Wednesday, April 23, 2014
PORTLAND - The developer of a condominium project that is seen as a boost to the revitalization of the India Street neighborhood is being sued by one of the companies that has worked on the project, as the neighborhood waits for word on the development's future.
Plans for the 24-unit Newbury Lofts condominiums are on hold while the developer, S. Donald Sussman, reassesses the market.
He notified the India Street Neighborhood Association by letter this week that he will provide more information in April about the project's future.
A spokesman for the project, Thomas Federle, said Thursday that Newbury Lofts, as now proposed, would not break even, so it must be reconsidered.
"I think it is (a question of) fitting the right project at the right time," he said.
Federle said the lawsuit is a dispute over how much the plaintiff, Developers Collaborative Predevelopment, should be paid for getting the project approved and ready for development.
Property owners in the neighborhood remain hopeful that some redevelopment will go forward, said Hugh Nazor, a leader of the India Street Neighborhood Association.
"Our number one goal is to get those derelict units down and replaced by residential units," Nazor said. "We want feet on the streets."
Nazor said Sussman thanked neighborhood residents and property owners for their patience in his letter and asked for them to continue to be patient. Nazor said those associated with the project have worked closely with people in the neighborhood on its design.
Developers Collaborative Predevelopment, which coordinated the early stages of Newbury Lofts, and its principal, Kevin Bunker, have sued ReBeCo, the Sussman-owned company that plans the project, and Federle, the real estate attorney who represents ReBeCo.
Sussman is the husband of U.S. Rep. Chellie Pingree and majority share owner of the Portland Press Herald.
The lawsuit says Bunker's company is owed $175,000 for work it did in 2012 getting the project approved and ready for development.
It says the company was promised the payment once the project was ready for development.
The lawsuit also says the two sides agreed to negotiate a development agreement to provide Bunker's company at least 5 percent of the project's cost, which he estimated would be worth $400,000.
The lawsuit claims that sometime after the project was approved by the city in September, the defendants "indicated for the first time that they no longer were interested in pursuing the project."
Federle, in his response, did not dispute that.
"Defendants had consistently raised the specter that, despite everyone's hard work, the project might not go forward," Federle wrote in a statement to the court.
He said in an interview Thursday that the project, as proposed, would not break even.
He said Sussman has people looking at what could be done with the property in the near future, even though its complete redevelopment may take longer.
Federle said the lawsuit is a dispute over how much Developers Collaborative Predevelopment should be paid for the work it did.
"Everybody else has been paid," he said. "His compensation was rooted in the project being built. That said, he has done work and he deserves to get some compensation for it, but he is asking more than what we thought was a fair price."
Bunker's attorney, Christian Chandler, said Thursday that he did not want to argue the case in the media.
Chandler said that if it cannot be resolved, the case will be heard in court.
The first hearing in the case is scheduled for April 3, when Federle will seek to have himself removed from the lawsuit as an individual defendant.
Federle says in court papers that his involvement with the project is strictly as an attorney representing the developer, not as an individual investor.
David Hench can be contacted at 791-6327 or at: