Potential Violations in Public-Private Partnership Involving Courageous Sailing Center and ASM Global/Legends

I am writing to bring attention to serious legal and regulatory concerns regarding a proposed development in the Charlestown Navy Yard that appears to involve the potential misuse of a nonprofit organization to facilitate a private commercial land grab of significant public waterfront assets.

Legal and Regulatory Framework at Risk

Chapter 91 Violations: The proposed development raises substantial concerns about compliance with Massachusetts General Law Chapter 91 (Public Waterfront Act). The Conservation Law Foundation has already flagged potential violations, noting that the BPDA allowed proposals to advance despite apparent regulatory non-compliance with water-dependent use requirements.

Nonprofit Governance Concerns: Courageous Sailing Center, a 501(c)(3) nonprofit established in 1987 for community sailing education, appears to be serving as a vehicle for a commercial development that fundamentally contradicts its charitable mission and tax-exempt status.

Public Trust Doctrine: The proposed privatization of Piers 4 and 5 may violate the Public Trust Doctrine, which requires that waterfront resources remain accessible to the public and serve public purposes.

The Scheme: Using Nonprofit Cover for Private Gain

Disproportionate Commercial Component: The proposed $85 million facility would generate over 50% of its revenue from commercial building rentals, with less than 25% from actual sailing education – inverting the nonprofit’s stated charitable purpose.

Corporate Partnership Structure: ASM Global/Legends, a major entertainment venue corporation managing 350+ commercial facilities worldwide, would be the de facto operator of what is ostensibly a nonprofit educational facility.

Public Subsidy of Private Profit: Under the proposed financing structure, taxpayers would fund capital costs while net profits flow to Courageous Sailing and its for-profit partner ASM Global – constituting what appears to be “public risk for private gain in perpetuity.”

Potential Legal Violations

Nonprofit Law Violations:

• Potential violation of IRS regulations regarding unrelated business income
• Possible breach of charitable trust obligations
• Risk of endangering tax-exempt status through excessive commercial activity

Public Procurement Law: The bundling of Pier 4 and Pier 5 into a single proposal may circumvent proper competitive bidding processes required for disposition of public assets.

Environmental Law: Proceeding without required traffic studies, environmental impact assessments, or proper Chapter 91 review may violate state environmental protection statutes.

Municipal Finance Law: The financing arrangement may violate restrictions on municipal guarantees for private commercial ventures.

Taxpayer Protection Issues

Asset Transfer Below Market Value: BPDA has indicated willingness to transfer Pier 5 for “$0 if economically necessary” – potentially constituting an improper gift of public assets to private interests.

Inadequate Public Process: Despite the significant public investment and asset transfer involved, the proposal has proceeded with minimal public oversight or transparency, potentially violating public meeting and disclosure requirements.

Perpetual Private Control: The proposed long-term lease structure would effectively cede public control over prime waterfront real estate in perpetuity, limiting future public use and benefit.

Request for Investigation

I respectfully request that your office investigate:

1. Nonprofit Compliance: Whether Courageous Sailing’s proposed partnership with ASM Global violates its charitable purpose and tax-exempt obligations
2. Chapter 91 Enforcement: Whether the BPDA has properly enforced Public Waterfront Act requirements
3. Public Asset Protection: Whether proper procedures have been followed for disposition of valuable public waterfront property
4. Procurement Compliance: Whether the bundled proposal circumvents competitive bidding requirements
5. Environmental Review: Whether required environmental and traffic impact studies have been conducted

Precedent and Public Interest

This case represents a concerning precedent where corporate interests may be exploiting nonprofit organizations to circumvent public oversight and gain control of valuable public assets. The Attorney General’s intervention is crucial to ensure:

• Protection of nonprofit sector integrity
• Enforcement of public waterfront access rights
• Proper stewardship of public assets
• Compliance with competitive procurement processes
• Adequate environmental and community impact review

The public trust in both our nonprofit sector and public asset management depends on rigorous enforcement of applicable laws and regulations. I urge your office to exercise its oversight authority to investigate these concerning arrangements before irreversible commitments are made.

Supporting Documentation

Detailed information about this proposal and community concerns can be found at HarborPark.org, which documents the scale and commercial nature of the proposed development.

Thank you for your attention to this matter. I am available to provide additional information as needed for your investigation.

Respectfully submitted,

Zachary Cutler, Environmental Anthropologist