Thursday, April 24, 2014
PORTLAND – A five-year legal battle over ownership of a partially completed downtown development project appears to be over, according to court documents.
Partners in the Riverwalk development, a $100 million project to build a parking garage, luxury condominiums, an office building and retail space within two blocks bounded by India, Thames, Hancock and Middle streets have been tangled in a lawsuit since 2008. The Ocean Gateway Garage was built, but the rest of the project remains undeveloped.
Parties in the lawsuit have agreed to settle the case, according to a document filed Feb. 28 in Cumberland County Superior Court. However, the parties are currently working out the settlement details and would not comment on the case Friday.
The settlement, once finalized, will open up the long-dormant parcel for development, said Greg Mitchell, the city's economic development director.
"The lawsuit has effectively kept that property off the market," Mitchell said. "Clarity of ownership with a willing seller at a realistic market price will allow for that property to be, I think, acquired and developed in the near term."
The Riverwalk project was once envisioned to be an economic catalyst on the eastern waterfront.
The project would have included 125 luxury condominiums, called The Watermark, on what is now a dirt-covered parcel at the intersection of Fore, Hancock and Thames streets. The project also would have included a five-story office building next to the garage at India and Fore streets, as well as 30,000 square feet of retail shops.
The city agreed to sell the developers an acre of land at the extensions of Commercial and Hancock streets in 2005. It also gave the developers an estimated $5 million property tax break over 13 years.
The project was approved by the Planning Board in 2006. But only the six-story, 750-vehicle parking garage at Middle and Hancock streets was built, which frustrated neighbors. The garage opened just as the real estate market tanked in 2008, and the rest of the project never moved forward.
Hugh Nazor, a co-founder of the India Street Neighborhood Association, recently called the garage "the largest mistake made on the peninsula in decades," because it is under-utilized and blocks ocean views.
Intercontinental Real Estate Corp., of Boston, agreed to finance the $20 million garage in 2007.
After the garage was finished 2008, the dispute over ownership emerged.
Fred Forsley, owner of Shipyard Brewing Co. and a partner in Riverwalk, filed the lawsuit against his Riverwalk partner, Drew Swenson, and Intercontinental Real Estate Corp.
In the lawsuit, Forsley claimed ownership of the parking garage. But Swenson and Paul Nasser, Intercontinental's chief financial officer, claimed a subsequent agreement changed the terms.
The memo conveys 95 percent of Riverwalk's assets to Intercontinental and gives the Boston firm 50 percent ownership of the parking garage. Forsley claimed he never authorized the action outlined in the memo.
Neither Forsley nor Swenson would comment on the settlement being drafted.
Although the details are still not known, Mitchell said the resolution to the lawsuit could jump-start development on the eastern waterfront.
"And resolving the ownership and the ability for that property to be sold and redeveloped would in my opinion allow for more development activity on Portland's East End," Mitchell said.
Staff Writer Randy Billings can be contacted at 791-6346 or at: