Developer buying Rocky Point

A company based in South Carolina is believed to have offered $25 million for the property and plans build about 350 residential units.

01:00 AM EST on Thursday, November 6, 2003

BY DANIEL BARBARISI
Journal Staff Writer

WARWICK -- A South Carolina developer reached a tentative agreement with the U.S. Small Business Administration to purchase the former Rocky Point Amusement Park and build condominiums and other residences on the 123-acre site.

According to several city officials and members of the City Council, the property was bought by developer Arnold Goodstein and his company Vanderbilt Capital LLC for $25 million, roughly twice what other developers were reported to be offering.

"What astounds me is the $25 million. That's almost $200,000 an acre," said Councilman Carlo E. Pisaturo Jr., who represents Warwick Neck. "I guess they're going to be some high-dollar units."

The developer is expected to build roughly 350 residential units, many of them condominiums.

The deal was struck late yesterday afternoon during a conference call among the SBA and several final bidders on the property.

Last night, SBA Rhode Island District Director Mark Hayward would only confirm that action has been taken on the Rocky Point property. He said he would not release any details until today.

He noted that an official purchase-and-sale agreement must still be established, that agreement must be approved by a federal court, and numerous city permits and zone changes must be approved before any work could begin on the property.

The SBA administers the Rocky Point property on Warwick Neck in its role as the court-appointed receiver for former owner Moneta Capital Corp.

Councilman Steve Merolla said that if the purchase price is really as high as $25 million, then both the SBA and the original creditors will have their debts paid in full -- believed to be a $14-million investment for the SBA, and millions more for the original creditors.

"The pension investors will now be paid," Merolla said.

City Council President Joseph Solomon said that the number of units that will eventually be built at Rocky Point is by no means final and that the city will be able to wield its zoning authority to determine how that plays out.

"How things are going to go is going to be up to the council."

In return for access to the land for residential development, the city has long demanded Rocky Point's shoreline area for city parkland, public access to the beach area, rights to the pier area so it can serve as a high-speed-ferry stop, and assurance that the concerns of the residents of the Rocky Beach area, part of the northern end of the property, are considered.

Pisaturo said he believes all those demands will be satisfied, and said this proposal also includes a provision to keep Rocky Point's old Shore Dining Hall intact, and use it as either a clubhouse area or as a stop for the high-speed ferry.

"I'm elated at the outcome," Pisaturo said.

The park went out of business in 1995. Its creditors liquidated the property in U.S. Bankruptcy Court in 1999. Soon after, the SBA was appointed to manage the property, and find a long-term use for the site.

The SBA officially took title to the Rocky Point property at an auction in late August, and immediately opened up negotiations with interested developers. It received 17 bids on the project, and narrowed them to a final 7, all believed to be offering roughly $12.5 million for the site. Those developers made their official pitches to SBA and city officials in late September, and then hunkered down to wait for the SBA to make a final decision.