Overlook negotiations coming to a close

Thu, 10/07/2021 - 2:15pm

Final negotiations can now take place for the purchase of a portion of Steve Filippi’s Overlook property. The cost of the property is to be shared by the Block Island Land Trust, the Town of New Shoreham, The Nature Conservancy, and the Block Island Conservancy. The property has been touted as “the last” property available on the shore of the Great Salt Pond in the New Harbor Commercial District, and adjacent to waters classified by the R.I. Coastal Resources Management Council
as suitable for heavy marine activity, including docks and marinas.
When voters approved their share of the deal, $4.5 million, at Financial Town Meeting in May, it was with the understanding that there were conditions attached. One was that the lot, which houses a hotel that is mainly used for Ballard’s employee housing, would be successfully subdivided into two lots. (Filippi is retaining the hotel and essentially selling off the surrounding land.) The other condition was that the town have an appraisal performed that would be “acceptable to the
Town Council.”

The zoning decision to approve the subdivision was made on September 28, opening up a 30-day window to make final negotiations to purchase the property or to walk away altogether, based on the appraisal.

The town’s appraisal was received a few weeks ago and came in more than $2 million below the $10.5 selling price, at $8,250,000. The Land Trust had two appraisals done, but thus far has refused to make them public. At the joint meeting between the Town Council and Land Trust on Tuesday, Oct. 5, Land Trust Chair Barbara MacMullan said their two appraisals weren’t too far apart. “We had kind of settled” on $8.5 million.
“Both appraisals reinforced the other?” asked Second Warden Sven Risom.
“It’s good to say they provided us with a consensus number,” answered MacMullan.
The meeting was expected to go into closed session for the discussion, but the Town Council decided to hold it in open session. This put the Land Trust in somewhat of an awkward position since it is their practice to not discuss property acquisitions in open session until after they have been completed, and they are the main negotiators of the Overlook acquisition.

The five members of the Town Council were divided when the acquisition came up last spring, and remain divided along the same lines. First Warden Andre Boudreau and Councilor Martha Ball were against the project, citing the unknown financial impact of the broadband project, the higher-than-expected price of the power company acquisition, and the need for more affordable housing, among other things. Many of the opponents cite the inability of the town to meet the maintenance needs of existing town facilities. Robbie Gilpin told the council: “You don’t build a swimming pool when the roof is leaking,” and the library has found that the cost of its window replacement project was far higher than budgeted.

Some assumed that if the purchase were to be made for $8.5 million, the savings would accrue to the town, reducing its share from $4.5 million to $2.5 million. Others interpreted it differently – that all the organizations would share a proportional amount of the savings.
That was really the sticking point for the meeting that lasted close to two hours. The Land Trust is in need of a commitment so they know what they can and can’t offer in their negotiations with Filippi.

The Land Trust though had sent a letter to the town that as Councilor Keith Stover said: “Capped our risk,” at a proportional amount of the appraised value.

With the assumption that the value of the property is $8.5 million, that proportional cap would be $3.6 million, or the most the town would kick in for the purchase. Not to honor the proportional burden “smacks of bad faith,” said Stover.

Stover made the motion to make the commitment of up to $3.6 million official and it passed with a council vote of three to two with Ball and Boudreau voting “nay.”
The taxpayer’s share is therefore capped at $3.6 million, whatever the final purchase price is, and the town still has the right to walk away if the council is not satisfied with the deal. Finance Director Amy Land told The Block Island Times that it would most likely be financed with 20-year bonds, with an estimated annual debt service of $230,000 per year. That equates to an annual tax bill increase of $110 per million dollars of a property’s assessed value.