Judge allows work to resume at FM Global site

THE NEW HQ, being built in Johnston at a projected cost of $60M, should still be completed by mid-2009, FM Global said.  /
THE NEW HQ, being built in Johnston at a projected cost of $60M, should still be completed by mid-2009, FM Global said. /

PROVIDENCE – The stop-work order that had halted the issuance of building permits for FM Global’s $60 million new headquarters in Johnston was removed today by a Providence County Superior Court judge, according to FM Global.

Associate Justice Michael A. Silverstein lifted the order this morning, allowing further work permits to be issued by the town, said Steven Zenofsky, spokesman for FM Global. That will allow the HQ project to be completed on time, he said.

The original stop-work order – issued by the Town of Johnston – was the result of a series of appeals to the town by Capital Lease Funding Inc. (NYSE: LSE), which owns FM Global’s current headquarters. Those appeals allege that the town failed to allow enough time for review of the project’s plans before granting its approval.

But Silverstein’s removal of the stop-work order does not mean the appeals do not have merit, said Ed Pare, a lawyer with Brown Rudnick Berlack Israels LLP, who is representing CapLease. Over the next few weeks, both parties will be filing briefs concerning the appeals, he said.

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The judge’s decision follows a May 16 conference in which he met behind closed doors with parties in the dispute. (READ MORE)

In removing the order today, Silverstein cited a “lack of evidence” from CapLease, Zenofsky said. “If there were truly legitimate concerns about traffic and drainage, why would they not put an engineer on the stand in court to testify and support their concerns,” Zenofsky said. “And they had the same opportunity back when it was at the town level.”

Foundation work on the site, which had been allowed to continue because of safety concerns, is now nearing completion, Zenofsky said. “The court’s decision today allows our project to remain on schedule for completion during July 2009.”

Plans for the new headquarters were announced on Dec. 13. (READ MORE) A CapLease subsidiary, Prefco II LP, has owned FM Global’s current headquarters since April 2007; it has a lease with the insurer that will expire in July 2009.

Capital Lease Funding Inc. (NYSE: LSE) is a real estate investment trust with more than $2 billion in assets. For more information, visit www.caplease.com.
FM Global is a commercial and industrial property insurer with roots in Rhode Island that stretch back to 1835. It employs 4,700 people around the world, including nearly 1,700 in Southern New England. Additional information is available at www.fmglobal.com.

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