The South Boston Betterment Trust, a politically appointed group formed to develop lower-cost housing with the profits from development, had forged a deal that would have given the neighborhood millions of dollars in linkage fees from developers looking to build on the waterfront in the neighborhood. The linkage fees are funds from the developer to the city to compensate for the negative effects of development. Other neighborhoods in the city protested that South Boston was receiving the lion's share of linkage fees and pressured Menino to get out of the deal.

Menino eventually backed out of the deal, which was signed by a number of the city's leading politicians including Councilman James M. Kelly, who was then Council President, State Senator Stephen F. Lynch, who is now running for Congress, and State Representative John A. Hart Jr. The trust sued Menino over his reneging on the deal, but the judge ruled that the contract is not binding and was not enforceable in a court of law.

"We're thrilled how the lawsuit was handled," Carole Brennan, spokesperson for the mayor, tells GlobeSt.com, adding that "The mayor never thought this should be in court. It was a waste of time and money."