Mystery Still Surrounds Vineyard Property Sale

The sale of some highly desirable shorefront property on Martha's Vineyard for what seems like an incredibly low price has upset a lot of people.

Members of the Harvard Corporation-the group responsible for selling the land-are upset because the bare facts of the case tend to point to the conclusion that they either have no business acumen or they're doing someone a favor.

Executives of Land-Vest, Inc.-the Boston development company that bought the land-are upset because it looks like they're either swindling Harvard or receiving a favor.

And summer residents of the Vineyard are upset because they say they would have bought the land and set it aside for conservation, if they had known it was going for such a bargain price.

Harvard acquired the land in 1969, upon the death of the wife of Charles Russell Lowell Putnam '91, a wealthy New York surgeon. Under the terms of Putnam's will, the land was to be sold outright and the proceeds were to go to the Medical School for research and teaching fellowships. The valuation of the property in the will was between $1.6 and $1.7 million. When Land-Vest finally bought the land in March 1973 it paid only $620,000.

Eugene G. Kraetzer '29, who worked on the deal as assistant secretary to the Corporation, says that Land-Vest was the only buyer "prepared to make a purchase in line with what Harvard wanted to accomplish." What Harvard wanted to accomplish, he says, was getting the most amount of cash for the land and the least amount of development.

But there was at least one other potential buyer who offered more money and less development than Land-Vest did. In 1971, Albert L. Cohn, a Law School alumnus and Vineyard summer resident, offered Harvard $1.1 million for the property, proposing to divide it into only 27 lots and to set aside 199 of the 320 acres as common land. Cohn's plan met with the approval of the Vineyard Open Land Foundation, a non-profit group interested in protecting the island from excessive development.

There is some disagreement about why the deal with Cohn fell through. "Cohn never made us an offer of any kind," Kraetzer says emphatically. "He talked about things, but there was never any concrete proposal. We felt that he was not-I won't say not responsible-but it was perfectly obvious he was not serious."

"It was a serious offer," says James F .Alley, Cohn's broker, just as emphatically. "My client was not a facetious person." Alley says Harvard made it clear it was not interested in Cohn's proposition because it wanted $500,000 more than he had offered.

Kraetzer concedes that at the time Harvard was "not in any hurry" to sell the land. "We wanted to give it some exposure," he says.

But apparently, Harvard waited too long. Kraetzer says his expectations of what the Corporation could get for the land plummeted because of two developments-the decline in the state of the economy, and the introduction of legislation that he claims posed a serious threat to development on the property and scared off potential buyers. But island residents claim that everyone knew the bill, which was introduced by Sen. Edward M. Kennedy '54 (D-Mass.), had no chance of passing in its original form.

According to Peter Mead, a vice-president of Hunneman and Company, the firm that manages Harvard's real estate in the Boston area, Land-Vest got in touch with Hunneman after seeing an article about the Putnam estate in the Vineyard Gazette. "A few other developers showed an interest, but when they found out about that insidious Kennedy bill they backed off," Mead says. "We offered the property to some bigger Boston developers, but they weren't interested."

James Alley, a Vineyard real estate broker, says he knew of plenty of people who were interested. "It seemed rather strange that Harvard didn't pursue the deal with island brokers who had people interested in buying." he says. "They almost acted as if they weren't interested in selling it."

The low price that Land-Vest paid for the land "amazed a lot of people," Alley says. But Land-Vest considers that it paid "an absolute market price," says Wade Staniar, a Land-Vest executive. While admitting that lots on the Putnam estate go for considerably less than comparable lots on the Vineyard, he denies that the low price Land-Vest paid enabled them to charge so little.

Land-Vest has already grossed $1.6 million from the sale of 33 out of 49 lots on the property, 13 of which have been sold to Harvard alumni or faculty. Staniar says that state legislation imposing a one-year moratorium on building has practically brought business to a standstill in the past four months, but he admits that the law will not cut into Land-Vest's long-term receipts-which could go as high as $2.4 million. Alley says the law could only push Land-Vest's profits up, by making less land available to other developers.

Harvard says that it chose Land-Vest because the company seemed concerned with land conservation-Wade Staniar says he thinks Harvard chose Land-Vest because of the company's "past track record of ecological concern." But not everyone agrees with that assessment. One island summer resident who asked to remain unidentified calls the construction "brutal" and claims that building 49 septic tanks on the property will undoubtedly pollute the soil.

Land-Vest says its tests show that there is no danger of such pollution. They also point with pride to the 50 acres of common land they have set aside, including a cemetery where members of the Putnam family are buried along with some of their pets.

The deal with Land-Vest was handled solely by Kraetzer and former treasurer George F. Bennett '33 and did not come before the full Corporation until after the land had already been sold. George Putnam '49, grand-nephew of Charles Russell Lowell Putnam and the man who took over as treasurer in July, 1973, says the matter should have come before the Corporation before the sale and adds that it will almost definitely come up in the Corporation's meeting today.

"It's unfortunate that they didn't get more for the land, but of course that's easy to say with hindsight," says Putnam. "I'm not being critical of my predecessor."

Hindsight is a word that comes up often in conversations about the Land-Vest purchase, but no one at Harvard seems too anxious to use it. They would prefer to close the Land-Vest case once and for all, pointing out that the deal went through almost two years ago and that nothing can be done about it now anyway.

It's still not clear just what the explanation is-bad luck, bad judgement, or some kind of hanky-panky-but the experience may lead Harvard to be more careful about its real estate dealings in the future.A portion of the Putnam tract on Martha's Vineyard.