The city Administration has reached an agreement with developer Tim Flannery on parking for One Riverfront Plaza, which would clear the way for Flannery to sell the building.

The agreement, which still must be approved by the City Council, would amend the city’s agreement with Flannery in regard to the parking garage next to the office building that is home to one of the largest companies in downtown Westbrook, Disability Reinsurance Management Services.

The city reached the agreement with Flannery to resolve a dispute that arose between the developer and the city over a letter from former Mayor Don Esty. In the letter, Esty promised Flannery the use of nearly half the spots (90) in the so-called “CVS” lot between Main Street and William Clarke Drive. But he did so without the consent of the City Council.

Flannery has maintained that he is entitled to the spots because Esty promised them to him. The city, however, has said they don’t believe he is legally entitled to them because the council did not approve of the commitment made by Esty.

The new agreement would resolve the disagreement by giving the owner of One Riverfront Plaza the right to lease 90 parking spaces from the city. City Administrator Jerre Bryant said those spaces would not be limited to the CVS lot, they could be located anywhere within a 1,000 foot radius of the office building.

Bryant said the city had not yet identified where those spaces would be located, but he said the plans call for the spaces to come from both existing and new parking lots. While he would not name where the new lots would be located, Bryant said the existing CVS lot as well as lots on Ash and Church streets would possibly be utilized for the additional spaces.

If the spaces come from new parking lots, the city would pay for the construction of the lots. The city would also have the right to relocate the spaces from time to time as necessary, Bryant added.

In addition, Bryant said the new agreement would grant the owner of the office building eight five-year options to extend the lease agreement for the parking garage after the initial 20-year lease expires. In other words, the owner would have the option of leasing the full parking garage for up to 40 years, after the expiration of the 20-year lease.

While the new agreement would give the owner the right to extend the lease, it would also give the owner the right to purchase the parking garage outright from the city at a fair market value when the initial 20-year lease expires. The owner would also have the right of first refusal to purchase the parking garage if the city were to sell the garage during the initial lease period.

Bryant said the new agreement calls for the owner of the office building to make an up-front payment of $250,000 to the city and it commits Flannery to invest a minimum of $1 million in new development in downtown Westbrook within five years.

“It’s a good deal for the city,” Bryant said.

Bryant said the new agreement also clears the way for the imminent sale of the building. Bryant said the building’s potential buyers were involved in talks with the city, but the city negotiated the new agreement solely with Flannery.

Flannery said he did not wish to comment on the new agreement or the potential sale of the building until the deal was completed.

Bryant did not name the potential purchasers of the office building, but a letter released by the city as part of the City Council’s informational packet indicates Roebling Investment Company of Hackensack, N.J., is the company looking to purchase the building.

The city released an undated letter from Roebling President Donald Hanson to Mayor Bruce Chuluda outlining the agreement. Hanson also said he wanted to see the city and Flannery reach an agreement quickly.

“We would like to resolve this (matter) as soon as possible, so that we may close title on the property,” wrote Hanson.

Hanson did not return a call seeking comment for this story.

Bryant said the city structured the agreement to ensure that the new owners of the building would be bound by the agreement reached between the city and Flannery. While the new owners would be responsible for the $250,000 payment, Bryant said Flannery would be responsible for the new downtown development.

Bryant said he feels the new agreement is in the best interest of the city. “I think it’s all very positive,” he said. “It allows the city to address a commitment that was made to Tim Flannery under terms and conditions that are beneficial to the city.”

While he said he felt the deal with Flannery was necessary because of a promise made by the former mayor, City Council President Jim Violette said he was not pleased that the city was put in a positon by Esty where it was necessary for the city to make a deal.

“I’m still not happy with how the deal evolved,” he said.

Violette said the city needed to make a deal to honor Esty’s promise even though it was made without the council’s knowledge. He said he would probably support the new agreement because prolonging the dispute could lead to future developers shying away from Westbrook, dramatically affecting future economic development.

“Our dilemma is there is a signed agreement from a city official,” he said. “If we say no to this pledge, people are going to think twice before they come to the city.”

The agreement will not be final until the City Council approves it at two readings. The first reading will be tonight (June 1) at a special City Council meeting at 7 p.m. in room 114 of Westbrook High School. If the council approves the first reading, the agreement would be up for a second and final reading at a council meeting June 6, also at 7 p.m. in room 114 of the high school.

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