2018-08-02 / Front Page

Council Takes Next Step Toward Armory Sale

By James Merolla and P. Udoma

The City Council voted 4-3 to continue with the next step in the potential $1.685 million sale of a condo unit within the city-owned Armory building at 365 Thames St. to the National Sailing Hall of Fame, at its July 25 meeting.

The council narrowly approved the Purchase and Sale Agreement under the condition that the condominium documents, which were not presented to the councilors by the time of the meeting, must be offered to the public for review, and approved by the council before the sale closes.

The city cannot close on the property without council approval of the documents, which are being worked out across two states. If the documents do not satisfy councilors, they can vote down the sale at that time.

Councilor Jamie Bova, who said she didn’t have enough details to approve the Purchase and Sale Agreement, termed it “a risk” to approve without the condominium documents and voted against it.

City manager Joseph J. Nicholson Jr. disagreed that approving the agreement was risky. “I think risk is the wrong word to use. Maybe just curiosity is the right word to use…” he said.

“There are certain due diligence aspects. The Sailing Hall of Fame wants to get into the building; they want to most likely hire architects and engineers to review what they need to review…. [to see] if this is a good deal for them.”

Of reviewing and approving the condominium documents, Mayor Harry Winthrop said, “We review them in detail; if we don’t like them, we vote them down, and the deal dies.” City Solicitor Christopher Behan added, “Both parties can get out of this deal if they don’t like the condominium documents. You have to use good faith.”

Councilor Lynn Ceglie said it was simply another step in the process, and Winthrop added, “This doesn’t allow us to close on the property.”

The Council amended its initial resolution and voted 7-0 to include approval of the condominium documents prior to closing.

Councilor Kate Leonard, who also voted against approving the Purchase and Sale Agreement, said, “I looked at the sections of this that were ‘to be determined’… and… I can’t do it like this.”

“My sense of stewardship for a historic building demands that we do the responsible thing,” said Councilor Susan Taylor, who voted against approving the Purchase and Sale Agreement, “which is to try to find a situation where the city can be a part of taking care of [the building].”

According to Behan and Nicholson, approval of the Purchase and Sale Agreement was necessary so that the Sailing Hall of Fame, based in Annapolis, Maryland, can get its financial backing in order.

But according to local real estate professionals, approval of the Purchase and Sale Agreement does not constitute a “sale.” Instead, the document provides for the basic terms of the transaction. This includes use of the unit for a non-profit museum, a mutual right of first refusal in the event of a later sale of any unit, and the provision that the proposed museum unit remain on the City tax rolls.

There are several avenues of fact-finding still to be accomplished, any of which allows either the City or the buyer to opt out of the deal.

At the meeting, several references were made to “the devil being in the details.” The Council has ensured that they will have ongoing input into this transaction at a granular level.

David Elwell, a board member of the Hall of Fame, told the council that the Hall of Fame has $2.5 million in the bank, without any debt. “We need to raise, in order to open the doors, about another [$1.7 million]…” he said. “There will be no debt on the building. We have the money to close on the building tomorrow, if the city was in a position to do it.”

Nicholson said the condo documents would be ready to pass to the council for the next phase. Once both parties are satisfied, he said, the documents would be available for public view, discussion, and vote by the city.

Winthrop said that he wanted the documents to be ready “as soon as possible, so they can be voted upon by this council” before the November elections.

Among those opposing the sale were Friends of the Waterfront, which has submitted a petition with 2,000 names, to voice its protest.

In other matters:

. The City Council accepted an ordinance upon first reading, regarding a recommendation from the Planning Board for a change in the city’s zoning ordinance, approving a Development Plan Review. The ordinance would change the review order process for major building projects of all types that would have a significant impact on the public. The new review committee would be comprised of planners, engineers, zoning officials, other volunteers, all under the supervision of City Planner Christine O’Grady.

. Received a modified 20-day joint public notice for plan study before the potential approval of the application for commercial development of Scott’s Wharf, LLC at 4 Commercial Wharf, to redevelop the site as a boutique hotel, retail and office space, with 166 parking spaces, and the conversion of an existing boat ramp to accommodate construction of a stormwater treatment facility. The project has CRMC and RIDEM approval.

. Approved acceptance of the contract to improve a section of Ellery Road for $290,000 in reconstruction costs.

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