A 5-acre, waterfront parcel on which Promet Marine Services Corp. has operated for 25 years will be sold to the company instead of the Providence Redevelopment Agency, the R.I. Supreme Court ruled.
The March 14 decision reverses a 2006 Providence County Superior Court ruling that allowed the city to exercise its right of first refusal for a state-owned property.
But the company isn’t celebrating yet because the redevelopment agency – the city entity that would buy the property – last week filed an appeal for the court to reconsider, said Joel H. Cohen, Promet’s vice president. For that reason, he’s reserving comment on the case, “other than to say that we certainly are pleased with the outcome.”
The waterfront parcel in the most similar situation is ProvPort, which since May 2007 has been managed by Waterson Terminal Services. That company is operating as owner of the property until 2038, when the city has a right to buy back the 105 acres, said Waterson Facility Director Steve Curtis. The Supreme Court’s decision does set a precedent, but it can’t be directly applied to ProvPort, he added.
And the demand to build residential-use buildings on the ProvPort property isn’t as high as it is for Promet’s property, he said. “We’re also bordered by the wastewater treatment plant, so I doubt they would want to put condos right next to the sewage plant,” Curtis said.
For Promet, the legal battle to purchase the parcel began during 2004, when the R.I. Department of Environmental Management decided that about five acres of Promet’s seven-acre parcel were no longer a necessary state holding. The property had been acquired by the state during the early 1900s through eminent domain, Cohen said.
During May 2005, DEM put the land out to bid and Promet won with an offer of about $1 million.
According to the March Supreme Court decision, written by Justice Francis X. Flaherty, city Director of Planning and Development Thomas Deller was at that time not convinced that the city needed the land.
The decision says that Deller in February 2004 wrote: “If the property is sold to the present tenant for continuation of its use for boat repair, the city has no interest. If Promet decides it is not interested in the property, the city is interested.”
Then, during June 2005, Mayor David N. Cicilline announced – and the City Council approved – the city’s intention to purchase the land. It was sold to the city, with the redevelopment agency acting as buyer.
In a Feb. 15, 2006 ruling in favor of the city, Providence County Superior Court Justice Robert D. Krause wrote in his opinion that Promet’s claim that Deller’s opinion was a denial of first rights by the city “presupposes that Deller actually enjoyed the authority to make the assertion upon which Tidewater [Realty LLC, the company Promet used to bid on the property] relies.”
In its ruling, the Supreme Court upheld that decision, but it reversed the lower court’s ruling that the redevelopment agency had authority to purchase the property.
Flaherty wrote that the agency didn’t have intent to redevelop the property, citing that the land was “encumbered by the lease to Promet.” Since redevelopment is the stated purpose of the agency, it shouldn’t buy the land for another purpose.
Promet has been headquartered on the land since 1973, when it leased the five-acre parcel to go along with the adjacent two-acre parcel, which it had bought during 1968, Cohen said. Now, Promet’s lease expires in 2011, with an option that would extend it to 2021.
But recently, there’s been increased interest from developers for Providence waterfront property, including from Patrick T. Conley, developer of State Pier One and Dock Conley.
At the time of the state’s decision, Conley contacted the city and said that – if the city bought the property – he’d buy it from the city for $1 million more than Promet had bid.
Conley even mailed a $100,000 check, as a deposit, which was never cashed, according to the Superior Court decision reached last week. Conley declined to comment. •
