SOBOFF & SONS From: 6 Portland Street, Boston. To: 203 Portland Street, Boston. The claimant is engaged in the manufacture, sales and reupholstering of furniture. He purchased the new location and occupies two floors which is approximately the same area of the former establishment. There are seven employees and the relocation was completed in a 5-month period. Items Amount Amount paid Moving.. Contractual, electrical, sign, venetian blinds, carpentry, and directory.. Total 9, 521.23 11, 367.39 1 Labor and material for new fixtures were disallowed; specifically the building directory, 42 lighting fixtures, and platform material. Reduction of sign work is based on technical consultant's evaluation. STARR BOOK CO. From: 103 Washington Street, Boston. To: 129 Pearl Street, Boston. This company is a retail bookstore. The major portion of the relocation was completed by a commercial mover who packed, moved, and unpacked a great quantity of reading material. 1 Commercial mover invoice included $3,685 for packing. Claimant's request was not considered reasonable and was reduced to the commercial mover's estimated packing figure. JEROME PRESS From: 49 Portland Street, Boston. To: 270 Summer Street, Boston. Jerome Press is a printing shop specializing in political and theatrical work. The owner employs 25 people and required 6,000 square feet, 3,000 of this for shopwork. Relocation occurred during a heavy production schedule. "Live forms" were relocated by employees in order that the owner continue his production without interruption. Press machinery required handling by a commercial rigger. Relocation was conducted over 3-month period. 2 Noncompensable labor and material updating new location that included the rebuilding of partition in place, installation of a new sink, and electrical tools of trade. LABORATORY FOR ELECTRONICS, INC. From: 63-75 Pitts Street, Boston. To: 119 Braintree Street, Boston, 1079 Commonwealth Avenue, Boston. The claimant is a manufacturer of electronic components, contracting with Government and private industry. The corporation moved to two locations prior to the $25,000 maximum. A considerable amount of the relocation work was accomplished by the employees for two reasons. The first is that numerous items are classified material related to the national interest; the second was the familiarity and care required for delicate electrical equipment. The relocation was carried out over a 10-month period. Item Amount Amount paid Moving Self-packing by company employees.. Contractual, plumbing, electrical, carpentry. Contractual, by company employees.. hold improvements.. Total.... Employees benefits, general administration, expense and amortized lease 1 Carpentry consisted entirely of new material and labor. Labor and material related to the updating of new location with regard to painting, new fixtures, and partitions. 3 General administrative expenses, leaseholder's improvements and employee benefits, other than the cost of health, welfare, and workingmen's compensation, considered noncompensable. WASHINGTON PARK PROJECT, MASS. R-24 HUMBOLDT PHARMACY, INC. The above drugstore has been in operation at the former location for 30 years. The owner purchased a drugstore which was in operation and elected a partial move, partial liquidation. Moving Items Contractual: Plumbing, electrical and air condition service.. Subtotal Property loss. Total... 1 Air condition service disallowed at the claimant's request. 2 In accordance with current regulations reduction made to maximum allowance. 1,679.90 1, 589.30 3,269.20 $1,250.50 í 350.00 1,600. 50 2 1,399. 50 3,000.00 BURTMAN IRON WORKS, INC. From: 116-126 Humboldt Avenue, Roxbury. To: Whiting Avenue Extension, Readville. Burtman Iron Works is engaged in the manufacturing of various metal products. This large plant employs 70, and the owner utilized his staff to relocate his inventory which included 600 tons of steel; this utilization kept the plant in operation and completed contracts. The company's machinery consists of punch presses, welding machines, press brakes, and shears. The claimant received a Small Business Administration loan of $250,000 and purchased a building within the confinement of the city. 1 Reduced in compliance with regulations limiting relocation payments to a maximum of $25,000. CASTLE SQUARE PROJECT, MASS. R-56 MAX FREEDMAN CO., INC. From: 14 Dover Street, Boston. To: 1683-1685 Washington Street, Boston. The above-named account is a large wholesaler of leather and shoe findings. The company also sells related machinery wholesale. An impartial cross estimator was requested by the Authority and his figure for the relocation was $13,300. Commercial mover dismantled and reassembled all shelving. The relocation was completed in a period of 2 months. From: 177-79-81 Shawmut Avenue, Boston. To: 37 Leon Street, Boston. The major portion of the relocation of this plumbing supply house was related to the control of inventory parts taken from bins and moved to the new leased location at Leon Street. Senator MUSKIE. We do appreciate your coming. I think that your experience in the Boston project is of tremendous value for this record. We would like to get information on as many projects throughout the country as possible. It is only out of the experience that we have had in these programs that we can shape the public policy that we need for the future. Thank you again very much. Mr. DROUGHT. Thank you. Senator MUSKIE. I notice Senator Kennedy of Massachusetts is here. We will be delighted to have your testimony now, Senator. STATEMENT OF HON. EDWARD M. KENNEDY, A U.S. SENATOR FROM THE STATE OF MASSACHUSETTS Senator KENNEDY. Mr. Chairman, I am glad that the State of Massachusetts has had a spokesman. I am certain that the State has been well represented in the person of Mr. Drought, who was able to provide, I am sure, a unique background and experience in this whole problem. First of all, Mr. Chairman, I want to commend you for your very sincere interest in a matter which affects so many of our cities and towns across the Nation, as well as in Massachusetts and the New England area. I feel that you are really providing a great service to all of us who are concerned with this problem, and I want to commend you for your leadership. I appreciate the opportunity of being here and testifying in favor of S. 1681. I had hoped to have the opportunity to introduce Mr. Drought, who is the assistant administrator for development of the Boston Redevelopment Authority. As I said, I am sure that the committee will benefit from the views and experience of Mr. Drought, for the Boston Redevelopment Authority has done an outstanding job in our city. I am in full agreement with the objectives of S. 1681, for I feel that the Federal Government has a distinct responsibility to those displaced by the various public improvement programs. We can hardly expect continued public acceptance of the many projects undertaken for the benefit of our Nation's cities and highways when the burdens of such programs fall inequitably on a few. Of greatest concern, of course, are the estimated 111,000 families and individuals that will be displaced in the next 4 to 8 years by Government programs. Unless they can receive assurances that suitable housing will be available, and that sufficient moving and adjustment allowances will be forthcoming, we will be building our highways and rejuvenating our cities at the expense of those least able to carry the cost. The moving allowance of $200 and the dislocation allowances in S. 1681 are generous and reasonable. Moreover the special attention that will be given to low-income families, the elderly and handicapped for whom public housing units are not available guarantees us that their unusual needs will be met. I have also been concerned with the effects of improvement programs, mainly urban renewal programs, on the economic livelihood of the many affected businesses. I believe this committee has estimated that some 18,000 businesses will be displaced over the next 4 to 8 years. The provisions of S. 1681 calling for payments to independent businesses that cannot successfully relocate of an amount equal to their yearly net earnings or $25,000 would be helpful in most cases. The advisory assistance given to other small firms undertaking relocation and the meeting of actual moving expenses up to $25,000 would bring all Federal programs up to the level of relocation assistance now provided by the urban renewal administration. Most business relocation expenses are not large. It has been estimated that only 3.6 percent of all urban renewal business relocation payments have been in excess of $10,000. It is unfortunate, however, that in a few instances there have been valid cases of small firms forced to move where their expenses exceeded the current Urban Renewal Administration limit of $25,000. In many instances these firms are not large in terms of income or earnings but are more expensive to move as a result of the nature of their equipment or the delicacy of their machinery. In June of 1961, the Housing Act of 1949 was amended to provide for unlimited moving expenses for displaced businesses. In October 1962, however, the Urban Renewal Administration, by administrative ruling, placed the fixed limit on business moving expenses of $25,000. On June 10 of this year I wrote to Chairman Sparkman of the Housing Subcommittee expressing my concern with the URA's rigid policy on moving expenses, and I urged the subcommittee to call upon the Renewal Administration to ease this policy to take into account those cases where the business expense of the move would be truly in excess of the rigid $25,000 ceiling. I was gratified to note, therefore, that the report of the Committee on Banking and Currency on the Housing and Urban Development Act of 1965 contained the following language: The Housing Agency has issued regulations limiting the maximum amount of the total certified actual moving expenses that may be paid with respect to any business displacement to $25,000. The committee recognizes the need within the Housing Agency for establishing administrative limits on the size of any business payment. However, the committee is concerned that this flat dollar ceiling can result in hardship in certain cases and expects the Housing Agency to provide sufficient flexibility in its regulations to enable it to pay moving expenses in excess of $25,000 when necessary to avoid undue hardship or an inequitable financial burden. In such a case the Administrator may wish to issue regulations to share the cost of the excess above $25,000 in an appropriate ratio. Since the publication of this report I have been in communication with the Administrator of HHFA specifically calling this language to his attention. As a result, I have received assurances from him that the Agency will review its heretofore rigid policy on business moving expenses, and that they will devise a method of meeting those costs in excess of $25,000.9 I note that S. 1681 provides for Federal reimbursement of such expenses on a 100-percent basis up to $25,000 and Federal sharing of additional costs above that based on the specific project's cost-sharing formula. It appears to me that this is a most reasonable and equitable approach. I would suggest that the Urban Renewal Administration, in light of the urgings of the Senate committee report, could immediately proceed to adopt this approach in anticipation of the passage of the legislation being considered today. Again, Mr. Chairman, let me express my appreciation to you for allowing me to appear before this committee and express my views on S. 1681 and hopes for its passage in the very near future. Senator MUSKIE. I appreciate your excellent statement. I think the basic question we are dealing with here is whether there is any reason in public policy or otherwise why people who are forced to relocate by reason of public programs should not be fully compensated for every relocation cost that can be established by any reasonable standards of proof. To the extent that we have not done so in the past, I believe there are two reasons: one, we tend to feel that people who are forced to move by reason of a highway program or an urban renewal project are somehow in a position where they ought to bear some portion of the costs; that they are in some way benefited by the public program and should not be expected to be fully compensated. I think this attitude would not be hard to document. The second reason would be that we are opening the door to abuses. Is there any reason, for example, when a new highway is built through a city why a business which is displaced ought not to get compensated for the loss of goodwill, the loss of profits, and the inconvenience of the move? Why should the tenant not be compensated for the loss of fixtures which he has built into somebody else's building which he cannot move? Really, there does not seem to be any justification at all for putting any limit at all on the compensation, but I feel that there is fear of possible abuse. If you cannot justify See 30 Fed. Reg. 10027 (Aug. 12, 1965). |