WVN #318: Key Town Center developers gone, questions remain
- Dear Wayland Voter,
Both of the developers who conceived and promoted the Town Center commercial-residential project are now out of the picture.
Town Administrator Fred Turkington announced at a Board of Selectmen meeting on Nov. 2 that Chuck Irving had left Twenty Wayland, LLC to pursue other ventures. Irving is a Wayland resident who often expressed a personal interest in the project at the former Raytheon site. Irving's partner, Dean Stratouly, pulled out months ago.
Turkington and the selectmen put the best face they could on the announcement. Said Turkington: Financial strength "is not an issue." Selectman Chairman Joe Nolan said, "This is not unanticipated." Other responses: Development partnerships change over time. Stop & Shop (the only known potential tenant) remains interested. Other tenants are likely as the economy picks up. KGI, the company that created Twenty Wayland to develop the Route 20 project, remains committed and hopes to break ground in spring or summer. (The selectmen acknowledged that construction could be delayed by a pending lawsuit involving the Historic District Commission, an appeal of Conservation Commission on-site requirements and unfinished ConCom off-site matters which Twenty Wayland has postponed.)
Still, the major players usually don't leave when a project is going well. And as it stands now there is no assurance that anything like the original 370,000-square-foot concept will be built, or indeed anything at all. The selectmen agreed a few weeks ago to demands from Twenty Wayland, rewriting the 2006 Development Agreement. Now the developer's promised $3 million "gift" to the town will materialize slowly if at all and affordably priced condos will not be built.
Before voters approved zoning changes in 2006 to allow such a project, the selectmen and others talked about significant new tax revenues that would help to pay for a new high school and stave off property tax overrides. They offered the prospect of amenities including a bike trail, a developer-owned town green and land for a town-funded municipal building. If Wayland sees any of that, it is not likely to be soon.
Town protected -- or developer?
Questions remain about the financial viability of Twenty Wayland. (Twenty Wayland still owes the town for consulting services as well as overdue wastewater user fees. That doesn't seem to be a good message to signal financial strength.) The original plan was estimated to cost $140 million and included 100 condos in addition to retail, municipal and office space.
It isn't surprising that the lagging economy affected Twenty Wayland. A project built by the KGI-related Great Island Development in Kennebunk, Maine -- also with Stop & Shop as an anchor -- is in trouble. Just two and a half years after opening, the Stop & Shop closed at the end of October.
See an op-ed column by a member of Kennebunk's equivalent of a finance committee:
Wayland selectmen say that the amended Development Agreement will keep the Town Center plan alive while protecting the town's interests. Two of the present selectmen, Joe Nolan and Michael Tichnor, were on the board that signed the original agreement which was said to include protections for the town. Residents learned only recently that necessary documents were never properly filed and the town wasn't protected.
Another complication is the wastewater treatment plant necessary to accommodate the Town Center. Twenty Wayland agreed to pay 70 percent of the cost, now estimated at more than $5 million. The other users of the system, about two dozen residential and small business customers, are worried about the Town Center project collapsing and leaving them to share the cost alone. Town officials, who say the plant must be built in any case, assured users at a meeting this week that the remaining customers wouldn't have to shoulder a huge burden. But how the rest would be paid for isn't known.
Nov. 18 Town Meeting vote
Voters will be asked at the Nov. 18 Special Town Meeting to approve zoning changes requested by the developer reducing the number of affordable housing units from 25 to 12. The Wayland Housing Partnership, a selectmen-appointed committee that advises on affordable housing proposals, opposes the article.
Another Town Meeting article would create an affordable housing trust fund to receive and manage funds from Twenty Wayland provided under the amended Agreement.
In considering their Town Meeting decision, voters may want to study the amended Development Agreement (an appendix in the Special Town Meeting warrant booklet sent to all residents) for clues as to whether the Town Center is viable and whether the town is adequately protected in case things don't go as well as predicted. For example, what if the economy remains in the doldrums and Twenty Wayland disposes of the property? See below.
Summary of amended Development Agreement
With the Oct. 20, 2009 signing of the amendment to the Development Agreement, the selectmen have agreed to "defer" or, perhaps, forego altogether the bulk of the originally promised payments to the town. The 2006 Development Agreement called for the developer to donate $2.8 million (often referred to as "the gift") within 90 days after the first building permit was issued for construction of a building. That would have required a substantial upfront payment to the town. The selectmen had held several agenda discussions over the years, generating a considerable wish list of possible uses for that gift.
Unlike the original Agreement, the October 2009 amendment defines essentially a three-phase project. Phase I would consist of the first 100,000 square feet of gross floor area dedicated to retail and office uses. Phase II would be any additional construction dedicated to retail and office uses as well as 12 rental apartments for affordable housing constructed above the Phase II buildings. Phase III would consist of 88 market-rate condominium units which, based on the terms of the Master Special Permit issued by the Planning Board in January 2008, could commence construction at any time, even as late as January 1, 2020.
Rather than getting the $2.8 million up front, the selectmen agreed to let the developer proceed with Phase I, and if Phase II gets off the ground the developer would donate $500,000 to the Town within 60 days after the first certificate of occupancy is issued. Additional monies (which were never intended to be counted as part of the gift) for the much touted bicycle/rail trail and municipal pad parking lot would not be forthcoming until after 50 percent of Phase II has been constructed and received a certificate of occupancy.
In exchange for a substantial reduction in the number of affordable units, the developer has said it would make incremental fixed dollar payments after the sale of each market-rate condo unit, but only a portion of those payments would be available to subsidize affordable housing elsewhere in town. Those familiar with the costs of developing affordable housing have stated that the dollar payments called for would be insufficient to purchase land and build even the 17 percent of units that other developers are required to build or fund under the town's inclusionary housing bylaw.
Issues of concern
Creation of an Expiration Date - At the Oct. 5, 2009 selectmen's meeting, selectman Michael Tichnor said one benefit of the amended Agreement was an extension of its expiration date until March 28, 2014. However, the original Development Agreement never contained a date certain for its expiration. It seems the selectmen (perhaps incorrectly) are reading a sentence in the original Agreement to mean that any amendments to the 2006 MUOD (Mixed-Use Overlay District) Bylaw cause the Agreement to acquire a five-year expiration date.
Special Town Meeting voted in 2008 and again in 2009 to adopt developer-requested changes to the MUOD Bylaw. Those changes increased the square footage for office use in the MUOD and allowed a pharmacy to have a drive-up window. In each instance, comments from the Planning Board, Finance Committee, and selectmen recommended approval. No member of any of those three boards ever cautioned that approving the proposed changes would trigger the Development Agreement to expire in 2011.
It seems clear that the sentence at issue in the 2006 Agreement was inserted for the protection of the town. (See third full paragraph on page 42, last sentence, in the green Nov. 18 Special Town Meeting warrant booklet.) Its purpose was to assure that if the developer went forward with a project under a bylaw adopted prior to March 28, 2011, the developer would still be bound by the obligations of the 2006 Agreement.
Exhibits C & D It turns out that the two key documents required for the 2006 Agreement to "run with the land" and protect the Town were not attached to that Agreement and were not filed in the chain of title because they had never been drafted. This despite the fact that voters were assured in 2006 that everything had been attended to and the Agreement would be binding on any future owners or others who acquired the land.
Although more than three years overdue, a Supplemental Tax Agreement For Payment In Lieu of Taxes (Exhibit C) and a Notice of Agreement Running with The Land (Exhibit D) were just drafted and executed at the end of October 2009. Each of those documents contains an unusual provision that appears to say that the obligations of the Development Agreement can be released by the signature of any one member of the Board of Selectmen.
Exhibit D was signed by Town Administrator Fred Turkington on Oct. 21, 2009. This raises a question because, at the Selectmen's meeting the evening before, the discussion indicated that no one needed to sign that particular document on behalf of the town. See page 3, WayCAM's On Demand to replay the Selectmen's brief Oct. 20 meeting:
In addition, selectmen did not have a posted meeting on Oct. 21 and so could not have authorized Turkington to execute the document.
The three new Town Center documents appear on pages 57-68 in the Special Town Meeting warrant booklet, but without signatures. Only Anthony DeLuca has signed on behalf of Twenty Wayland, LLC. DeLuca, a KGI principal, is now in charge of the project.
The selectmen will hold a warrant hearing at 7:30 p.m. Monday Nov. 8 at the Town Building to go through the Special Town Meeting booklet with the town moderator and answer questions from the public.
-- WVN Staff
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Wayland Voters Network
Michael Short, Editor