By JOHN HOWELL
Remember Rocky Point and the $25 million bid to acquire the
former amusement park and convert it into about 300 units of
luxury housing?
It was to have been only a matter of weeks before a purchase
and sales agreement was finalized and the Small Business
Administration returned to U.S. District Court to have the deal
approved. That was early last November. Now, five months later,
the court has still to act on the agreement, although action could
come in several weeks or maybe more, says Mark Hayward of the SBA.
Hayward said last week that the agency has obtained two of the
three appraisals of the property required by the court.
Exasperated, he wouldn’t venture a guess when the third would be
finalized and his representative could appear before Justice
Ronald Lagueux and close the Rocky Point file.
Hayward said the appraisals would have no bearing on the amount
bid. According to the recently completed statistical revaluation,
the property is worth $18,456,100.
The process, however, raises the possibility that in spite of
the surprise $25 million offer of Vanderbilt LLC, which would pay
off the $14 million the SBA is seeking to recover from the
property and leaves $11 million to spare, the price could go
higher. Based on the deposition of other properties, Hayward said
the court can reopen the bidding process, allowing others to
submit bids for a limited period provided they put a minimum of 10
percent more money on the table and don’t deviate from the
agreement reached.
What’s delayed things, in Mayor Scott Avedisian’s opinion, is
arriving at a reasonable time table in which the developer can
expect to gain all the necessary approvals to move ahead with the
project. SBA was looking to have all the approvals in place within
18 months, but that has been extended to two years.
Even completing the process in two years could prove
challenging. The project, or phases of it, will have to win the
nod of the Coastal Resources Management Council, Department of
Environmental Management, the Planning Board, the Zoning Board of
Review, the City Council, the Sewer Authority and the State
Historic Preservation Commission.
A touchy issue between the city and the SBA is the matter of
taxes. To gain the power to auction off the property last June,
the SBA paid over $1 million in back taxes to the city. Avedisian
argued to have the money set aside so that the city could match
$2.25 million in matching funds the congressional delegation
procured for the preservation of open space and public access to
the waterfront with its stunning view of Narragansett Bay. The
council differed, maintaining the city could leverage what it
wanted in access and open space from the developer through zoning.
The money went into the general fund.
Now that the SBA, a federal agency, controls the property they
claim they are tax exempt. Avedisian won’t argue that, but he said
he has requested the SBA as “a good will gesture” to pay the taxes
because sale proceeds are going to exceed what they are looking to
recover in loan defaults. So far, he hasn’t gotten a response.
Hayward was hesitant to discuss the terms of the purchase and
sales until the agreement is signed. Nonetheless, he said the
agreement will address the issues raised and that, specifically,
“We [the SBA] has no intention of backing off on access.”
The SBA conducted a public auction of the park in July, but
when bidders failed to meet their expected price they entered a
protective bid to maintain control of the property. Publicity
given the auction sparked interest, and within a couple of weeks
the agency had received a dozen inquiries from legitimate
developers and offers that came close to the $14 million they had
hoped to get. The prospects were narrowed down and in an unusual
move, the SBA invited community members including the mayor and
representatives from the council to meet with developers and
review their proposals. What followed was a telephone auction
lasting about two hours with Arnold Goodstein of Vanderbilt
entering the high bid of $25 million.
Goodstein, as well as the others in the auction, had agreed to
26 stipulations that included an environmental cleanup of the
property, to set aside property for open space and access and
demolition costs.
“I expect it [the sales and purchase agreement] to reflect all
the conditions the city had for the sale,” Avedisian said.
One of those provisions is to give Rocky Beach residents first
refusal to buy property they have leased from the park. The mayor
had nothing new to report on the efforts of the residents to
secure the land where their homes are located. He said an option
might be for residents to have first refusal on units the
developer would build.
The mayor was hopeful that there would be some movement on the
park shortly.
“It is like the train station,” he said, referring to the long
talked about intermodal facility connecting the airport terminal
with a station. “The longer it is delayed the more people believe
nothing is going to happen.”
