GloucesterTimes.com, Gloucester, MA

January 18, 2013

Council backs at I-4, C-2 proposal

By Richard Gaines
Staff Writer

---- — The city’s second draft effort to put to productive use — this time, by lease or sale — the prime I-4, C-2 Rogers Street that’s been vacant for nearly half a century was not well received by the City Council’s Planning and Development Committee, and is going back to the drawing board.

The sale option is new. The first ill-fated request for proposals from a year ago offered only to lease the property, and failed to attract a single bidder.

Harbor Development Director Sarah Garcia said the revised draft request for proposals —of RFP — also encourages bidders by giving developers 180 days between the $10,000 payment for the rights to develop and closing.

Councilors, however, wondered Wednesday night whether a better approach would be do put the property through environmental permitting before offering it.

“Why don’t we (the city) do it (the permitting) out front?” asked Councilor Greg Verga, a real estate broker. “It’s worth more if it’s proved (to be a) clean (site).

“It’s a totally fair question,” Garcia responded. “If given in a permitted state, we’ll get more for it.”

At its first detailed vetting Wednesday night, councilors also questioned the proposed minimum sale price — $650,000 — which is less than half than the $1.5 million the city paid for the parcel, half with city taxpayers’ fund, half with state aid. Despite fronting on Rogers Street between the Building Center yard and the Gloucester House Restaurant, the site is landlocked, cut off from the harbor by a sliver of property that series as a busy lobster landing and pier and is controlled by the city’s Waterways Board.

“We’re really low-balling this thing,” said Councilor Joe Ciolino.

“There is no real estate professional on the (city’s) team that set the RFP price,” said Verga, who is a real estate broker. “We picked price out of the air.”

City Solicitor Suzanne Egan disagreed, noting that the price on the RFP, which is subject to negotiation, is the assessed value.

The draft RFP examined by the Planning and Development Committee broadens the options for developers and would not exclude nonprofits from bidding.

Egan attempted to assuage councilors’ fears that the city could be left selling or leasing to a nonprofit developer who was exempt from real estate taxes.

She also emphasized that the price on the RFP is not binding, and was inserted as a “placeholder” to advance the initiative, adding that the city has the final say on terms of the sale or lease of what has become in the adult lifetime of most residents a monumental white elephant — one mostly popular as a free and informal waterfront parking lot in the summers of 2011 and 2012.

Egan said the administration would follow the strong suggestion of the committee members — Chairman Bruce Tobey, Ciolino and Verga — and get advice from commercial real estate and development experts, while perhaps tweaking the RFP and bringing it back to the council. But she also said she thought the consulting expertise could be brought in after a potential buyer came forward, when hard negotiations were at hand.

Garcia also noted that the city has been advised a decision on Gloucester’s application for a temporary permit to use I-4, C-2 as a paid parking facility could be delayed by as much as six or seven months by the state Department of Environmental Protection.

The mayor said it was useful to “step back” to understand the approach.

“In the private sector (when putting property for sale or lease), you start high and bring the price down (if necessary),” Kirk said. “In the public sector, you start with a minimum bid and go high. Readers need to understand that a year ago, we had no offers.

“We’re pitching the RFP to bid on a complicated parcel, zoning restricted (within the Marine Industrial Zone) and cut off from the waterfront,” she said. “We need to test the market.”

Richard Gaines can be reached at 978-283-7000, x3464, or at rgaines@gloucestertimes.com.