Years of turmoil at the Centre of New England, which have delayed its full development, could be nearing an end.
A preliminary settlement agreement prepared by Providence attorney Matthew J. McGowan, who is the receiver for the unsold, undeveloped acres in the mixed-use site, could begin to unravel years of litigation ensnaring the development.
If the settlement is accepted by the various parties, it would allow the receiver and Coventry, along with other major parties, to work out specific, individual agreements.
Among other threads, the settlement proposes to continue the now-20-year-old tax treaty that covers center properties in Coventry, and allows individual owners to phase in taxes over 10 years, according to Coventry Town Manager Graham Waters.
This would help to market the available land in the commercial section of the development, according to McGowan, who was appointed four years ago as receiver.
The proposed settlement, recently taken under advisement by Rhode Island Superior Court Judge Michael Silverstein, would also establish a panel of center-based property owners to oversee the maintenance of the privately owned access road and utilities. Under the preliminary settlement, center owners would pay assessments under a system yet to be determined, which would cover road and other infrastructure repairs.
The receiver would continue to direct proceeds from the sale of undeveloped properties at the 475-acre center to pay creditors.
These include a lender, Realty Financial Partners, of Boston, which holds mortgages on the center, but only after federal, state and local governments receive payments, as well as other unsecured creditors, McGowan said.
The lender has claimed it is owed more than $100 million, which is more than what McGowan expects the remaining lands are worth.
The settlement provides nothing for another lender, Potomac Realty Capital LLC, whose loans were found by the court to be usurious, and so the mortgage voided, according to McGowan.
Similarly, the proposal has nothing for center developer Nicholas Cambio, who has fought through lawsuits for years to regain control of his site. In the settlement, McGowan said efforts to reach a settlement with Cambio have been “futile.”
Cambio spoke through his attorney, Richard Riendeau, who said the receiver should be continuing the case against the remaining lender, rather than pursuing a settlement.
“He has the equivalent of a straight flush and he’s throwing the cards away to a pair of threes. That’s what he’s doing,” Riendeau said of the receiver.
In addition, Riendeau said the receiver and the lender agreed to an arbitrary settlement, set at $3.2 million, which would be distributed to unsecured creditors. It isn’t based on anything, the attorney argued. “It’s a bogus and phantom figure. All he’s doing is giving away the store, and giving it to RFP [Realty Financial Partners] and maybe the unsecured creditors might get something,” Riendeau said.
The co-borrowers in the case still have an active claim, Riendeau said, and will pursue their cases in court.
According to McGowan, the deteriorating condition of the Centre of New England Boulevard is such that a negotiated end to the case against the remaining mortgage lender is preferable, rather than another two to three years of litigation, with an uncertain outcome.
If McGowan were to win, and the second set of mortgages voided, there would be more funds to repay remaining creditors, he said. But if the receiver were to lose the case, the lender could be entitled to receive the lion’s share of the proceeds, leaving the town and other creditors with little remaining.
Town officials appear eager to put the legal headaches behind them.
In recent years, a few condominiums have been sold in the residential portion of the development, the Highlands at Hopkin Hills, and a small number of new residential properties have been built there. Otherwise, physically, little has been changed, Waters said.
“There’s a lot of housing that still can be built,” said Waters.
Waters said the greatest accomplishment of the past few years has been progress by the receiver in moving the intertwined receivership cases through the courts. About 30 cases involving the center were active when McGowan was appointed.
“The receiver has made progress in the court system,” Waters said. “And now the town is helping the receiver forge ahead with finalizing everything. It’s the largest commercial development in town. And it’s a big source of 30 years of headaches.”
If town officials have their way, the first area for redevelopment will include what has become a massive sand pit adjoining Hopkins Hill Elementary School.
“All that remains is sand,” Waters said. “It’s been sandblasting that neighborhood, quite literally. On days that are too windy, they won’t let the kids go out and play.”
Superintendent Craig Levis said the sand actually gets blown through the classroom windows to some extent. He wants at least a temporary solution before the end of the school year, including potentially through the use of temporary screens alongside the property line.
“It’s been a problem for years, and nothing has been done,” he said, of the infiltration. “Everybody knows it’s a problem.”
