State office shoots down land and water claims

ROCKPORT — A bid by a New York state man to resurrect the defunct Rockport Granite Co. and seize control of land in Halibut Point State Park, other parcels in Rockport, and Gloucester's Klondike Reservoir was shot down yesterday by the head of the Secretary of State's Corporate Division in Boston.

According to Secretary of State records, Steven Zarnoch of East Hartford, N.Y., had "revived" the Rockport Granite Co., on Dec. 28, 2007 — some 74 years after it closed. In the process, had named himself the company's president, treasurer, secretary and director, and had sought to recoup the company's land, which had included bodies of water and quarries that are now key to Rockport's water supply as well.

But after reviewing evidence provided by Rockport, Gloucester and the state's Department of Conservation and Recreation — and after an interview with Zarnoch — Laurie Flynn, Secretary of State Corporate Division director and chief legal counsel, found yesterday that Zarnoch had no legal authority to resurrect the company.

"The statute requires you have to be an 'interested party' and he was not an interested party," Flynn told the Times. "(Zarnoch) was not a shareholder, officer or part of the corporation prior to filing for the revival (last year)."

Flynn said that Zarnoch could not resurrect an old company without having been involved with the corporation prior to its closing, and he had now shown that he had. Zarnoch has 30 days to appeal the decision, Flynn added.

Flynn also indicated her decision means the company would be taken off the Secretary of State's registry of corporations. Attempts to reach Zarnoch through the phone number listed for the company were unsuccessful both yesterday and Wednesday.

The Department of Conservation and Recreation, which administers Halibut Point State Park, was represented by its legal counsel at the hearing while Rockport was represented by Town Administrator Michael Racicot and the town's counsel, the Boston-based law firm of Kopelman & Paige.

The hearing also included Gloucester city solicitor, Suzanne Egan, and all were adamant that Zarnoch had no claim to any now-publicly owned land.

"The state bought that park (52 acres) in 1981 from private individuals," DCR spokeswoman Wendy Fox told the Times. "(Zarnoch) had corresponded with the DCR claiming ownership of the park, the DCR responded it disagreed and it never went further."

Racicot said Zarnoch revived the company late last year thinking that, once he did, all of the company's former assets would be his — including Babson Farm quarry in Halibut Point; Flat Ledge quarry and Carlson's quarry, home to Rockport's second largest water supply holding 85 million gallons of water.

"We disputed it and pitched our case that we owned the property," Racicot said yesterday. "From our standpoint, we're relieved that it's over. I guess we'll have to look to see if he takes any further steps. He has no legal standing to request any money from Rockport, Gloucester or Halibut Point."

Racicot traced the titles of the disputed Rockport parcels back to the early 1930s, when the Rockport Granite Co. reportedly lost them to foreclosure. According to Egan, Gloucester's Board of Water Commissioners acquired Klondike quarry by eminent domain in 1953.

Egan said Zarnoch asserted Rockport Granite Co. ownership of Klondike quarry, which was converted to a seasonal reservoir earlier this decade. She said he was proposing to either sell it back or lease it to Gloucester, and sent the city a bill for $2.4 million along with a notice of ownership, indicating that he corporation had been "revived," as Secretary of State papers confirmed. But that does not give the company corporation or legal standing, officials said.

"The last thing we got was a notice to vacate," Egan said yesterday, "or he would take away our equipment and close the road."

Egan said that, on Aug. 1, Gloucester, Rockport and Halibut Point received a 60-day notice to vacate Rockport Granite Co. lands — with the deadline expiring Oct. 1. The notice indicated if the communities and state failed to cooperate, the matter would go to court.

Zarnoch sent a notice to the Times on Oct. 1 requiring that the public refrain from entering "our" water and quarries. Egan said Detective Steven Mizzoni and Lt. Michael Lane investigated the claims and quickly found that the city had the proper deeds and titles for Gloucester's land. Lane and Mizzoni joined Egan at yesterday's hearing to submit the paperwork as evidence.

Zarnoch was spotted at Halibut Point State Park this summer attempting to take water samples but was ordered to cease and desist, a park ranger said. Rockport police were prepared to order Zarnoch out of the park if he returned there yesterday.

Meanwhile, according to a June 15 Rockport Police report, a man approached a resident of 83 Granite St., claiming he had resurrected the Rockport Granite Co. and therefore owned the person's property. He was quoted as saying he wanted to convert the house into his "corporate headquarters." Police ran the man's plate number to determine his identity — records showed the vehicle belonged to a Steven Zarnoch.

Selectman Chairman Sarah Wilkinson said she breathed a big sigh of relief yesterday after hearing the Secretary of State decision, and praised Racicot's diligence over the past several months researching the claims.

"The town administrator did an excellent job," Wilkinson said. "He put up a red flag from the first letter the town received from this person and followed it through to today.

"It was a group effort," she said, "but thanks to him especially; he took the right first step with it, getting us the outcome today."

Selectmen Charles Clark was also happy the matter was finally resolved.

"I am very pleased at the successful outcome," Clark said. "Several weeks ago, the Board of Selectmen made a decision to challenge these bogus claims. We asked the town administrator to work with town counsel to challenge the corporate revival ... Today's results should put an end to this mischief."

Selectman Armand Aparo said the town built a solid defense in an effort to protect Rockport's best interest.

"Many people are concerned about the length of our executive sessions, but the reality is priority items receive priority treatment and litigation is at the top of that ladder," Aparo said.

"We take whatever steps are necessary to get it right the first time. When we push back against litigation, we use overwhelming force."

Jonathan L'Ecuyer can be reached at jlecuyer@gloucestertimes.com.

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Corporations chief nixes Rockport Granite revival

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