item,
with a minimal amount coming from UMD’s budget. As the end of the 20-year lease approached, the
parties failed to communicate timely and effectively as to whether the option to purchase would be
exercised. As a result, the Commonwealth, after paying very generous lease terms for 20 years and failing
to purchase the building, then paid unnecessary and high rent payments for two additional years. When
funding was not appropriated in the Commonwealth’s FY24 budget, UMD was forced to abruptly vacate
the building in August 2023. Since then, the Star Store has languished as a vacant, aging property in the
downtown center of New Bedford.
This project may have been beneficial for the local community, as evidenced by the public outcry
when UMD’s Center for Visual and Performing Arts vacated the Star Store, but there were no defined
metrics to objectively measure economic benefits. In the absence of a shared written commitment to the
purpose of the project, the OIG could not justify the millions in public funds expended, most especially
during the final two years of UMD’s occupancy.
This report contains specific findings about this project and recommendations that I hope will
prevent similar waste of public funds and assets in the future.
Sincerely,
Jeffrey S. Shapiro, Esq., CIG
Inspector General
cc (via email):
Senator Mark Montigny
Representative William Straus
Representative Antonio F. D. Cabral
Representative Chris Hendricks
Office of the Inspector General for the Commonwealth of Massachusetts 4|Page
 Representative Christopher Markey
Representative Paul Schmid
Jon Mitchell, Mayor, New Bedford
Martin Meehan, President, UMass
Mark Fuller, Chancellor, UMass Dartmouth
Adam Baacke, Commissioner, DCAMM
Deborah Russell, Director of Leasing, DCAMM
Susanne M. O’Neil, Deputy Inspector General, OIG
Eugenia M. Carris, General Counsel, OIG
George A. Xenakis, Director, Audit, Oversight and Investigations Division, OIG
Joshua Giles, Director, Government Outreach and Public Policy Division, OIG
Nataliya Urciuoli, Senior Executive Assistant, OIG
Stacy DeBole, State Librarian, State Library of Massachusetts
Office of the Inspector General for the Commonwealth of Massachusetts 5|Page
 7 Execu�ve Summary
11 Legisla�ve Mandate – Office of the Inspector General Review
11 Status Update – Star Store Review – 2023 OIG Annual Report
12 Timeline of Key Events Related to the Star Store Lease
18 Background
TABLE OF CONTENTS
44 Findings
46 Finding 1: The 1996 legisla�on was flawed, se�ng up a procurement
process that was not open, fair, or compe��ve.
47 Finding 2: The resul�ng request for proposals (RFP) was in name only
and resulted in a flawed lease.
47 Finding 3: The project lacked a clear vision.
48 Finding 4: The original lease terms were unfavorable to the
Commonwealth, while other terms were ambiguous or ignored.
49 Finding 5: DCAMM failed to exercise ownership over the project.
50 Finding 6: UMass was not commi�ed to the long-term plan for the
Star Store.
50 Finding 7: The Commonwealth spent over $60 million on the Star
Store since execu�ng the original lease in 2000.
52 Finding 8: The collec�ve failure of DCAMM, UMD, and the Legislature
to communicate and plan for the end of the 20-year lease resulted in
the waste of over $4 million in public funds through the short-term
and month-by-month tenancies.
53 Finding 9: The OIG has no reasonable grounds to refer the Star Store
ma�er for prosecu�on or civil recovery.
54 Conclusions and Recommenda�on
58 Appendix A. Previous OIG Correspondence Relevant to Star Store Lease
81 Appendix B. Commonwealth of Massachuse�s Lease for Star Store Building
 EXECUTIVE SUMMARY
Pursuant to Section 79 of Chapter 28 of the Acts of 2023 (Section 79), the Massachusetts Office of
the Inspector General (OIG) conducted a review of expenditures related to the Commonwealth’s lease of
the Star Store, a large commercial building located at 182 Union Street in New Bedford, for use by the
University of Massachusetts Dartmouth (UMD). The original 20-year lease began in 2001, and was later
extended through one-year and month-by-month tenancies. The Legislature specifically directed through
Section 79 that the OIG review Star Store lease expenses incurred after September 7, 2021. But in light of
concerns that former Inspector General Robert A. Cerasoli had expressed about the lease even before it
was signed, the OIG began its review with the series of events leading to the original 20-year lease. The
OIG’s examination extended through the entire period of UMD’s occupancy, which ended in August 2023
when UMD vacated the premises.
The Star Store was built in downtown New Bedford in 1844 and operated as a popular department
store for many years. In 1995, the city took possession of the building in lieu of unpaid taxes. Later in 1995,
the New Bedford Redevelopment Authority designated a developer (Developer) for the Star Store.
In 1996, state lawmakers, at the urging of New Bedford’s state senator, passed legislation
authorizing the Division of Capital Asset Management and Maintenance (DCAMM) to procure a 20-year
lease for a property in New Bedford for use by UMD. While the senator viewed the measure as a linchpin
for revitalizing downtown New Bedford, then-Inspector General Cerasoli raised concerns that the
anticipated procurement would not be fair and competitive since the Star Store was the only building in
downtown New Bedford that met the very detailed criteria specified in the 1996 legislation.
In 1999, the city sold the Star Store to the Developer for $1.00. In 2000, following the request for
proposals (RFP) process envisioned by legislators, DCAMM executed an agreement with the Developer to
lease the Star Store for 20 years. In addition to base rent payments – which were tied to the repayment of
bonds and included the Developer’s profit – the Commonwealth as the tenant was required to cover the
building’s operating costs and real estate taxes through payments designated as “additional rent.”
Inspector General Cerasoli had previously criticized the “additional rent” provision in the rider of the
proposed lease attached to the RFP, writing to DCAMM in 1999, “In general, allowing a landlord – or any
vendor – to bill the Commonwealth for the vendor’s normal operating expenses exposes the
Commonwealth to excess costs while reducing the landlord’s incentive to operate efficiently and cost-
effectively.”
Significantly, the 20-year lease agreement contained an option for the Commonwealth to
purchase the building for $1.00 at the conclusion of the lease. The financial structure of the 20-year lease
suggests that, barring unforeseen circumstances, it was designed to facilitate the Commonwealth’s lease-
end purchase of the Star Store.
In 2001, UMD’s College of Visual and Performing Arts (CVPA) moved into the Star Store and began
using the facility for classes and studio and performance space. In 2021, at the end of the 20-year lease,
the Commonwealth did not exercise the purchase option. Instead, the parties extended the lease for
another year. During that one-year term, the Commonwealth continued to pay a high base rent that was
no longer tied to the repayment of construction costs, plus “additional rent.” In August 2022, when the
lease extension was set to expire, the Commonwealth again did not exercise the $1.00 purchase option
Office of the Inspector General for the Commonwealth of Massachusetts 7|Page
that the extension had preserved. Instead, the CVPA remained in the building without a lease and made
monthly rent payments until August 2023.
After paying more than $60 million in rent and other payments over the life of the original lease,
the one-year extension, and the subsequent month-to-month tenancy, the Commonwealth failed to
exercise the $1.00 purchase option and allowed it to expire.
Through its investigation of the Star Store lease, the OIG assessed the circumstances surrounding
the 1997 procurement, the lease terms, the lease management, and whether DCAMM and UMD
effectively used the Star Store for public benefit without wasting public dollars. The OIG found that the
1996 legislation prompted a procurement process that was not open, fair, or competitive. With no
competition, there was no incentive for the Developer to reduce costs or propose more favorable terms
for the Commonwealth. Other lease terms were ambiguous or ignored by the Commonwealth parties and
the Developer.
The OIG further found that the Star Store economic development project lacked a clear vision.
DCAMM, which acts as the expert in the Commonwealth’s real estate construction, purchases, and leases,
did not exercise ownership over the project and did not undertake capital improvements that would have
made the purchase option more attractive to the Commonwealth.
The University of Massachusetts system and UMD likewise did not ensure that capital repairs and
improvements were made over time, despite the Legislature making funds available to protect the value
of the Star Store over the course of the lease. UMD seemed uncommitted to maintaining a presence in
downtown New Bedford upon the lease’s expiration and gave mixed signals on its interest in the purchase
option. Yet, some UMD officials began discussions with DCAMM about future long-term lease options,
notwithstanding that neither DCAMM nor UMass had committed to seek funding for an additional lease.
When the university did not clearly communicate by the July 14, 2021 deadline that it wanted the
state to purchase the building for its continued use, DCAMM and UMD should have made plans to orderly
vacate the premises by the lease’s end on August 14, 2021. Instead, the collective failure of DCAMM, UMD,
and the Legislature to effectively communicate and plan for the end of the 20-year lease wasted over $4
million in public funds through expensive short-term and month-by-month tenancies.
To prevent a similar waste of public funds and assets in future long-terms leases, the OIG herein
makes numerous recommendations.
For public entities generally:
1. Public entities entering, managing, or benefiting from leases to which the Commonwealth or
one of its subdivisions is a party must establish clearly defined roles and responsibilities and
implement processes to ensure accountability to protect the Commonwealth’s interests.
2. When public entities are negotiating leases, atypical or nontraditional terms such as
“additional rent” provisions should be the exception and must be supported by well
documented justification. Public entities must ensure that the lease contains safeguards,
processes, and enforceable terms to promote accountability and protect against fraud, waste,
and abuse.
Office of the Inspector General for the Commonwealth of Massachusetts 8|Page
 3. Public entities must be mindful that their work on a lease does not end when the lease has
been negotiated and signed. Public entities must dedicate resources and ensure they have
processes in place to administer the lease for its duration. Public entities must take full stock
of all rights and duties under the lease to maximize the property’s benefit in a fiscally
responsible manner.
4. Public entities should proceed cautiously in considering lease durations that exceed DCAMM’s
standard 10-year term, as longer terms increase the level of risk.
For DCAMM:
1. DCAMM must actively manage leases that include an option to purchase, rather than simply
assisting tenant agencies with landlord compliance issues.
2. DCAMM should immediately, clearly, and forcefully call attention to terms and conditions that
are