PICKERING WHARF TIF LEGAL OPINION 1999 � Q oc�I kl � 'qui
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CITY OF SALEM - MASSACHUSETTS
WILLIAM J.LUNDREGAN Legal Department JOHN D.KEENAN
City SolicitorAssistant City Solicitor
81 Washington Street - - 93 Washington Street Bo Washington Street
Tel:978-741-3888 Salem, Massachusetts 01970 Tel;978-741-4453
Fax:978-741-8110 Fax:978-740-0072
February 3 , 1999
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Mayor Stanley J. Usovicz, Jr.
Salem City Hall
93 Washington Street
Salem, MA 01970
RE : Pickering Wharf Hotel TIF
Dear Mayor Usovicz :
Please find enclosed my opinion relative to the status of
the Pickering Wharf Hotel TIF.
If you have any questions with reference to this matter,
please do not hesitate to call me .
Very truly yours
W/LLIAMJ. LUNDREGAN
CITY SOLICITOR
WJL/amc
Enclosure
Memo to: Stanley J. Usovicz, Jr. , Mayor
From: William J. Lundregan, City Solicitor
Dated: February 2, 1999
RE: Pickering Wharf Hotel TIF
You have asked me to review the Application for Certified Project,.
Designation - Tax increment Financing Plan (TIF Application)'
submitted by the City and Pickering Wharf Realty Trust. and to
answer the following question: where the City Council Resolutions
authorizing the TIF application specifically designate one of
three subject parcels as the parcel to which the TIF is to apply,
but where the applicants originally intended that the TIF apply to
all three parcels, is there anything in the official record which
permits us to argue to the state that the Resolutions should be
deemed to apply to all three parcels, rather than the one
specifically designated by the Council? In seeking an answer to
this question, I have thoroughly reviewed the documents that were
provided to me, to wit:
1 . the Application for Certified Project Designation - Tax
increment Financing Plan (TIF Application) ;
2 . the Memorandum of Understanding executed by J. Hilary Rocket,
Trustee, for the Pickering Wharf Realty Trust, and by Stanley J.
Usovicz, Jr. , Mayor, for the City of Salem;
3 . a letter dated January 14, 1999 to George Mazareas, Director of
Economic Assistance Coordinating Council, written by someone whose
name and signature have been removed from my copy;
4 . a letter dated November 20, 1998 to Mayor Usovicz from J.
Hilary Rockett, Jr. ; and
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5. the original deed of the subject property from the Trustees of
the Pickering Wharf Nominee Trust to J. Hilary Rockett, Trustee of
Pickering Wharf Realty Trust . This deed is dated June 6, 1996 and
recorded at the Essex South District Registry of Deeds in Book
13598, Page 532 .
I have also reviewed the applicable law, specifically: G.L. c. 40,
Sec. 59, the statute which authorized TIF financing, and the
supporting regulations at 760 C.M.R. 22. 01, et seq.
After an extensive review of the foregoing materials, it is my
opinion that there is no valid way to argue that the TIF
authorized by the City Council can be construed to extend to the
other, neighboring parcels. I see no alternative but to return to
the City Council with a corrective resolution, if the presently-
designated parcel is not intended to be the site where the hotel
is to be built.
Permit me to call your attention to the following matters :
1 . The subject lots are designated as Lots 408, 446 and 447 on the
assessor' s map. The lots correspond to parcel 1 (lots 446 and 408)
and parcel 2 (lot 447) which were conveyed to the Pickering Wharf
Realty Trust by the deed hereinbefore referenced. The said deed
also conveyed twenty-six condominium units comprising the
Pickering Wharf Condominium. According to the November 20, 1998
letter from Rockett to Usovicz, all of this property was intended
to be the beneficiary of the T. I .F. plan.
2 . The Memorandum of Understanding did not designate the property
to be the beneficiary of T. I . F. financing with any greater
specificity than "Pickering Wharf. " Rockett's letter to Usovicz
agrees with this; however, where Rockett seems to think that the
absence of any greater designation adds weight to his argument
that therefore the T . I . F. plan applies to all of his property, I
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am of the opposite opinion: that the absence of any designation
deprives this document of any value as a guide to determining
which properties were supposed to be involved.
3 . Within the T.I . F. Application is a letter dated June 15, 1998
from Mayor Usovicz to Sean Calnan, Director, Massachusetts Office
of Business Development . This letter - evidently meant as an
introduction to the T. I . F. Application - states that, " (t) he
proposed location of the hotel is at the corner of Congress and
Derby Streets . " There is a lot at the corner of Congress and Derby
Streets, but it is Lot 445 . Although this lot is also owned by
Rockett, it is not one of the three lots under discussion. Looking
at the map, one might be able to argue for an expansive
understanding of the phrase "corner of Congress and Derby Streets"
that would include the abutting Lot 446; however, by no stretch
could that phrase be applied to Lot 447 or 408, neither of which
are anywhere near Derby Street .
4 . Also within the T. I . F. within the section
entitled "Applicant
1-folmatlon, " is a dcsignati on of th( nama o-id ' address cf--thc
proposed project . This is given as "Pickering Wharf Hotel, Corner
of Congress Street & Derby Street, Salem, MA 01970 . " The
"Introduction and History of Project Development" which appears in
the body of the Application, itself, also identifies the project
locus as "the corner of Derby and Congress Streets . "
5 . In Section I (C) of the Application, the "tax parcel" is
identified as "Map 34, Lot 446. " There immediately follows the
following "legal description of TIF Zone":
The following condominium unit in the Pickering Wharf Condominium
(the "Condominium") in Salem in the County of Essex and
Commonwealth of Massachusetts, created by and described in the
Master Deed of Pickering Wharf Condominium dated August 3, 1979
recorded with Essex South Registry of Deeds in Book 6624, Page
141, as amended by a First Amendment to Master Deed dated November
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9, 1979, recorded with Essex South Registry of Deeds in Book 6653,
Page 99, by a Second Amendment to Master Deed dated December 28,
1979, recorded with Essex South Registry of Deeds in Book 6667,
Page 39, and as further amended by a Third Amendment to Master
Deed dated April 4, 1980, recorded with Essex South Registry of
Deeds in Book- 6692 Page 336 (said master deed as so amended is
hereinafter referred to as the "Master Deed") :
Biildina 21j-t EercentaaQ In rest
Derby A 10 . 8775
Together with the undivided percentage interests in the common
areas and facilities of the Condominium described in the Master
Deed as set forth for the unit above . . . .
There is simply no way to interpret this designation as being
anything other than what is manifestly is: a very carefully drawn,
particularized designation of a single unit of the condominium as
the intended beneficiary of the T.I.F. financing!
6. Three (3) City Council Resolutions are included within the
T. I. F. Application. The first, dated March 9, 1995, is merely a
general authorization for the City to employ T. I . F. financing as
an economic development tool .
The second Resolution, dated June 11, 1998, is the Resolution
which specifically approved the T. Z . F. Application on behalf of
the Pickering Wharf Realty Trust. This Resolution recites that,
"the proposed certified project is located at the corner of
Congress and Derby Streets, " and gives the legal description as
follows:
The following condominium unit in the Pickering Wharf Condominium
(the "Condominium") in Salem in the County of Essex and
Commonwealth of Massachusetts, created by and described in the
Master Deed of Pickering Wharf Condominium dated August 3, 1979
recorded with Essex South Registry of Deeds in Book 6624, Page
141, as amended by a First Amendment to Master Deed dated November
9, 1979, recorded with Essex South Registry of Deeds in Book 6653,
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Page 99, by a Second Amendment to Master Deed dated December 28,
1979, recorded with Essex South Registry of Deeds in Book 6667,
Ill _-A -.. F...-..6__ ____J_J L... _ 1L-4. .n�. n - --
Faye Jl, GIIU GS 1411.1101 GIIICIIUCU U`l 0. 11111U 1UG 11 d1llCll GJ Cl
Deed dated April 9 , 1980, recorded with Essex South Registry of
Deeds in Book 6692, Page 336 (said master deed as so amended is
hereinafter referred to as the `Master Deed") :
Building Unit Percentage Interest
Derby A 10 . 8775
said unit A, Derby Building being a part of the total Master Deed
described above.
Together with the undivided percentage interests in the common
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areas ' ail' -a Ci ',ties o t -'e"'Condominium- -described l-n the- ii&o�c,.
Deed as set forth for the unit above . . . .
(Emphasis added. )
Once more, there is no way, in good faith, to interpret this
designation as being anything other than what is manifestly is : a
very carefully drawn, particularized designation of a single unit
of the condominium as the intended beneficiary of the T.I .F.
financing!
The third resolution, also dated June 11, 1998, authorized the
City to enter into a T. I . F. Financing Agreement. Once again, this
Resolution designates the "area to be designated as a Tax
Increment Financing Zone" in the identical language used in the
Second Resolution.
Thus, there is simply no basis, in any of the Resolutions which
passed the City Council, for arguing that the Resolutions
authorized T. I . F. financing on all of the Rockett Pickering Wharf
property!
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7 . The Tax Increment Financing Agreement between the City of Salem
and the Pickering Wharf Realty Trust contains no further property
designations .
8 . The letter- dated January 14, 1999 to George Mazareas, Director
of Economic Assistance Coordinating Council, contains the
statement that, " (t) he City voted to approve a TIF to allow
Pickering Wharf Realty Trust to development (sic.) a hotel with
70-140 rooms at Pickering Wharf. " Unfortunately, as we have seen,
the City did no such thing. No such language appears in any of the
votes of the City Council .
9. The letter dated November 20, 1998 from Rockett to Usovicz
contains the following statement : " (t) here was never any mention
of tax parcels or legal descriptions in the motion of the City
Council, nor was there even any discussion of it . " I do not know
whether there was any mention of tax parcels of legal descriptions
in the motions that were presented to the Council, as I do not
have those before me; however, as we have already seen, there
certainly was mention of these matters in the two resolutions that
the Council passed authorizing the T . I . F. application !
10. The law governing T. I . F. applications is clear that they must
be specific to designated parcels of property. G. L. c. 40, Sec. 59
provides, in pertinent part, that:
. . . any city or town by vote of its town meeting, town council, or
city council with the approval of the mayor where required by law,
on its own behalf or in conjunction with one or more cities or
towns, and pursuant to regulations issued by the secretary of the
executive office of communities and development, may adopt and
prosecute a tax increment financing hereinafter referred to as TIF
plan, and do any and all things necessary thereto; provided,
however, that the TIF plan . . . .
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(iii) authorizes tax increment exemptions from property taxes, in
accordance with the Provisions of clause fife;-first of section
five of chapter fifty-nine, for a specified term not to exceed
twenty years, for any parcel of real property which is located in
the TIF zone and for which an agreement has been executed with the
owner thereof ` in accordance with the provisions of paragraph
(v) . . . .
(v) includes executed agreements between such city or town and
each owner of a parcel of real property which is located in such
TIF zone; provided, however, that each such agreement shall
include: (1) all material representations of the parties which
served as the basis for the descriptions contained in the TIF-ratan
in accordance with the provisions of paragraph (ii) ; (2)
detailed �....1 ta��o.^. ..� t11� t3, 3nc-eme-t
maximum percentage of the cost of public improvements that can be
recovered through betterments or special assessments regarding
such parcel of real property pursuant to paragraphs (iii) and
(iv) ; (3) a detailed recitation of all other benefits and
responsibilities inuring to and assumed by the parties to such
agreement; and (4 ) a provision that such agreement shall be
binding upon subsequent owners of such parcel of real property
(vii) is certified as an approved TIF plan by the economic
assistance coordinating council established by section three B of
chapter twenty-three A pursuant to regulations adopted by said
council; provided, however, that the economic assistance
coordinating council shall find, based on the information
submitted in support of the TIF plan by the city or town and such
additional investigation as the economic assistance coordinating
council shall make, and incorporate in its minutes, that the plan
is consistent with the requirements of this section and will
further the public purpose of encouraging increased industrial and
commercial activity in the commonwealth; provided, further, that
a city or town may at any time revoke its designation of a TIE
zone and, as a consequence of such revocation, shall immediately
cease the execution of any additional agreements pursuant to
paragraph (v) ; provided, further, such revocation shall not
affect agreements relative to property tax exemptions and
limitations on betterments and special assessments pursuant to
said paragraph (v) which were executed prior thereto; and
provided, further, that the board, agency or officer of the city
or town authorized pursuant to paragraph (vi) to execute
agreements shall forward to the board of assessors a copy of each
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such agreement, together with a list of the parcels included
therein.
(Emphasis added. )
Similar provisions appear in 760 C.M.R. 22 . 00, et seq. ; see
especially Sec. 22 . 03 (2) , 22. 05, 22 . 07 .
To conclude : the law is clear: T. I. F. Applications must be
approved by the City Council and must specifically identify the
parcel (s) to which they are to apply. The T . I . F. Application
approved by the City Council did specifically identify, in clear
and unambiguous fashion, a single parcel as the intended recipient
of the T. I . F. financing. There is simply no "wriggle room" in any
of the official documents to argue - after the fact - =hat the
T . I . F. plan approved by the City Council was intended to apply to
all of the Rockett property on Pickering Wharf. If such was the
intent of the Council, and the applicants, then they should have
manifested that intent in the Resolutions . At this time, I fear
that I see no alternative but to return to the Council with a
corrective resolution, and (hopefully) prevail upon a majority of
the members to pass it .
I hope that the foregoing has been of assistance. If you have any
further comments or questions regarding this matter, please do not
hesitate to contact me.
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