Tenants argued that the board's decision to grant the removal permit should hinge on the issue of intentional owner neglect. The distressed building provision contains a section which does not allow removal permits in cases where the "owner neglected reasonable maintenance and repair of the building to escape from rent control."

In a March 23 report to the board, a hearing examiner stated the "escape from rent control was at least a factor in the owner's decision-making process," in the Craigie Arms case.

"The policy was specifically implemented to prevent landlords from neglecting duties. We should deny removal permits on that basis alone," said Cecelia Josephson at the heated Wednesday meeting.

But at least three of the five board members disagreed that the 85 year old building's present deterioration is due to intentional neglect on HRE's part.

Board Chairman. Acheson M. Callahan, pointed out that before late 1982, when removal permits became a possibility. Harvard had no incentive for neglecting maintenance.

"It's very hard to see why they would choose to neglect it," added Cohn, who is one of two board members nominated by landlords' groups. The tenants also nominate two of the five members who are appointed by the city manager.

Yet another contention centered around a discrepancy between the cost estimates of the hearing examiner and the Community Development Department, which approached the developers' projected $1.5 million price tag.

The hearing examiner, an RCB employee, put the costs for bringing the building up to state building codes at only $351.715. But he also said that "desirable" gut rehabilitation would cost $1.3 million, nearly as much as the department's estimate.

Michael H. Turk, spokesman for the tenant coalition, said that the city should not allow Harvard to turn Craigie Arms into "luxury" housing.