Impasse or Charade?
Charade (noun): a situation in which people pretend that something is true when it is clearly not, an absurd pretense intended to create a pleasant or respectable appearance.
After many months of suspense, following the March 20th City Council meeting, the city’s development partner, Michael Kane, of Sobow Square, LLC, broke his public silence and declared to the Portsmouth Herald: “We are absolutely not at an impasse. There is a middle ground to resolve our differences if the city truly wants to advance the project as required by our settlement agreement.”
He went on to say, “it is becoming more apparent that the city’s unilateral declaration of an impasse is just a pretext to try and avoid its legal commitments.”
This comes on the heels of the City of Portsmouth’s hastily called March 11 meeting. With just 24 hours’ notice, the group of gathered citizens heard the startling declaration that: “we are at an impasse with our development partner and continue to communicate with him to move beyond the impasse”.
Meanwhile, City Manager, Karen Conard, selected by this Council to negotiate with Kane, continued to stand by her statements at Monday’s City Council meeting. It also was revealed that the developer had threatened a lawsuit early this year when the city asked for an extension by City Attorney Susan Morrell.
Recall that the General Services Agency (GSA) has set a March 31 deadline for the city to submit a development application to federal officials.
The settlement agreement which the city and this Council approved and signed, left no exit clause or off-ramp for the city. The most onerous part of the agreement was the 7.4% unlevered return guaranteed to the developer.
This guaranteed return would potentially put the Portsmouth taxpayer on the hook for millions of dollars yearly. And keep in mind that this would be on top of any initial contribution the city would make to fund the project.
Clearly no one on this Council, now referred to as the “Boondoggle Nine,” understood the ramifications of the agreement with this development partner.
Its very clear now that the city and this council signed a one-sided settlement agreement with this developer, already paying him $2 million.
Now the city is at a crossroads with the GSA agreement running out in a few weeks. They could be left with the GSA selling the building to the highest bidder and most likely a new lawsuit from our development partner.
Or, was this all just all a charade – a way for Michael Kane to bring back his “old project” as a last-ditch effort negotiation ploy?
We will all know in a few weeks. Remember this same developer decided to restart a lawsuit two weeks before the 2021 City council election in Portsmouth.
Stay tuned!!
