By MARK SILBERSTEIN
Sisters Nancie Trasko and Angela Burgio, both city dwellers
who’ve grown up in the Federal Hill section of Providence, have
enjoyed their summertime escape to cottages they own in the
private Rocky Beach community. For 55 years the two have fled
their urban surroundings for a chance to walk along a quiet
stretch of sand, or just sit and watch the many boaters from their
prime viewing spots along Narragansett Bay.
But Tuesday, Trasko and Burgio along with other homeowners were
dealt a major setback in the Rocky Beach Association’s ongoing
legal battle to halt the sale of the land where the cottages rest
after U.S. District Court Judge Ronald Legueux ruled in favor of
the receiver’s wishes to sell Rocky Beach as a package deal along
with the former Rocky Point Amusement Park to make up for losses
from a failed loan the Small Business Administration made to the
former Moneta Capital and its principal, Arnold Kilberg.
Mark Hayward, district director for the SBA, said he had not
reviewed the court ruling but the agency is “pleased” with the
decision and he expects a second hearing, finally clearing the way
for the purchase and sales agreement with Vanderbilt, LLC on Jan.
10, 2005.
“We lost,” said Pegee Malcolm with a frown after Judge Legueux
announced his ruling following a hearing on the case in
Providence. But Malcolm, president of the Rocky Beach Association
and whose family has owned a cottage there since the 1920s,
quickly conferred with fellow board members and agreed to ask
their legal counsel to seek to overturn the ruling with the 1st
U.S. Circuit Court of Appeals in Boston.
Lawyers Jeff Schreck and Timothy More believed that the tenants
at Rocky Beach were entitled to a “first right of refusal” of the
offer made by Arnold Goodstein and Vanderbilt, LLC, a South
Carolina developer that offered to pay the SBA $25 million for
both parcels of land. Goodstein had bid $11.25 million for the 29
acres at Rocky Beach and another $13.75 million for the 124 acres
at Rocky Point. But Schreck, who argued the case for the
association before Legueux, could not produce evidence to satisfy
the court that Vanderbilt’s $11.25 million offer for Rocky Beach
was unreasonable.
“They don’t have any rights to stay on that property,” Legueux
angrily told Schreck, calling the homeowners’ last two years at
Rocky Beach a “gift” because the receiver was not charging rent
while a buyer was being sought for the land.
Legueux blasted Schreck’s attempts to defend his clients in the
case, saying that the purchase and sales agreement the SBA signed
with Vanderbilt clearly gave the tenants the right to purchase the
property at the same value Goodstein’s company had offered for the
sale, and they had six months to reach a decision. Association
members confirmed the clock has been ticking since June and is
scheduled to run out December 4.
“What evidence do you have that that price is unreasonable?”
Legueux asked of Schreck, who told the judge that the association
did not conduct an appraisal that would have challenged the $11.25
million value Goodstein’s offer placed on the land.
“That’s less than the fair market value of the property,”
Legueux said of Vanderbilt’s offer, emphasizing that it was the
receiver’s obligation to get as much money as they could from the
sale to recoup the federal government’s losses. “What do you think
the price should be?” Legueux questioned Schreck. “If you can’t
tell me, then we’re wasting our time.”
Legueux repeatedly asked Schreck why he hadn’t offered any real
estate expertise as testimony to support the association’s case,
or any supportive documentation or estimates that would have
proven that the offer from Vanderbilt was out of line.
“That’s the only way you can prevent this sale,” Legueux told
him.
As some of the Rocky Beach tenants assembled outside of the
courtroom after the hearing concluded, they stood quietly
listening to More and Schreck’s recap of the proceedings and the
options they could employ to appeal the case. Many appeared
stunned and shaken by the ruling.
Trasko, 73, and Burgio, 72, recalled when they first began
visiting Rocky Beach as teenagers in the 1940s, first going up the
street to Rocky Point, where an aunt ran a concessions stand. The
sisters eventually purchased their own cottages, traveling
regularly to the waterfront bungalows between April and October
every year since.
“One day we had an awful low tide and we found a little
seahorse in the water,” Trasko reminisced, recalling the
therapeutic effects of the salt water elderly visitors to the
beach enjoyed. “We’re devastated,” she added about the prospect of
losing her home away from home.
“I don’t know what it’s like to live in the city in the
summer.” Her sister, Angela, concurred. “You talk to someone, they
all have tears in their eyes.”
Attorneys More and Schreck expected that by filing an appeal
the court would have no choice but to hold off on the disposition
of Rocky Beach.
The court also agreed to allow the receiver to advertise for
additional bidders in the event they could attract a higher price
than Vanderbilt has already offered for the property. More
suggested that ruling was made to prevent the Rocky Beach
Association from creating the likelihood that they could raise
enough capital on their own to buy the land.
Vanderbilt has plans to build 340 luxury housing units on the
former park and leased land parcels. The agreement also requires
Vanderbilt to provide public access to the shoreline and donate
open space to the city.
Hayward said the SBA delivered a check in the amount of
$120,000 to the city yesterday for taxes on the property. He also
said the agency has spent $17,000 since fire destroyed a park
building last summer for police protection.
“We’re very happy, there haven’t been any incidents,” he said.
“We’re very anxious to convey [the property].”
