PORTSMOUTH — The City Council could vote on a proposed application to the National Park Service to redevelop the McIntyre Federal Building with the city's private development partners as soon as July 15, officials have said.
But an attorney hired by the city said Redgate/Kane, the city’s development partners, could still opt out of the process under certain circumstances.
John Sokul told the council at a workshop meeting July 1 that “even though we’re far along in the process the developer does have the right to terminate the agreement if certain things don’t happen.”
“If we don’t get the NPS (National Park Service) application approved, if we don’t reach agreement on a ground lease, if they don’t get required permits and approvals, if they’re unable to line up financing and a few other things,” Sokul said.
Those other issues include if the developers find “unanticipated environmental issues” in portions of the McIntyre building that they haven’t been able to inspect, he said.
“The developer has some rights to terminate the agreement if these things don’t happen and receive its deposit ($400,000) back,” Sokul said.
The city is scheduled to host a question and answer session with its financial consultant David Eaton on Monday, July 8. The public will be able to ask Eaton questions about the draft financial agreement between the city and Redgate/Kane. The meeting is scheduled to begin at 6:30 p.m. in council chambers at City Hall.
The city is working to redevelop the 2.1-acre property through the Historic Monument Program as part of a public/private partnership with Redgate/Kane. If its application is approved by the National Park Service, which administers the program, Portsmouth can get the property for free from the GSA, which owns it, but it must retain the federal building.
Redgate/Kane’s redevelopment plan calls for renovating the McIntyre for office space, building two new mixed-use buildings with commercial and retail on the first floor and 76 high-end apartments above. Fifty-eight of the apartments will be one-bedroom and 18 will be two-bedroom and they will include a total of 92 covered parking spaces. The average rent for the apartments will be $2,975 a month.
During the recent council work session, Councilor Rick Becksted asked what happens to the city if Redgate/Kane were to walk away from the project.
“The city would need to reload essentially,” Sokul replied, and added that could involve deciding if they wanted to acquire the property “without a developer in hand.”
Councilor Ned Raynolds pointed out that sometimes approvals development projects receive in Portsmouth “are challenged in court.”
“Of course the court case holds things up, time is money and we have a recent instance … where a significant project was terminated by the developer,” because of delays caused by legal challenges, Raynolds said.
The developer of the proposed North End Portsmouth mixed-use development told the Portsmouth Herald in May his project would not move forward because of the delays it faced because of legal challenges.
“Is that something we could be looking at,” Raynolds asked.
Sokul replied “it is” and noted such an incident is “expressly dealt with in the development agreement” between the city and Redgate/Kane.
If that happened, he believes the developers could opt out.
Residents connected to the grassroots group Revisit McIntyre as well as others have suggested in recent months that any approval of the current proposed plan would face legal challenges in the courts.