Future clouded for once-touted Centre of New England

HALF FULL OR HALF EMPTY?: Cars drive by the Urgent Care facility in the Centre of New England Boulevard. Even though it is only partially built, the Centre of New England is the largest commercial development in Coventry and generates several million dollars in revenue annually for the town. / PBN PHOTO/MICHAEL SALERNO
HALF FULL OR HALF EMPTY?: Cars drive by the Urgent Care facility in the Centre of New England Boulevard. Even though it is only partially built, the Centre of New England is the largest commercial development in Coventry and generates several million dollars in revenue annually for the town. / PBN PHOTO/MICHAEL SALERNO

The vision of the Centre of New England was grand. It was to be the largest commercial development in Rhode Island, with more retail space than Providence Place mall.

The development would span three towns, but was an economic coup for Coventry, where most of the property is located. It would include 3,400 residential units, divided among condominiums, apartments and an assisted-living facility.

And it would replace the heavy industry that occasionally obscured Interstate 95 with windblown dust. The cement manufacturing and mining businesses that had dominated the area would be replaced with new hotels, restaurants and retail stores.

On paper, this remains the vision. But today the Centre of New England is a development interrupted, with much of the 475-acre property ensnared in lawsuits.

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Coventry says it is owed nearly $1.5 million in unpaid fees for sewer service. The embattled developer, Nicholas E. Cambio, is fighting to regain control of the undeveloped property that’s now under the control of a court-appointed receiver.

And residents such as Barbara Mancini, who bought her condo in 2007, are left to wonder about the future value of their properties.

“Everybody [who] has sold in here has taken a loss. Not huge, but a loss,” she said.

So what went wrong?

DEVELOPMENT FREEZE

Cambio, the president and chief operating officer of Universal Properties Group, had built several thousand single-family homes and apartments in Rhode Island before he started the Centre of New England project.

He is responsible for a large portion of the Warwick retail landscape – Bald Hill Commons and Warwick Centre, both on Bald Hill Road.

Cambio, who declined to be photographed for this story, said he first started looking at the Coventry area in 1985, initially through his purchase of a 49.6-acre gravel mining business. Over the next 20 years, he assembled the land for what would become the Centre of New England.

By 2003, Coventry had rezoned the area from heavy industry to allow for the mixed-use development, then approved a master plan that laid out in fine detail what would take place.

But the Centre of New England, the project that was to have been his largest, ran into difficulties about eight years after the master plan allowed the development to begin taking shape.

It wasn’t the national economic recession, or Rhode Island’s own downturn, according to Cambio. His problems instead started, he says, with the lenders who loaned him money at what he described as usurious rates, then moved to take the property through foreclosure when his relationship with them soured.

By 2008, the multiple lawsuits filed in state court over the financing of the land had resulted in a freezing of almost all development activity at the site.

In January 2013, Cambio, as trustee of the trust that owned the remaining acreage, filed for protection from creditors. In an interview, he estimated the area placed under receivership represented about half of the original development footprint.

By August 2015, when the court-appointed receiver, Matthew J. McGowan, filed his third interim report, he noted that 25 different lawsuits had been filed before receivership was initiated.

According to Cambio, he requested state receivership only after he had what he thought was a catastrophic setback in court, in an initial case he pursued against one of his lenders. He thought he was going to lose the properties, he explained.

In the filing, his attorney said that many creditors had demanded immediate payment, while others had started mortgage foreclosure proceedings.

As Cambio explained in an interview, he had begun to invest in the area with the purchase of the gravel-mining business. He operated it for a time, then purchased neighboring properties from other construction businesses. By the time he started planning for the redevelopment, he owned much of the existing Centre footprint.

But some of the land purchases were financed through lenders that provided him with capital when traditional banks would not, Cambio said. After they initiated foreclosure proceedings against him, Cambio sued in response, contending the interest rates they charged were excessively high and violated state law.

The loans were structured as short-term demand notes, according to Cambio.

The complexity of these cases has led McGowan to turn them over to an outside counsel, Pierce Atwood. McGowan would not discuss the status of the cases involving the lenders.

The two lenders, Realty Financial Partners, and Potomac Realty Capital, have argued in various cases that they qualified for a state exemption allowing the greater interest rates, according to the receiver’s filings. Cambio said they increased the rates after he had initially agreed to lower interest terms.

A spokesman for Potomac could not be reached for comment.

Boston-based Realty Financial Partners said in a statement to Providence Business News that, “The claims made in this case are currently under review by Superior Court Judge Michael Silverstein. … We look forward to each of these matters being adjudicated in due time.”

It is unclear how much land remains in receivership at the Centre of New England. The receiver, when asked, said he had not calculated the acreage involved.

For the past two years, about half of the undeveloped area, as well as the access road and underground utilities, has been under the control of McGowan, a Providence attorney.

He says five business entities in receivership hold the land and assets that are unsold or undeveloped at the Centre of New England. He says a sixth manages the common-area maintenance at the park.

In addition to the road, called the Centre of New England Boulevard, and the sewer and water infrastructure beneath it, properties in receivership include 11 lots in Coventry, one in West Greenwich and one in East Greenwich.

As McGowan is able to sell properties, including condominiums at The Highlands, he said creditors are being repaid, including Coventry. According to court filings, through a residential real estate company the receiver has sold 19 condominiums. McGowan remains in discussions with people interested in purchasing available land, he said.

“We have people who have expressed an interest in buying portions of it,” McGowan said.

Recently, according to McGowan’s interim report, a letter of intent was signed with a developer to build an age-restricted housing development on a 5-acre property on the West Greenwich side of the park.

WON’T GO QUIETLY

But Cambio, 68, promises not to go quietly. He does not want his property sold and believes it should be returned to him. He contends that if he prevails in court, the loan documents that caused his financial distress will be voided and he will regain control of all of the contested land. He has been critical of the receiver and his work.

In court responses, Cambio has questioned the amount of money the receiver has spent in maintaining the property, and requested a court-ordered audit of expenses. He contends the receiver has not properly maintained the road or the landscaping at the Centre of New England, and noted its appearance is declining.

The six-lane road itself is incomplete, cutting the development in half.

Much of the commercial space in the project has been sold and developed, occupied by major retailers such as The Home Depot, Wal-Mart and BJ’s, an assisted-living center and a La Quinta Inn.

But various plans for the remaining commercial acreage fell through, including what was once intended to be a 400,000-square-foot retail mall on the West Greenwich side of the land.

The residential neighborhoods planned for Coventry, meanwhile, remain partially developed, impacted by what’s happened to the remaining land. The two largest include Village Green, an age-restricted condominium development near Wal-Mart, and The Highlands at Hopkins Hill, a development of 120 detached homes. The 85-unit Village Green is nearly complete. But less than half of the 264 homes planned for The Highlands have been built.

Mancini says she was attracted to the site by what she saw on a development plan. Downsizing from a larger house in Coventry, Mancini had submitted her deposit for her Stephanie Drive home before project construction had begun.

“I went to the office and saw the design for what was going in here,” she said. “That they were single, individual units. I loved that.”

Now, she regrets the purchase.

The condos are well-constructed, but the housing development draws water from wells, and a common aquifer, rather than a public water system, said Mancini, which is not what the original residents thought they were getting. She is the treasurer of The Highlands homeowners association, which by 2012 had filed a lawsuit against the developer, primarily focused on the water-service issues.

The incomplete areas of the development are unsightly, Mancini says, and cannot be finished until the area is connected to public water service.

On several streets, bare foundations were left when construction was stopped. But she acknowledged that, “Most of the people are pretty happy with their homes. They’d like to see the undeveloped lots finished.”

MIXED RESULTS

Paul Sprague, the Coventry planning director, estimated some 275 acres of the original site had been placed in receivership. But not all of the undeveloped land was involved. Another developer has since purchased land that wasn’t in receivership at the Highlands, Sprague said, and resumed building.

The Highland condos are selling well, he reported. The standalone structures are placed close together, with small backyards, but are constructed with high-end finishes, and amenities including granite countertops and stainless steel appliances. The landscaping is well-tended.

The Village Green has similar appeal to buyers. Several of the two-bedroom, two-bath units have sold in recent months in the low- to mid-$200s, according to assessment records.

Even partially built, the Centre is the largest commercial development in Coventry and generates several million dollars annually for the town in tax revenue.

Coventry this year is expected to receive nearly $3 million in property tax revenue for the commercial portion of the development, as well as $900,000 in revenue from the two residential developments, The Highlands and Village Green, according to its tax collector.

But it is owed disputed fees involving sewer connections and services, which reach into the seven figures, according to Nicholas Gorham, the town’s attorney.

“The town is owed a significant amount of money,” he said, putting the figure at nearly $1.5 million.

And that has entangled the town, which initially embraced the Centre of New England development and worked closely with Cambio, and developer in their own lawsuits.

The litigation, filed initially by Universal Properties Group, centers around the collection of sewer-related fees. Cambio argues the town has no right to collect them, because he said he installed the sewer lines at his own expense.

“They didn’t invest a damn cent. Not a cent,” he said. “They’re charging for a sewer pipe that they didn’t install. I’m going to bury them. The law is the law.”

Gorham says the town is owed the fees because it provides the sewer service.

The sewer fees, Gorham said, include one-time hookup fees to the town’s system, as well as ongoing usage fees. They relate to both developed and undeveloped properties.

Gorham estimated more than 10 lawsuits were filed by the developer, covering a “wide spectrum” of issues, including impact fees for residential properties.

“Universal sued the town first, and very often thereafter,” Gorham said.

Coventry initially viewed the Centre of New England as an economic-development catalyst, Gorham said. And while the property produces revenue, it hasn’t been developed according to the original plan. And the condition of the property, including the private road, is not attractive to additional development.

“It has the potential to be a tremendous economic engine for the town,” Gorham said. “Which is what it was supposed to be. It clearly has not met that potential.”

Now, the town is trying to resolve the issues by working with the receiver.

“The town has sat down with the receiver,” Gorham said. “While we believe we are owed a great deal of money, we are trying to work with the receiver to make the project what it was envisioned.”

Despite the legal entanglements, the project is viewed by residents with mixed feelings.

Several Coventry Town Council members say it’s been a net win for the town, because it has created at least 1,000 jobs, and provided a shopping and dining destination for local residents. The developed portion of the property includes an assisted-living facility and several hotels.

Glenford Shibley, the Town Council president, says it’s difficult to find parking at the BJ’s on weekends, and the development is reliably busy most days of the week. Most of Coventry would agree the development has been a good thing, he said.

Kerry McGee, another Town Council member, says most visitors are unaware the development has not been completed.

“The average person doesn’t realize that,” he said. “There was a good-faith effort by the town to do what it had to do to get that development to come here.”

Cambio, meanwhile, remains confident he will have the chance to finish what he started.

“I started my business with $20,” he said. “I’ve developed and built thousands of houses. When I get my day in court, which hopefully will be soon, I’m going to win.” •

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