Rocky Point price may end beachfront community

01:00 AM EST on Wednesday, November 12, 2003

BY DANIEL BARBARISI
Journal Staff Writer

WARWICK -- City, state, and federal officials were all smiles and congratulatory handshakes last week after the former Rocky Point Amusement Park was sold for $25 million, roughly twice the expected price, for condominium development.

But one small group heaved a collective groan when they heard about the sale.

The Rocky Beach community, a group of 48 homeowners on 29 acres of the Rocky Point property, had been hoping to purchase that land from the developer once a deal was struck. They have the right of first refusal on the property, meaning if they can match what the developer, Arnold Goodstein of Vanderbilt Capital LLC, based in South Carolina, paid, the property would be theirs.

When they heard the price was $25 million, their hopes were dashed. Pegee Malcolm, vice president of the Rocky Beach Association, said she was stunned when she heard the news.

"I said a swear. I said a big swear. I couldn't believe it. I think that's an exorbitant amount of money," she said.

The expected purchase price had been rumored to be in the range of $12 million to $15 million, and Malcolm said that after meeting Goodstein last month, she was confident her group could have struck a deal with the developer.

"We absolutely were going to be able to work something out," she said.

Now, she isn't so sure. While final numbers have yet to be determined, the 29-acre Rocky Beach area is roughly one-quarter of the 123-acre Rocky Point property, and presumably would command at least a quarter of the $25 million total purchase price.

"It may well have changed everyone's plans. The financial realities may now make it more difficult to price," said U.S. Rep. James R. Langevin, who has been in communication with both sides through the process.

The land is probably even more valuable proportionately, Malcolm said. The Rocky Beach area is some of the best land for development in the entire parcel, as it's free of the asphalt covering the old amusement park, and is blessed with a relatively smooth gradient.

The U.S. Small Business Administration, which took control of the property at an August auction and negotiated its sale to Vanderbilt Capital, notes that taking the concerns of Rocky Beach into consideration was a condition of the sale. The developer has agreed to do so -- but what that will mean in practice is anyone's guess. Langevin said he was still confident that some agreement can be worked out.

"There's really no reason why the developer can't sit down and negotiate in good faith," Langevin said, adding that the fate of Rocky Beach will probably be watched very closely by the City Council, which wields the authority to grant the zoning changes the developer needs to build more than 300 high-end condominium units on the site.

But even though there's still hope, there's also an understanding that the 32 part-time and 16 year-round residents of Rocky Beach could lose their homes.

"If they can't [reach agreement], and there's problems and people need to be relocated, obviously our priority would be people who don't have other homes," said Mayor Scott Avedisian.

Avedisian and Langevin said city and state government could give low-interest loans and assistance from the city's Housing Authority.