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HomeMy WebLinkAbout1996-04-11 Board of Selectmen Minutes - Executive Session Reading Municipal Light Department Board of Commissioners/Board of Selectmen Meeting Minutes - Executive Session Date: Thursday,_April l I, 1996 Time: 6:00 P.M. Place: Reading Memorial High School, 62 Oakland Road. Readina, MA Present: Messrs. Ames, Hughes, Swyter and Burditt (RMLD Board) Messrs. Rucker and Blomlev (R'Y1LD) Guests: Ken Barna. Jason Sokolov and Robin Daniels (Rubin & Rudman) Peter Hechenbleikner (Town Manager), Ted Cohen (Town Counsel.) and Cheryl Blain (Ted Cohen's colleague) Dan Ensmingen Camille Anthonv, George Hines, Sallv.Hov_ t, and Bruce MacDonald (Selectmen) Note: Mr. Swvter left at 6:30 p.m. Mr. Pacino did not attend. On a motion made by Mr. Hughes and seconded by Mr. Burditt. the Chairman called the Executive Session to order at 6:00 p.m. The Chairman took a poll of the vote: Mr. Hughes. :'-,ve: Mr. Burditt. Ave: Mr. Swvter. Ave: Mr. Ames, Ave. On a motion made. by Mr. Hines and seconded by Mr. Ensmini7er. the Board voted to go into Executive Session for the purpose of discussing the sale of real estate and not to come back into Open Session. The vote was approved by a vote of 4-0-0. I . Sale of 25 Haven Street vlr. Hechenbleikner provided the Board and Selectmen with general background information re4,arding the sale of property at 2- Haven Street. He said the difficulties started last Tuesdav (4/2/96) when Mr. Cohen received a letter from William O'Brien (PJC Realty) indicating their desire to renegotiate the deal due to environmental issues related to the property (Executive Session, Agenda #5, 4/23/96. Exhibit 5). Specifically. an o'I tank had leaked oil on the site and that was the main issue. On Thursdav (4/4/96) Rubin & Rudman prepared a response to Mr. O'Brien ((Executive Session, Agenda #S, 4/23/96, Exhibit 6.). Mr. Hechenbleikner then provided attendees with a copy of a letter he received today (4/l/96) from Peter Schmitz at Brooks Pharmacy (Executive Session, Agenda #5,, 4/23/96, cover page). Messrs. Rucker and Blomlev said if the R.MLD accommodates Brooks' reauest. we would spend 520,000 - .S30,000 best case. and 530.000 - $40,000 worst case. Mr. Cohen said Brooks had an engineer review the site and he estimated a cost of 521,000 to get use of the property and $41.000 to clean it up. Mr. Rucker said we have already removed the tank and dug out the soil. The fuel oil went under the foundation of the building and under the side walk. It is not necessary to remove it frons these locations. but if we do, it is going to be a very expensive process. Mr. Blomlev said it is an area of approximately ten cubic yards. Mr. Rucker added that shoring up the area is where the expense comes in. PaLye ? - MeetinL- Minutes -Executive Session - Anril 11, 1996 1 . Sale of 25 Haven Street (continued) Mr. Barna stated that the contamination was disclosed in the bid specifications and Phase I Report. Mr. Cohen said he has a feeling it was somehow overlooked until the last minute. Mr. Swyter asked if they had adequate time to inspect and review these documents. Mr. Rucker responded that the Purchase and Sale Agreement indicates that they were willing to take the property "as is". Mr. Hechenbleikner asked if they back out, do we have another bidder? Do we have to clean it up before we can sell it'? If so, we may be better off by going ahead and cleaning it up now. Mr. Barna reiterated that they agreed to purchase the property `'as is". However, they are not liable if they choose not to go through with the deal. Nevertheless. they should have focused on this before the Purchase and Sale Agreement was executed. The IER Report was sent to them on January 16. 1996. The Executive Summary of the IER Report explicitly addresses the contamination. and they were in possession of the IER Report six weeks before the Purchase and Sale Agreement was executed. Mr. Cohen said we had several discussions with their lawyer when the Phase II Report crossed his desk. The Purchase and Sale Agreement does have a clause in it that states because the cost of clean-up is over$5.000, they can get out of the agreement. �\1r. Sokolov added. for some reason, they wanted to expedite the closing. Mr. Barna said I don't think they hired a consultant until after they signed the Purchase and Sale Agreement. t Mr. Cohen said then have a Rhode Island lawyer and I'm not sure he is familiar with Massachusetts' re2ulations and laws. When they finally had someone look at it. they came back with these outrageous numbers. Mr. Hechenbleikner said if we sav goodbye Brooks and go out to bid with someone else. we may still end up having to clean it up before it's sold. If so. that means we are no better off, maybe worse off. Perhaps we should continue to deal with Brooks in that case. Mr. Cohen said there seems to be a real communication problem because they seem to want us to clean it up and go ahead with the project while indicating at the same time they want to terminate the agreement. Mr. Hechenbleikner said he spoke with Peter Schmitzz at about 5:00 p.m. today (4/11) and he indicated they would be willing to put in the 55,000 toward the total cost of the cleanup. indicated in the Purchase and Sale .agreement. and they have put a lot of effort and money, into this and they want to stay in Reading. P Page ? - Meeting Minutes -Executive Session - April 11. 1996 I . Sale of 25 Haven Street ("continued) Mr. Barna responded they say one thing and then write a letter to the contrary. The letter of April .2 is a tough letter. It indicates this is where we stand but verbally they indicate perhaps this is not where we stand. For example, one of the issues is that we have to give them an open ended indemnification and I do not recommend that. They don't have Massachusetts counsel, so we have to say to them "here are Massachusetts' regulations and laws governing this issue". We asked them "whv don't you accept the AUL` Ms. Daniels said that unless you have a daycare center or vegetable garden in the contaminated area, it is not necessary to clean it up. Mr. Cohen said they need to reiterate their stand from one source. We hear one thing from one source and some different from another. Mr. Barna said this is cominz from Brooks. attorneys don't issue written letters on their own. V Ms. Daniels said previously people were spending money needlessly to clean-up properties to background levels. even if the property was located in an area where the contamination was not posing a risk. However, recent revisions made it possible for people to do,a "risk- based clean-up". In the case of 25 Haven Street, it's possible to sell the property under an AUL, in which case future excavation of the property would have to be done under the supervision of an LSP, no fruit or vegetables can be grown on the property. and no davcare centers can be operated on the property. The AUL becomes effective by recording a Notice of Activitv and Use Limitation at the Reaistn�. Also, an AUL can be removed from a deed if they take samples two to three years from now and the levels of contamination have dissipated to legal limits. In any event, since the property is being sold to Brooks for commercial use, there is no need for additional clean-up. Mr. Sokolov reiterated their use does not require this additional cleaning. t Mr. Barna agreed. Mr. Cohen said we aaree with Ms. Daniels. We told them all aiong that the property was -oing to have an AUL on it, and we thought they were going to accept that. We are at the point where they are saying no and they want toy ao beyond the AUL and shore to the building, the question is what happens next? Some purchasers will accept AUL's and some will not. .also. some banks will accept them and some will not. It's likely that someone will take an AUL. If not, we will have:no choice but to clean it up ourselves. Mr. Cohen continued saying this property is going to be strictly for commercial use. It is not going to have school children running around on it and it's not going to be used as a residence. You know how lona it took you to find a buyer. Maybe no one will accept the AUL and we will have to go forward and clean it up at a cost of S20.000. Therefore. it is difficult to say whether you will find another willing buyer and how they will react to the AUL. Part of the problem is the estimates we have from IES. We need more formal estimates so we can determine if we need to clean it up, whether or not we have a buver in place. I don't know what it's going to take for Brooks to go forward. The open-ended indemnification they want is totaliv unreasonable. I`m inclined to try to deal with them directly, but we p ey getting a . .g -,,,. � ,� mtxea signals. PaLe 4 - Meeting Minutes -Executive Session - April 11. 1.996 1 . Sale of 25 Haven Street (continued) Mr. Rucker said meeting the conditions outlined by Brooks makes the P1 bid higher and they were willing to accept the property "as is". This essentially reduces the value of their bid. Mr. Barna asked if we accommodate them, are we still under Chapter OB' Is the RNILD under Chapter 30B? Mr. Cohen responded we have certain flexibility under Chapter 30B. Mr. Hines said right now we are dealing with one buyer. Mr. Cohen said .atlantic would like them out now. but Brooks has another two to three years on their lease. Mr. Ames said he wanted to hear more about the indemnification. Ms. Daniels said the Town and the RNILD are now protected under the Purchase and Sale Agreement, but Brooks want to flip that and have the Town and the RMLD be responsible for anv future claims associated with the property. Mr. Hechenbleikner said we currently own that risk right now, but we are trying to push that risk off to someone else--namely Brooks. NIr. Hines said it would be helpful if we give Messrs. Hechenbleikner and Rucker authority to establish what Brooks' position is and if they want to get out of the deal. If they are placing too much risk on the Town, then we should let them out. a Mr. Cohen replied that it is his understanding that unless we agree to their terms, they will terminate the agreement tomorrow. Their attorney_ is under the impression that they have to make a decision by April 15. Ms. Anthonv said then have legitimate concerns and we have to come to some agreement so we can all come out of this feeling comfortable with what we have done. I hate to see it fall through. Mr. Ensminaer said we could split the lot and the building and the Town could keep the lot. That wav, we could keep the contamination on Town property. use it as a parking lot. and sell the building separately. Mr. Cohen said that will lessen the value of the building and we want to get as much for it as we can. Page 5 - Meeting Minutes -Executive Session - April 11. 1996 1 . Sale of 25 Haven Street (continued) Mr. Rucker said if the scope of the meeting is to find out what's on their mind. after that, what do we do then? As long as their terms are within the bid and Purchase and Sale Agreement; he can deal with that. But to ao beyond that and spend additional monies. his response tends to be "no". They obviously want to lessen the amount of their liability. That is clearly specified in the Purchase and Sale Agreement--it's all there and they agreed to take the property "as is". When we purchased the 2130 Ash Street property, we, negotiated in the escrow and we walked into it knowingly. so we were in their shoes when we made that deal. IIr. Hines said Messrs. Hechenbleikner and Rucker should meet with Brooks and find out specifically what they want and come back to the Board of Con=ssioners and Selectmen for action. Ms. Anthonv asked if we could aive them an extension. Mr. Hines responded an extension will give us time to find out what they want. NVe are. partners (Selectmen/RMLD.) and we have to work together to resolve this amicably. Mr. Ames inquired how long will it take to clean it up" Mr. Rucker responded eight to ten weeks because it has to ao out to bid. Ms. Daniels said it has to be done in stages--it cannot be done all at once. ylr. Rucker said if we are going to Give them an extension, n;avbe it should be long enough to allow for the clean-up. Mr. Barna said there is such poor communication between Brooks'and their counsel that perhaps Brooks and their counsel should meet with Messrs. Hechenbleikner and Rucker. Mr. MacDonald said we should give them an extension to determine what they want and what this letter means. and have Messrs. Hechenbleikner and Rucker report back to the Board for further action. if any. Mr. Cohen asked what if Brooks say they will buy the property if it's cleaned up`? Mr. Rucker responded unless the Board gives him different directions, his answer is "no" because right now he doesn't have authority outside of the Purchase and Sale Agreement and the Board would have to give him authority to amend this. Mr. MacDonald said the way to negotiate that is to say to them "this is all subject to Board approval". Mr. Cohen said in addition to Messrs. Hechenbleikner and Rucker, he and Mr. Barna should attend the meeting with Brooks and their attorney. Paze 6 - Meeting. Minutes -Executive Session - April 11. 1.996 1 . Sale of 25 Haven Street (continued) On a motion made by Mr. MacDonald and seconded by Mr. Ensnunger, the Board of Selectmen authorized an extension of 30 days in the Purchase and Sale Agreement of 2'5 Haven Street. and the Town Manager and the RMLD General Mana(_,er negotiate subject to final approval by both Boards. Mr. Burditt made a motion for the Board of Commissioners' motion to be the same as the Selectmen. It was seconded by Mr. Hubrhes. Mr. Hughes also requested that the motion be amended to reflect an extension date to May 15 instead of 30 days. On a roll call vote, the Board of Selectmen unanimously agreed to amend the motion to reflect the extension date to Mav 15. The motion was passed unanimously by both Boards. The Chairman polled the vote: NIr. Hughes, aye: Mr. Burditt, Ave. Mr. Ames. Ave. Barna asked if nothina is resolved after this meetinz, can we call off this deal" There was a general consensus of"yes". Mr. Hines requested Messrs. Hechenbleikner and Rucker to conclude this as expeditiously as possible. Mr. Ames said the Board is comfortable with having Mr. Rucker go out and sell the building. vN Mr. Hines said the Selectmen don't work that way. There bein<T no further business. on a motion made by Nlr. Burditt and seconded by Mr. Hughes, the Board voted to adjourn at 7:330 p.m. The Chairman polled the vote: Mr. Hughes, ,Ave, Mr. Burditt, Ave: Mr. Ames. Ave. On a motion made. by Mr. MacDonald and seconded by Mr. Hines, the Board of Selectmen unanimously voted on a roll call vote to adjourn at 7:30 p.m. Respectfully submitted. Willard J. Burditt Secretary, pro tem /rm