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2004-03-10 SRA MinutesSRA Minutes March 10, 2004 Page 1 of 7 MINUTES OF THE BOARD MEETING OF THE SALEM REDEVELOPMENT AUTHORITY HELD ON MARCH 10, 2004 A regular meeting of the Salem Redevelopment Authority (SRA) Board was held in the third floor conference room at the City Hall Annex, 120 Washington Street, on Wednesday, March 10, 2004 at 6:00pm. Chairman Robert Curran called the meeting to order and on roll call, the following members were present: Conrad Baldini, Michael Brennan, Michael Connelly, Robert Curran, and Russell Vickers. Joseph Walsh, Executive Director of the SRA, Tania Hartford, Economic Development Planner, and Valerie Gingrich, Clerk were also present. Minutes Mr. Connelly motioned to approve the minutes from the meeting held on February 11, 2004. Mr. Baldini seconded the motion. Motion passed (5-0). New Business 1. Executive Director’s Report Mr. Walsh commented that the night’s agenda is probably the most interesting agenda that the SRA has seen in a while. Mr. Walsh handed out copies of email correspondence between Michael Marcil and himself regarding 18 Crombie Street, and stated that Mr. Marcil has impressed the Mayor with his background in historic preservation. The Mayor has appointed Mr. Marcil to the Historic Commission and his appointment will be confirmed later in the week. Mr. Walsh stated that he will raise any points as the agenda items come up. REDEVELOPMENT AUTHORITY PROJECTS 2. Old Police Station Update Mr. Walsh passed out copies of the letter to Heritage Plaza, which extended the deadline dates for closing financing. Mr. Walsh stated that the deadline has been extended to February 20, 2004. Mr. Walsh distributed correspondence dated February 23, 2004, addressed to Heritage Plaza, which stated that the deadline is past and asked them to attend the meeting to discuss the next steps. Mr. Walsh passed out two more pieces of correspondence, which the SRA was copied on, between Gatsby & Hannah, Citizens Bank’s attorneys, and Heritage Plaza, LLC. Mr. Walsh explained that that Citizens Bank has several concerns. Mr. Walsh stated that the first concern is the City of Salem’s right of reversion. He explained that Citizens Bank has requested correspondence indicating that the City will agree to waive the right of reversion and the right of refusal. Mr. Walsh stated for clarification that this is separate from any SRA Minutes March 10, 2004 Page 2 of 7 SRA action. Mr. Walsh stated that the City has agreed and two documents have been signed and are being held in escrow by the City Solicitor until the closing. Mr. Walsh stated that the second issue is the SRA right of reversion, which will be skipped for a moment. He stated that the third concern is the land swap parcel. Mr. Walsh explained that the previous surveys of the parcel missed a small sliver of land, which previously zigzagged into the parcel, but now makes a straight line. He explained that in 1978, the City and the PEM swapped land to make a straight property line. Mr. Walsh explained that the sliver of land is registered land, so when the deed was filed, the small sliver had to filed with the Land Court. Mr. Walsh explained that yesterday, City Solicitor, John Keenan, filed the deed at the Land Court, which resolved the issue. Mr. Walsh stated that the last concern is the SRA’s right of reversion. He passed out copies of correspondence, and stated that they invited Gatsby & Hannah to attend the meeting, but they were unable and they assured us that the development team can present the concern and the proposed solution to alleviate the bank’s concerns. Mr. Walsh stated that one of the things that will be addressed is the passing of the deadline as stated in the LDA and the second is the SRA’s right of reversion. Attorney John Keilty introduced himself as the borrower’s council and stated that there are a many hoops to go through prior to closing. He stated that the small title issue has been resolved and the last things are the closing date and the proposed amendment to the original agreement. Attorney Keilty explained the SRA’s right of reversion and stated that Citizens Bank is not comfortable with the language. Attorney Keilty explained that the development team has proposed an amendment to the agreement, which would waive the right of reentry and secure the bank’s collateral. Attorney Keilty stated that the amendment would waive the right of reversion and be a side agreement, which would not be recorded. He stated that it is important to remember that the permits run with the land and anyone who might step in if Heritage Plaza defaults would have to abide by those permits. Attorney Keilty stated that the closing date is scheduled for March 16, 2004, but realistically, the closing will occur on March 23rd or 24th. Attorney Keilty stated that he will answer any questions and he gave a brief history of the environmental cleanup of the site and the process of securing financing. Attorney Keilty apologized for the gap in time between the 16th and the 23rd, but stated that those are realistic dates. Mr. Vickers inquired as to which version of the LDA was being proposed to be amended. He further stated that a previous change to the LDA was made in respect to the right of reversion, which gave the bank the ability to procure in a very substantial way. Attorney Keilty agreed and commented that it was for a length of 120 days. Mr. Vickers asked why that would not be acceptable and questioned whether it was a matter of not enough time. Mr. Vickers asked if it is a matter of not enough time. Attorney Keilty stated that the time was the issue and from a title perspective, because of the right of reversion and right of reentry, the title never fully vests in the bank. SRA Minutes March 10, 2004 Page 3 of 7 Mr. Vickers commented that the condition is a standard condition. Attorney Keilty stated that he and the developer agree with him on that, because it is not an unusual condition, but they are having a tough time securing financing. Mr. Vickers suggested that a longer period of time may satisfy Citizens Bank. Attorney Keilty commented that from the pure title standpoint, the bank is always at risk that the SRA will step in. Mr. Vickers asked if the SRA has an obligation to keep the right of reversion. Mr. Walsh stated that the SRA has the right but it is not an obligation. He stated that in the original version of the LDA that was recorded, the period of 120 days was added. Mr. Walsh explained that there is nothing requiring or prohibiting the SRA with regards to the right of reversion. He commented that Attorney Keilty is trying to say that no time period would satisfy Citizens Bank. Attorney Keilty stated that that is correct and they also view it as a marketability issue, in that at what time will the right of reversion go away. Mr. Vickers stated that it is stated clearly in the LDA that it would expire at the time the Certificate of Occupancy (CO) is issued. Mr. Walsh commented that he agrees with Mr. Vickers and agrees that Citizens Bank is entirely wrong with respect to the right of reversion, however, he stated that there is little point arguing it when Citizens Bank is not present and they feel very strongly about it. Mr. Walsh stated that is seems to be purely a title insurance issue. Mr. Bill Luster commented that the language in the LDA is not typically used by banks. He stated that typically redevelopment authorities have reversionary rights, but they are subordinated, which is in effect like waiving them. Mr. Luster stated that redevelopment authorities want to develop the project and expect the bank to step in, in order to get the project done. Mr. Luster stated that he is surprised that they convinced Beverly Cooperative Bank to go along with the right of reversion when they were going to finance through them. Mr. Vickers asked if in the event of default by the developer and foreclosure by the bank, is the LDA still in effect until the CO is issued. Mr. Walsh replied that that is correct and that there are aspects of the LDA that keep going. Mr. Walsh addressed the board and commented that if the board will entertain the amendment request, there are two things they should be aware of: 1) None of the design controls go away; the project will be built as permitted and 2) There is always the doomsday clause, which allow the SRA to step in if a building falls into a blighted condition. However, it is a long process and the worse case scenario. Mr. Walsh stated that the SRA will always have the ultimate authority. Mr. Curran clarified that the bank is asking the SRA to give up their right of reversion and asking to extend the closing to March 25th. Attorney Keilty replied that he is correct. Mr. Connelly inquired whether Citizens Bank is saying that this development team will build the project or another team will do it. Attorney Keilty stated that they will be financing this team, but in the case of foreclosure, it would be these permits that Citizens Bank would be selling at auction. Attorney Keilty provided a copy of the side agreement. SRA Minutes March 10, 2004 Page 4 of 7 Mr. Connelly motioned to allow Mr. Curran and Mr. Walsh to execute the side agreement and to extend the closing date to March 25, 2004. Mr. Vickers seconded. Motion passed (4-0). Design Review Board Recommendations 3. 18 Crombie Street—Approval of the Design Review Board recommendation for approval at the Schematic Design Review level of the rehabilitation of the home at 18 Crombie Street. Mr. Walsh stated that there have been no changes to the project since the board saw it last and the DRB has recommended approval of the schematic design. Mr. Vickers asked Mr. John Goff to refresh his memory as to what piece of the house will be removed. Mr. Goff stated that the one-story rear addition on the west side of the house was built around 1910 and it has no historical significance. Mr. Goff stated that the addition will be removed to restore the house to its original Federal design. Mr. Goff stated that no other portions of the house will be removed. Mr. Baldini motioned to accept the DRB’s recommendation to approve the project at the schematic design level. Mr. Vickers seconded the motion. Motion passed (5-0). DEVELOPMENT PROJECTS Design Review Board Recommendations 4. 289 Derby Street (Coastal Gas Station)—Approval of the Design Review Board recommendation for approval at the Schematic Design level of the redevelopment of the Coastal Gas Station. Mr. Walsh introduced the project and development team and stated that the project has gone through vigorous review and is now recommended for approval with the changes that have been made. Attorney Scott Grover stated that the development team met with the Department of Planning & Community Development and the Design Review Board since the SRA saw the project and he thanked both parties for recommending the changes, which resulted in a better project. Attorney Grover stated that the changes to the project design were aimed at reducing the massing of the building. He stated that the overall height of the building has been reduced, the number of units went from forty-two to thirty-eight, the facade and roofline changed, and there is more public access to the South River. Attorney Grover stated that the project will be reviewed by the Planning Board and the Conservation Commission, and will have to comply with all requirements of Chapter 91, and the Harbor Plan. Attorney Grover introduced Ms. Brigitte Fortin, who reviewed the changes to the plan. Ms. Fortin explained that they carried the front of the building at twenty feet high to continue the existing streetscape, they changed that roof from a mansard to a glass and metal roof, and they carried the design of the front elevation around the side of the building. Mr. Baldini inquired as to how many parking spaces will be located on site. Ms. Fortin stated that there are fifty-seven. Mr. Baldini asked if the access path to the South River will be five feet or ten SRA Minutes March 10, 2004 Page 5 of 7 feet. Attorney Grover stated that it will be ten feet as long as they can coordinate with the Hess Gas Station. Mr. Vickers asked if the underground parking takes up the entire parcel. Ms. Fortin stated that it does. Mr. Vickers motioned to accept the DRB recommendation to approve the schematic design. Mr. Connelly seconded. Motion passed (5-0). Mr. Walsh commended the design team and the DRB members for working hard on revisions. Attorney Grover commented that the process has been an effective one. 5. 10 Federal Street—Approval of the Design Review Board recommendation for approval at the Schematic Design level of the redevelopment of 10 Federal Street. Mr. Walsh introduced the project and stated that the DRB has recommended approval with the caveat that landscaping is not part of the discussion. Attorney Atkins stated that they are currently looking at several options that would add parking to the site. He stated that they are looking at the possibilities of creating a deck level of parking or creating an underground level. Mr. Peter Gearhart, the architect for the project, explained the project, which consists of brick and exterior finish systems for the front and side elevations, and a glass spandrel system for the back elevation. Mr. Gearhart stated that the roof will be metal and that they are currently working on a hydrolic system for the elevator to decrease the head room. Mr. Baldini clarified that the parking has not been decided on. Attorney Atkins stated that they have not decided and they are still working it out. Mr. Walsh commented that parking is not an issue for the project at this time. Mr. Walsh encouraged Attorney Atkins to speak with the Mayor regarding parking needs. He stated that the Peabody Essex Museum contributed funds toward creating parking downtown, and the City and the owners of 10 Federal could combine their efforts. Attorney Atkins stated that they will certainly explore that option. Mr. Connelly motioned to accept the recommendation of the Design Review Board to approve the schematic design for 10 Federal Street. Mr. Baldini seconded. Motion passed (5-0). Mr. Walsh asked the applicant to submit a construction timetable with the final design submission. 6. 266 Essex Street (Bowman’s)—Approval of the Design Review Board recommendation for the proposed changes to the redevelopment at 266 Essex Street. Mr. Walsh introduced the proposal and stated that the contractor for Bowman’s removed materials from the building inappropriately. Mr. Walsh stated that the DRB has recommended approval of the proposed solution. Mr. Mike Lutrykowski explained that the contractor removed the existing cornice work without the permission of the owner. Mr. Lutrykowski stated that the contractor had good intentions but was SRA Minutes March 10, 2004 Page 6 of 7 not aware of the former process. Mr. Lutrykowski presented the proposed changes, which includes replacing the cornice with new materials to match the old cornice as closely as possible. Mr. Connelly motioned to accept the DRB recommendation to approve the proposed changes to the Bowman’s building redevelopment. Mr. Vickers seconded. Motion passed (5-0). Mr. Walsh asked for an update on the construction process. Mr. Lutrykowski stated that they have gone through two contractors and have had structural problems. The upper residential units are expected to be completed in two weeks and the entire project will be finished by the end of May. Mr. Walsh complimented Mr. Lutrykowski for taking the situation seriously and acting quickly to remedy it. Project Introduction 7. 185 Essex Street—Review of proposed window replacement on the second floor at 185 Essex Street. Mr. Walsh stated that the proposal is to replace windows on the upper floor of 185 Essex Street. Mr. Walsh stated that Pamplemousse will be expanding and moving to the first floor at 185 Essex. Mr. Bernard Goba of BGA Architects explained the project, which will include repairing and replacing the nine sash windows on the second floor of the building. Mr. Goba stated that the new windows will be the same color with a wood frame. The windows will be insulated and identical to the existing windows. Mr. Baldini motioned to approve the project. Mr. Vickers seconded the motion. Motion passed (5 - 0). SIGN REVIEW Design Review Recommendations 8. 140 Washington Street (Il Bocca Italiana)—Approval of DRB recommendation for proposed signage along Washington Street and Barton Square. Ms. Hartford explained that the proposed signage will replace the old Troisi’s signage. Ms. Hartford stated that the proposal includes two signs with black letters attached to the storefront and a hanging sign. Ms. Hartford explained that the Goldbergs purchased the building and they are working with H.H. Morant to redo all of the storefronts. Mr. Vickers motioned to accept the DRB recommendation to approve the proposed signage. Mr. Connelly seconded the motion. Motion passed (5-0). SRA Minutes March 10, 2004 Page 7 of 7 OTHER PROJECTS 9. SalemOpen.net (Salem Partnership)—Review of proposal to install antennae in three locations in the downtown to support a wireless internet network in the downtown. Mr. Walsh introduced the project and stated that it is part of the creative economy initiative, which will create a wireless internet “Hot Zone” in the downtown. Mr. Walsh stated that the board will vote on the placement of three antennae. Mr. Walsh introduced Ms. Patricia Zaido to explain the project. Ms. Zaido stated that the project is a joint effort of the Partnership, Eastern Bank, City of Salem, Salem Main Streets Program and Winter Street Architects. Ms. Zaido explained that Michael Oh created a hot zone along Newbury Street in Boston. She explained that Eastern Bank will pay for the initial installation and the goal is to get at least ten additional businesses to buy into the hot zone. The proposed locations for antennae are the Newmark Building, Eastern Bank clock, and the kiosk in Derby Square. Ms. Zaido stated that the building owners are in favor of the project and have given approval. Mr. Walsh explained that the reason for the proposed locations is geographical. Mr. Walsh explained that the City has plans to demo the kiosk, but until the kiosk is removed, it can be used for an antenna. When the kiosk is removed, the antenna will be relocated to a new site in the area. Mr. Baldini stated that the hot zone is a definite plus for the City. Mr. Curran also commented that it is a good idea. Mr. Connelly motioned to approve the installation of three antennae in the downtown. Mr. Baldini seconded the motion. Motion passed (5-0). Mr. Walsh inquired as to when the hot zone will be up and running. Ms. Zaido stated that it will be ready by June 1st. There being no further business, Mr. Connelly motioned to adjourn the meeting. Mr. Vickers seconded the motion. Motion passed (5-0). Meeting stands adjourned. Respectfully submitted, Valerie Gingrich Clerk