Developer seeks damages from Cranston, alleges political interference on Costco project

COASTAL PARTNERS, a developer that had proposed a project to bring a Costco to the property currently occupied by Mulligan's Island Golf & Entertainment, has filed a demand letter to the city of Cranston seeking tens of millions of dollars in damages, alleging political interference. Above, a proposed site plan for the project. / COURTESY CRANSTON CITY COUNCIL

CRANSTON – The developer behind a proposal to build a Costco at the Mulligan’s Island Golf & Entertainment site has filed a demand letter to the city seeking up to $46 million, alleging that former Mayor Allan W. Fung, Mayor Kenneth J. Hopkins and Carpionato Group LLC have sought to purposely kill the project.

Coastal Partners is claiming that the mayors tried to steer a Costco development project to a site owned by Carpionato Group on Sockanosset Cross Road. The demand letter identifies Carpionato as a “long-time political supporter of and donor to both administrations.”

The city has 40 days to respond to the demand letter before litigation can be filed.

Coastal estimated that the alleged “interference” from the city has cost the company between $30 million and $46 million. The company also expressed its interest in litigating its complaint in court.

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Coastal Partners’ demand letter states, “This sort of political interference and favoritism is antithetical to any notion of open, honest and transparent government. It is also patently unlawful and actionable, and, in a very real sense, now threatens to cost the taxpayers of the city real money.”

Hopkins’ office was not immediately available for comment.

Fung vehemently denied the developer’s claims during an interview Monday with PBN.

“Absolutely ridiculous allegations,” said Fung, who said the developer is “desperate and filing frivolous lawsuits that have no basis from any actions from my administration.”

Fung said that he had had meetings with Coastal, but added, “No way was I trying to steer it to Carpionato or anyone else.”

Fung said, as an attorney, he “knows better” than to try to direct a development anywhere.

“As soon as that application was filed, I was making sure he was given a fair shot. The sad part is [Coastal Partners Principal Michael DiGuiseppe] wouldn’t listen to any advice I did give him.”

Fung would not be specific about what that advice entailed, citing the pending lawsuit.

The company’s original proposal for the site came before the City Plan Commission in December 2020 and at the time, the commission informed the City Council that it would forward a negative recommendation on the project, despite what the developer identified as an “overwhelmingly favorable analysis of the application” by the city’s Planning Department.

The commission said that the application “did not satisfy the Comprehensive Plan” of the city, but the developer claims the commission did not provide specific reasons for its recommendation.

“In light of the Planning Department’s clearly favorable analysis of Coastal’s … application, the Plan Commission’s rejection seemed inexplicable,” the demand letter said. “However, Coastal has since learned that its application was not denied based on the merits of the application and was instead denied on the blatant and unlawful influence of the previous and current mayoral administrations and their longtime political and financial supporter Carpionato Group LLC.”

The company’s demand also noted that “Costco has made it abundantly clear to Mayor Hopkins that it has no interest” in the Sockanosset Cross Road site.

When asked if Carpionato had any role in steering the development of a Costco to their site, or any role in killing the project in another location, Carpionato spokesman Gregg Perry said, “Absolutely not. … In 2017 and 2018 Carpionato was negotiating directly with Costco itself, to go into Sockanossett. We had signed a letter of intent with them. There had been some initial permitting started. But negotiations being what they are, both sides couldn’t come to an agreement and by late 2018 we both walked away from it, and we moved on to other things.”

Every development in Cranston helps other developments, Perry said, adding, “We encourage others and like to see others develop property.”

Recently, the city’s City Council Ordinance Committee rejected the developer’s attempt to restart a zoning process to forward the project with a scaled-down project proposal.

In response to the resubmitted, scaled-back proposal rejected by the City Council in May, Hopkins said at the time, “While I always maintained that the Mulligan’s Island site was not the appropriate location for Costco, I would welcome the opportunity to work with Costco officials to identify a better, more suitable location in our city,” adding, “We have other possible sites in Cranston that Costco should consider and I have directed my administration to reach out to company officials.”

The demand also noted that the city’s denial of the project has “succeeded in driving Costco out of the city, leaving some other municipality to reap the benefits” of such a project.

Chris Bergenheim is the PBN web editor. You may reach him at Bergenheim@PBN.com. Mary MacDonald is a PBN staff writer. You may reach her at MacDonald@PBN.com.

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1 COMMENT

  1. Another mess in Cranston where the prevailing characteristic is mediocrity and NIMBYism. I have to keep an open mind on what Allan Fung has to say, but in truth he is one of the most incompetent and visionless politicians around. Cranston specializes in low cost, ugly, poorly maintained public buildings especially the schools – many examples abound but Cranston West High School is the perfect eyesore. Why be any different when it comes to supporting private investments.