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HomeMy WebLinkAbout2002-07-09 Board of Selectmen Executive Session Minutes Board of Selectmen Meeting Executive Session July 9, 2002 The Executive Session convened at 9:15 p.m. in the Conference Room, 16 Lowell Street, Reading, Massachusetts. Present were Chairman Camille Anthony, Vice Chairman Matthew Cummings, Secretary Richard Schubert, Selectmen George Hines and Gail Wood, Town Manager Peter Hechenbleikner, Town Counsel Yvonne Gonzalez, Town Counsel Joan Langsam. Joining the meeting later were Attorneys Elise Zoll and Brad Latham, Garr Morse, Mark Dickinson and Ed Shaw. Sale of Real Estate Landfill - In advance of the attendance by the representatives of Dickinson Development, the Town Manager and Town Counsel Yvonne Gonzalez reviewed with the Board of Selectmen the notes dated June 27, 2002 of a meeting between the Town and DEP, and a draft letter of agreement between the Town and Dickinson. The issue at hand is the requirement that Dickinson post a financial assurance mechanism in either cash, surety or letter of credit with DEP to guarantee the closure of the landfill, and a separate FAM to address the issue of monitoring and maintenance of the landfill site. Dickinson does not feel that they can afford to put up that kind of money (one half the cost of the closure is the cost of an insurance policy or approximately $1.5 million). We discussed whether the Town with the $3 million purchase price would agree to set that money in escrow as a final assurance mechanism with the money to be drawn down as closure takes place. If the Town was going to do that, the Town could hold the deed for the nine acres of the site exclusive of the Home Depot/Jordan's Furniture/Chili's Restaurant in escrow. The representatives from Dickinson joined the meeting. Attorney Brad Latham noted that the cost of the project has gone up and there is no hotel or office development in the near future to help carry the cost of the project. Home Depot and Jordan's Furniture are participants in the project. Dickinson's proposal is to pay $3 million at the real estate closing to the Town of Reading, that the $3 million would be held in security and that the deed for approximately 9 acres of land would be held by the Town with Home Depot and Jordan's Furniture taking the title for the remainder of the site. Dickinson would grant a temporary easement to the Town of Reading in the event that they defaulted. Dickinson believes that the value of the 8 1/5 acres of a closed landfill site is worth the risk of loss of the $3 million by the Town of Reading in the event of default. Mark Dickinson noted that as of the date of closing, the developer and partners would have $7 million invested in the site as follows: $3 million for the purchase price and $3.5 - $4 million in "soft cost." They have almost $3 million invested in soft costs right now. Dickinson doesn't expect any problems because the site has been tested extensively. They are in the process of finalizing the plans to be submitted on the 19t" of July to the Conservation Commission, CPDC - and revised plans to DEP. They feel that the proposed as outlined by the Town Manager and Town Counsel is appropriate. They don't think that the financial assurance mechanism is required in any case. Dickinson noted that when they put their budget together, they agreed to a Board of Selectmen Meeting—Executive Session--July 9, 2002—Page 2 financial assurance mechanism. However, that was pre-September 1 lth. They didn't know what the financial assurance mechanism would cost. Dickinson proposed to DEP that they consider this as an expedited closure -- the DEP has not agreed. The financial assurance mechanism is not a Home Depot and Jordan's Furniture responsibility. Town Counsel Yvonne Gonzalez noted that the suggestion of DEP was that the Town hold the entire deed in escrow. Mark Dickinson noted that Home Depot and Jordan's Furniture need the deed in hand at the real estate closing. Therefore, they would not agree to the Town holding the deed for the 25 plus or minus acres in escrow in addition to the nine acre deed. Dickinson noted that one alternative would be to continue to fight DEP on the expedited closure. The Town Manager noted that this would not be fruitful. Attorney Elise Zoli noted that DEP is under scrutiny from their legal staff regarding financial assurance mechanisms. Chairman Camille Anthony asked what Home Depot wanted the deed to, and expressed concern as expressed by other members of the Board of Selectmen that in the event of a default, the Town could be spending its $3 million closing the landfill to the benefit of Home Depot. Dickinson noted that Home Depot will have invested $7 million at the time of the real estate closing. Their contract between Dickinson and Home Depot is that if Dickinson does not complete the cap, then Home Depot and Jordan's Furniture have the ability to go in and do the closure. If they decide not to pursue it, then the deed would go back to Walkers Brook Crossing LLC. The Town Manager asked if, in the event, Dickinson would agree to deed the property over to the Town, and Dickinson agreed that he would unless there was something in the contract between Dickinson and Home Depot that prevents it. Vice Chairman Matthew Cummings remembered during negotiations that Mark Dickinson wanted to get the deed at closing, not on completion of the closure. Dickinson has responsibility to do the FAM in accordance with the Purchase and Sales Agreement. He feels that they continue to have that responsibility and should do it. He noted that every time there has been a problem on the site, the Town has been asked to solve the problem. This was true with the PWED application and true of the change in use. Dickinson noted that he appreciates the Town of Reading's cooperation, and noted that this is a very complex project. They are on the "two yard line" and very close to completing the transaction. Vice Chairman Matthew Cummings noted that tying up the Town's purchase price of$3 million will be problematic because those monies are committed to capital improvements for the Town. Chairman Camille Anthony noted that if the Town is going to potentially fund the closure, then the 25 acres need to come back to the Town of Reading. Selectman Richard Schubert asked if Home Depot and Jordan's Furniture were having second - thoughts with regard to the project, and Dickinson noted that they are heavily committed to the project. Board of Selectmen Meeting—Executive Session—July 9 2002—Page 3 Garr Morse noted that they cannot go back and ask Home Depot and Jordan's Furniture to cover the cost of the financial assurance mechanism. He also noted that insurance for this requires a$3 million deposit, and covers only costs over and above $3 million in closure for a $750,000 premium. Vice Chairman Matthew Cummings noted that he doesn't believe that Horne Depot, Jordan's Furniture, Chili's Restaurant or Dickinson do not have $3 million to cover their financial assurance mechanism. Attorney Brad Latham noted that there is no other source. This is not a tactic -- this is an important issue. Selectman Rick Schubert asked what the closing date would be, and Dickinson stated that it would be no later than the end of October. Dickinson noted that they have had issues with uses, spent money on design for the office building which won't take place and had to redesign retaining walls for Jordan's Furniture which will cost $1.5 million, etc. Selectman George Hines felt that we should see what Dickinson can come back with based on this discussion, and see whether the Town could in fact wind up with the entire property in the event of a default on the closure by Dickinson. The Dickinson representatives left the meeting. Litigation Beede - Town Counsel Yvonne Gonzalez reviewed the Beede Superfund Site in the New Hampshire situation. The EPA has offered a settlement of$6.25 per gallon which is higher than the previously negotiated settlement with TRC. On motion by Cummings seconded by Wood, the Board of Selectmen voted to settle this matter at up to $6.25 per gallon. On a roll call vote, all four members present (George Hines left the meeting at 10:45 p.m.) voted in the affirmative and the motion was carried. Pierce Street - Town Counsel Joan Langsam reviewed the Pierce Street issue. The Board agreed to try to get one affordable unit of the four remaining units, and to require the curb and sidewalk to be completed within 30 days of the date of the agreement. On motion by Cummings seconded Wood, the Board of Selectmen agreed to settle the Pierce Street suit under the above circumstances on a roll call vote with all four members voting in the affirmative. Members of the Board noted that the problem was a lack of follow up on the minutes and processing of multiple applications. The CPDC and ZBA should consider a policy that prohibits multiple applications for the same property at the same time. On motion by Cummings seconded by Schubert, the Executive Session Minutes of April 30, 2002 were approved on a roll call vote with all four members voting in the affirmative. Board of Selectmen Meetin4—Executive Session—July 9, 2002 —Page 4 On motion by Cummings seconded by Schubert, the Board voted to adjourn their Executive Session Meeting of July 9, 2002 at 11:05 p.m. with all four members voting in the affirmative. Respectfully submitted, Secretary