STATE PROPERTIES COMMITTEE
MEETING
TUESDAY, JUNE 24, 2008
The meeting of the State
Properties Committee was called to order at 10:02 a.m. by Chairman Kevin M. Flynn. Other members present were Robert Griffith
representing the Rhode Island Department of Administration; Richard Woolley
representing the Rhode Island Department of Attorney General; Robert W. Kay and
John A. Pagliarini, Jr., Public Members and Xaykham Khamsyvoravong representing
the Rhode Island Office of the General Treasurer, Ex-officio Member. Others in attendance were Anthony Paolantonio from
the Rhode Island House of Representatives; Robert Bromley from the Rhode Island
Senate Fiscal Office; Kartik Naram from the Office of the General Treasurer; John
Glynn, Marc Malkasian, Robert B. Jackson, David Coppotelli, Anthony Barone and
William McCarthy from the Rhode Island Department of Transportation; John
Faltus, Mary E. Kay, Michelle Sheehan, Brandon Ruotolo and Lisa Primiano from
the Rhode Island Department of Environmental Management; John Ryan, Michael D.
Mitchell and Marilyn McConaghy from the Rhode Island Department of
Administration; Frank DiBiase from the Rhode Island Department of Human
Services; William H. Waldron from the
U.S. Fish & Wildlife Service; Charles Breagy from Eident Sports Marketing;
Richard Licht from the law firm of
Tillinghast & Licht, LLP; Robert G. Flanders from the Veterans
Memorial Auditorium Foundation; Bruce A.
Leach from the law firm of DeSimone & Leach; James McCarvill from the Rhode Island Convention
Center Authority; and W. Thomas Humphreys from the law firm of Hinckley, Allen
& Snyder, LLP.
Chairman Flynn noted for the record
that the State Properties Committee did have a quorum present.
A motion was made to approve the
regular minutes of the State Properties Committee held on June 10, 2008, as amended, by Mr. Griffith
and seconded by Mr. Kay.
Passed
Unanimously
A motion was made to approve the
Executive Session minutes of the State Properties Committee held on June 10, 2008, by Mr.
Griffith and seconded by Mr. Woolley.
Passed
Unanimously
The next scheduled meeting
of the State Properties Committee will be held on
Tuesday, July 8, 2008, at 10:00 a.m.
Chairman
Flynn informed everyone present that Items E, F,G & K are being deferred to
a future meeting of the State Properties Committee.
ITEM A – Department of Administration – A request was made
for approval of and signatures on a Purchase and Sale Contract by and between
the Department of Administration and The Conservation Fund for the sale of 72.5
acres of land located behind the Oliver
Stedman Government
Center. Mr. Ryan presented a site plan for review by
the State Properties Committee. Chairman
Flynn reminded the Committee that conceptual approval to transfer the subject
property was granted approximately two months ago. However, Mr. Woolley expressed concerns regarding
the possibility of the need for expansion of the Courthouse in the future. Mr. Ryan explained that both he and Ms.
Primiano consulted with Joseph Baxter, Court Administrator. Mr. Baxter conveyed to them that based upon
his review of the site plans, there was enough remaining acreage to expand the
Courthouse if necessary. Mr. Baxter
indicated that the Judiciary has no plans to expand the Courthouse in the
foreseeable future. Mr. Ryan noted that
a correction has been made to the first page of the Purchase & Sale
Contract relative to the amount of the purchase price. Said correction was made and initialed by
Jerome F. Williams, Director of the Department of Administration, as well as
initialed by The Conservation Fund. Mr.
Ryan asked Ms. Primiano to provide the Committee with a brief history of this
transaction. Ms. Primiano indicated the
U.S. Fish & Wildlife Service approached the Department of Environmental
Management and expressed an interest in the subject property. Ms. Primiano explained that the Department of
Environmental Management has been examining the property for conservation for
many years and fully supports this transaction.
Ms. Primiano indicated that the property will be open and available for
public use and managed consistent with all the other properties, which abut it
along the Narrow River.
Ms. Primiano noted that this transaction places more land in
conservation at no cost to the State of Rhode
Island and is in fact a monetary benefit to the State.
Ms. Primiano explained that The
Conservation Fund is a partner of the Department of Environmental Management and
has worked in conjunction with the U.S. Fish & Wildlife Service nationally
on other projects. The Conservation Fund
volunteered to act as an intermediary relative to this transaction, as it was
unsure whether the U.S. Fish & Wildlife Service would have the funds
available to purchase the subject property.
However, the U.S. Fish & Wildlife Service has secured funding for
the acquisition of the property. Therefore,
Department of Administration will close on the subject property with The
Conservation Fund and immediately thereafter, the U.S. Fish & Wildlife
Service will add the subject property to the Pettaquamscuttt Cove Refuge
properties. Mr. Griffith asked how the
public access will be achieved. Ms.
Primiano indicated that public access will be gained primarily through the
existing parcels along Narrow
River with neighborhood
access through one of the side roads.
Mr. Ryan indicated that access will be gained through residential streets;
not through the State of Rhode Island’s
parcel. Mr. Griffith asked if there will
be access through the Steadman
Government Center. Ms. Primiano indicated there will not be
designated access through the Steadman
Government Center. Mr. Waldron explained that as part of the
public use program, if it is determined that there is a demand or need for
public parking, the U.S. Fish &
Wildlife Service will normally install a public parking facility on its own
land in a environmentally responsible manner so as not to adversely impact the
surrounding neighborhood. Ms. Primiano
indicated that currently there are existing trails that lead into the property
from the surrounding neighborhood. Ms.
Primiano indicated that relative to the installation of a parking facility, the
U.S. Fish & Wildlife Service would need to gauge the reaction of the residents
of the surrounding neighborhood. Ms.
Primiano stated that she believes the Department of Environmental Management
would support such a project. Mr.
Pagliarini inquired whether any consideration was given to the possible trail
linkage to the Steadman
Government Center
so that its parking lots could be utilized.
It is Ms. Primiano’s understanding that the Steadman Government Center presently
has some parking issues; therefore, the Judiciary is concerned that designating
public parking for the Refuge may worsen the situation. Mr. Pagliarini believes that the greatest demand
for Refuge parking would be weekends.
Ms. Primiano agreed; however, she indicated that the Judiciary did not
support the proposal of shared parking. Mr.
Pagliarini asked if the Judiciary has put its position regarding any future expansion
of the Courthouse and available acreage in writing. Mr. Ryan indicated that that the Judiciary’s
provided a written response relative to its position. Mr. Woolley asked Ms. Primiano to provide a
brief summary of how this proposal relates to the Camp Pastore
property. Ms. Primiano explained that when
the U.S. Fish & Wildlife Service came forward with a proposal to purchase
this property it was partly in response to the State of Rhode
Island’s proposal to sell Camp Pastore
on the open market, which alarmed certain personnel at the U.S. Fish &
Wildlife Service. The U.S. Fish &
Wildlife Service proposed an alternative means of providing revenue to the
State of Rhode Island by preserving the
subject property and persuading the State to protect Camp Pastore. Ms. Primiano explained that although the Purchase
& Sale Contract before the Committee today does not stipulate any
conditions relative to the Camp Pastore, the Department is simultaneously working
with the Department of Mental Health, Retardation and Hospitals to transfer Camp Pastore
to the Department of Environmental Management’s custody and control. Said transfer will include conservation
restrictions on the property, which will likely be granted gratis to an
organization such as The Nature Conservancy so that property will return to
public use and ownership. Therefore, as
a result of the subject transaction, not only is this property returned to
public conservation use, but Camp
Pastore as well. Under this proposal, the Department of
Environmental Management will honor any agreements or commitments that
Department of Mental Health, Retardation and Hospitals has with any
organization to utilize the Camp
Pastore property. Ms. Primiano indicated that the Department of
Environmental Management will appear before the Committee regarding the Camp Pastore
property in the near future. Chairman Flynn indicated that he was copied on a
memorandum to that effect from Director Sullivan to Craig Stenning, Acting
Director of the Department of Mental Health, Retardation and Hospitals. A motion to approve was made by Mr. Woolley
and seconded by Mr. Pagliarini.
Passed
Unanimously
ITEM B – Department of Environmental Management – A
request was made for approval of and signatures on a License Agreement by and
between the Department of Environmental Management and Interstate Navigation
Co. for use of a portion of Pier No. 3 located at Fort
Adams State
Park to embark and disembark passengers on its Block Island /Newport Ferry. Ms. Kay explained that this License Agreement
will allow Interstate Navigation Co. to use of a portion of Pier No. 3 located
at Fort Adams
State Park from June 28, 2008, through September 1, 2008, to embark
and disembark passengers on its Block Island
/Newport Ferry. This License Agreement
has been approved by the State Properties Committee for the past twenty (20)
years and is part of Interstate Navigation Co.’s Public Utilities Commission
license. Interstate Navigation Co. also
provides ferry service from Point Judith to Block Island. Ms. Kay indicated that the Newport route has traditionally not seen much
patronage. However, recently the
schedule was modified to allow the passengers more time on Block
Island. The License
Agreement has historically been any annual agreement; however, it has been revised
to provide for a term of three (3) years.
Ms. Kay explained that the Department of Environmental Management has
agreed to a three (3%) percent increase in the license fee over the next two
(2) years as opposed to the fee being increased annually in accordance with
Consumer Price Index. Ms. Kay submitted
the addendum to the Certificate of Insurance evidencing that the State of Rhode Island is named as
an additional insured. Ms. Kay stated
that Interstate Navigation Co. maintains liability insurance coverage in the
amount of $10 million dollars. Chairman
Flynn asked if Ms. Kay had the original presentation memorandum executed by
Director Sullivan. Ms. Kay provided the
executed presentation memorandum to the Committee. A motion to approve was made by Mr. Woolley
and seconded by Mr. Griffith.
Passed
Unanimously
ITEM C –
Department of Environmental Management – A request was made for approval of and
signatures on a License Agreement by and between the Department of
Environmental Management and Eident Sports Marketing on behalf of Ironman 70.3
to allow use of a portion of the parking lot and beach at Roger Wheeler State
Beach for the swimming portion of the Amica Ironman 70.3 triathlon to be held on
Sunday, July 13, 2008. Mr. Faltus indicated
that the term of the License Agreement runs from 8:00 a.m. on Friday, July 11, 2008, until 10:00 a.m. on Sunday, July 13, 2008.
Mr. Faltus explained that in accordance with the terms of the License
Agreement, the Department of Environmental Management is assessing a fee for
the use of the parking lot on Friday and Saturday for the total amount of
$4,830.00. Mr. Faltus noted that the
parking lot must be vacated by 10:00
a.m. on Sunday. The License
Agreement contains a penalty clause, which stipulates that if the parking lot
is not entirely vacated and available for public use and access, an additional
fee of $1,000 per hour will be assessed.
Eident Sports Marketing has provided the Department of Environmental
Management with a Certificate of Insurance and Endorsement from USA Triathlon,
which is the sanctioning body for this triathlon. Mr. Faltus stated that the State of Rhode Island is listed
as an additional insured. Mr. Pagliarini
asked how the fee for parking was calculated, how many spaces will be encumbered,
and will there be sufficient parking spaces available in the event temperatures
are running high on that weekend. Mr.
Faltus indicated that each of those factors was taken into consideration in
establishing the fee. Mr. Faltus explained that the portion of the beach that
the athletes and related individuals will be occupying is the least desirable
section of the beach and receives a minimal amount of use. They will occupy the most eastern end of the
beach, which is the distance furthest from the pavilion. Mr. Faltus indicated that three hundred and
forty-five parking spaces have been allocated for the triathlon. The fee was based upon the weekend resident
rate, which is $7 per parking space. Mr.
Faltus indicated that weather conditions for that weekend are certainly a
concern for everyone involved, but unfortunately completely unpredictable. Mr. Faltus indicated that the Divisions of
Parks and Recreation’s Regional Manager assured him that under normal
circumstances there will be sufficient parking available to accommodate the demand
for average the beach traffic. Chairman
Flynn asked what time of the day this event takes place. Mr. Breagy indicated that the event begins at
6:00 a.m. on July 13, 2008,
and will conclude by 8:30 a.m.
Mr. Pagliarini asked if there is a mechanism in place for the removal of trash
prior to arrival of the public. Mr.
Faltus explained that in accordance with the License Agreement, Eident Sports
Marketing is required to provide dumpsters and is responsible for the clean up
of the beach prior to vacating the property.
Mr. Griffith asked if the public will be notified of the potential
impact on traffic and parking. Mr.
Breagy indicated that an “Impact Notice” will appear in the Providence Journal
on the Friday before the event concerning all sites along the route of the
triathlon. At the conclusion of a
detailed discussion concerning parking and other concerns of the Committee, a motion
to approve was made by Mr. Pagliarini and seconded by Mr. Griffith.
Passed
Unanimously
ITEM D – Department of Human Services – A request was
made for approval of and signatures on a Lease Amendment by and between the
Department of Human Services, Office of Child Support Enforcement and 57
Associates to reduce the total area of leased office space at 77 Dorrance Street
in the City of Providence. A motion to approve was made by Mr. Woolley
and seconded by Mr. Griffith. Mr.
DiBiase, Chief Legal Counsel for the Department of Human Services, indicated
that he is present on behalf of the Associate Director, Sharon Santilli, who
sends her apologies for not being able to attend today’s meeting. Mr. Ryan indicated that Sharon Santilli has
worked with the Division of Capital Projects and Property Management with
regard to a consolidation plan. Over the
last three years, Governor Carcieri and Director Williams have asked the
Division of Capital Projects and Property Management to work on a space
consolidation plan, which has involved moving several State agencies to the Pastore Center.
Mr. Ryan indicated that the State of Rhode Island has achieved great savings in
doing so. Mr. Ryan indicated that in
this case, the State of Rhode Island
will realize substantial savings as the result of reducing space within a
leased premise. Ms. Santilli indicated
that the Office of Child Support Enforcement should remain at the current
location due to its close proximity to the Garrahy Judicial Complex. Mr. Ryan stated that there is no suitable available
space for the office at the Pastore Complex.
Mr. Ryan explained that the Division of Capital Projects and Property
Management was able to negotiate a Lease Amendment under which the State will
realize a significant savings. The
annual savings will be approximately $158,000.
The space utilized will be reduced from 37,925 square feet to 25,812
square feet. Mr. Ryan noted that Mr.
Joseph Paolino, the landlord, has been very accommodating relative to the
State’s desire to reduce the amount of leased office space. Mr. Licht, Mr. Paolino’s attorney and Mr.
Mitchell of the Department of Administration have worked out the terms and
conditions of the Lease Amendment to the satisfaction of Mr. Woolley of the
Department of Attorney General. Chairman
Flynn clarified that this is the final two years of an existing five (5) year
Lease Agreement. Mr. Ryan indicated that
the Lease Agreement is due to expire in 2010.
Chairman Flynn asked if alternative State-owned properties were investigated
as potential sites for the Office of Child Support Enforcement. Mr. Ryan indicated that other State
properties were examined; however, there is no suitable space available. A motion was made to approve by Mr. Woolley
and seconded by Mr. Griffith.
Under discussion, Mr. Pagliarini asked what exactly
is done in this building. Mr. DiBiase
indicated that the building houses the child support agency. Mr. DiBiase indicated that every state has a child
support agency, which is partially federally funded. Mr. DiBiase explained that the agency
actually occupies two (2) buildings conjoined by an atrium; 110 Eddy Street and 77 Dorrance Street. Mr. DiBiase noted that at one time there were
forty-five (45) child support agencies; however, there are now only twenty-five
(25) agencies. There were one hundred
ten (110) FTs and there are now seventy-two (72) as a result of layoffs,
retirements and resignations. Mr.
DiBiase explained that the Office of Child Support Enforcement is dedicated to
the establishment of paternity and the establishment and enforcement of child
support obligation. There are currently
fifty eight thousand (58,000) cases in the child support system. Mr. Woolley noted that the agency generates
income for the State of Rhode Island. Mr. DiBiase explained that the agency
utilizes the Family Court, license revocation, income tax intercepts and
various other tools to enforce the payment of child support obligations. Mr. Pagliarini questioned why the State of
Rhode Island recently sold a building in the Downtown area of Providence
because it was determined to be in excess of the State’s needs and yet 25,000
square feet of office space is being rented for use by a State-agency. Chairman Flynn indicated that the State of Rhode Island certainly
appreciates the landlord’s indulgence by agreeing to a substantial reduction in
space and rent. Mr. Pagliarini asked
what the total amount of the affiliated expenses is relative to this
property. Mr. Ryan explained that he did
not have that information at this time; however, the landlord’s financial
advisors will provide said information in the near future. Mr. Ryan reiterated that there will be a
savings of one third (1/3) across the board.
A motion was made to approve by Mr. Woolley and seconded by Mr.
Griffith.
Passed
Unanimously
A
motion was made to hear Item M out of sequence by Mr. Woolley and seconded by
Mr. Griffith.
Passed
Unanimously
ITEM M –
Department of Administration – Discussion regarding the operation of the
Veterans Memorial Auditorium. The panel
of presenters introduced themselves as follows:
Bruce Leach, General Counsel for the Rhode Island Convention Center
Authority; Jim McCarvill, Executive Director of the Rhode Island Convention
Center Authority; Bob Flanders, President of the Veterans Memorial Auditorium
Foundation; and W. Thomas Humphreys from the law firm of Hinckley, Allen & Snyder, outside counsel
to the Veterans Memorial Auditorium Foundation.
Chairman Flynn noted that Marilyn McConaghy, Chief Legal Counsel for the
Department of Administration is also present.
Mr. McCarvill stated that the Veterans Memorial Auditorium is a great
asset to the State of Rhode Island;
however, it is unfortunately aging and has had difficultly developing a strong
program of live events. The Veterans
Memorial Auditorium has done an extraordinary job with the fine arts community
inclusive of both the Rhode Island Philharmonic and the Festival Ballet
Providence. Mr. McCarvill indicated over
the last ten (10) months, the Rhode Island Convention Center Authority has
consulted with the Veterans Memorial Auditorium Foundation and the Department
of Administration regarding management of the Veterans Memorial
Auditorium. Mr. McCarvill stated that
the general consensus is that the Auditorium would be better served through a
different management structure. Mr.
McCarvill indicated that the Auditorium would be more efficient and certainly
more active if it were folded into the Convention Center and the Dunkin Donuts
Center’s operation. The Department of Administration currently has
a Lease Agreement with the Veterans Memorial Auditorium Foundation. Mr. McCarvill explained that the proposal
before the Committee is to have the Department of Administration vacate said
Lease Agreement and enter into a new lease agreement with the Convention Center
Authority to manage the facility for the coming year. During that year, the Convention Center
Authority would analyze both operations and capital needs with the intention of
returning to the State Properties Committee with a plan that speaks to what
direction the facility should be taken in for the long term. Mr. McCarvill reiterated that this matter has
been discussed at length and the Convention Center Authority feels that the
auditorium’s activity level can be increased by at least fifty (50%) to
seventy-five (75%) percent from its current level of activity. Mr. McCarvill indicated that a Request for
Proposals was prepared and issued. The
Convention Center Authority received an intriguing proposal from the
organization that manages the Providence Performing Arts Center. The Convention Center Authority believes that
a partnering of that organization with SMG, which currently runs the Convention
Center and the Dunkin
Donuts Center,
will be a positive combination to manage the Veterans Memorial Auditorium from
a physical plan standpoint, marketing standpoint and operational
standpoint. Mr. McCarvill stated that at
this time the Convention Center Authority would like to put that management
contract in place; however, in order to accomplish this, the Lease Agreement
between the Department of Administration and the Veterans Memorial Auditorium
Foundation must be vacated and the Department
of Administration must enter into a new lease agreement with the Convention Center Authority Mr. Flanders noted that the parties plan to
return to the State Properties Committee on July 8, 2008, with a proposed lease agreement
between the Department of Administration and the Convention Center
Authority. Mr. Woolley asked if the
Veterans Memorial Auditorium is in competition with the Convention Center and
the Dunkin Donuts Center
as it currently exists. Mr. Flanders
indicated that it is not in competition with either of those venues; however,
the hope is that the Veterans Memorial Auditorium will be able to take
advantage of some of their marketing synergies by having a central booking and
ticketing authority so that different types of events/shows could be
coordinated. Mr. Flanders indicated that
the Veterans Memorial Auditorium has featured cultural arts and educational presentations. The hope is that the Veterans Memorial
Auditorium can expand its current repertoire of event in order to increase the
revenue needed to transform the Auditorium into a financially viable
entity. The intended strategy is to have
a centralized management authority coordinate events between the Convention
Center, PPAC and the Veterans Memorial Auditorium allowing the Veterans
Memorial Auditorium to take advantage of the booking expertise and marketing
savvy of said management authority, which will far exceed the results of the Veterans
Memorial Auditorium’s current efforts.
Mr. Pagliarini asked Mr. Flanders if this plan will effectively put the
Veterans Memorial Auditorium Foundation out of business. Mr. Flanders stated that the current employees
of the Veterans Memorial Auditorium have been advised that they will be
terminated on or before June
30, 2008. The employees have
been provided with information regarding the possibility of continued
employment with the Convention Center; however, that decision is solely at the
discretion of the Convention Center and its current management. As far as the Foundation itself, there have
been discussions regarding continuing the entity’s existence in some sort of
advisory capacity or fund raising capacity.
Mr. Flanders explained that if this proposal goes forward as
contemplated, the Lease Agreement between the Department of Administration and
the Veterans Memorial Auditorium Foundation will be terminated and a new lease
agreement will be entered into between the Department of Administration and the
Convention Center Authority; however, the Veterans Memorial Auditorium
Foundation will continue to subsist until and/or unless it chooses not to. Mr. Flanders indicated that unless an
agreement is reached wherein the Veterans Memorial Auditorium Foundation
maintains some advisory or fund raising function, the future of the Foundation
will be tentative at best, as the Foundation’s sole function has been to manage
and operate the Auditorium and provide services in that regard. Mr. Flanders expressed concern regarding the
upkeep of the facility in the event a resolution is not reached prior to the
termination of the current employees on June 30, 2008. Mr.
Flanders stated that although there are no performances scheduled during that
period, the facility must be tended to and maintained until such time as appropriate
arrangements are made between the State of Rhode Island and the Convention Center
Authority concerning building maintenance.
Chairman Flynn stated that the Department of Administration and the
Convention Center are actively engaged in discussion to ensure that the
transfer of the Auditorium’s care continues seamlessly. Mr. Flanders also expressed concern that any
commitments previously made by the Veterans Memorial Auditorium Foundation with
various organizations are honored especially those with the Rhode Island
Philharmonic and the Festival Ballet Providence. Chairman Flynn assured Mr. Flanders that any
and all commitments will be honored inclusive of any financial obligations. Mr. Flanders explained that the Veterans
Memorial Auditorium Foundation occupies what is known as Condominium Unit 2,
which includes not only the Auditorium but also a six-story office building,
which under the current Lease Agreement requires the State of Rhode Island to convey title to that
facility to the Veterans Memorial Auditorium Foundation. Mr. Flanders explained that the conveyance of
the title was originally planned for June 30, 2008; however, it was subject to
the bonds being repaid and they will not be repaid for several years. Therefore, the Veterans Memorial Auditorium
Foundation will be giving up the conveyance of said title as part of this new
arrangement. Mr. Pagliarini asked Mr.
Flanders to explain why the State of Rhode
Island is obligated to include the Veterans Memorial
Auditorium Foundation in any future transaction involving the Veterans Memorial
Auditorium property. Mr. Flanders
explained that the Veterans Memorial Auditorium Foundation has a legal and
contractual right concerning the property.
Mr. Pagliarini explained that he is trying to understand the
circumstances as he was neither provided with any documentation nor been
involved in any discussions relative to this matter. Mr. Flanders explained that the Veterans
Memorial Auditorium Foundation is a tenant and the State of Rhode Island is legally obliged to lease the
premises to the Veterans Memorial Auditorium Foundation and legally obliged to
convey the property, subject to the terms and conditions of the Lease
Agreement. Mr. Flanders indicated that
the Foundation is a party to a legally binding agreement and said agreement
must be modified in order for a new proposal is to move forward. The Veterans Memorial Auditorium Foundation’s
Board of Directors will have to meet and approve said proposal, which will
essentially terminate that Foundations legal right to the facility. Chairman Flynn asked if the State Properties
Committee had any further questions at this time. Chairman Flynn thanked the panel for
presenting this matter for discussion on such short notice. Mr. McCarvill
explained that the parties will be seeking to terminate the current lease by
and between the Department of Administration and the Veterans Memorial
Auditorium Foundation while simultaneously permitting the Department of
Administration to enter into a new lease agreement with the Rhode Island Convention
Center Authority. Mr. Pagliarini asked
if the premises will have to be offered publicly, via a Request for Proposals
once the current Lease Agreement is terminated in order to determine if the Rhode
Island Convention Center Authority is the best use for the subject
property. Chairman Flynn indicated that
he would investigate Mr. Pagliarini’s question and advise the State Properties
Committee accordingly. Mr. McCarvill
thanked and commended Mr. Flanders and the Veterans Memorial Auditorium
Foundation for their extraordinary cooperation as this proposal has not been
pleasurable for them. However, he
believes that as an advisory committee, the Foundation will serve as a kind of
conscience for the future management of the Veterans Memorial Auditorium. Mr. McCarvill stated that as Veterans Memorial
Auditorium has always been conceived as a home for the fine arts and committed
to educational excellence, any future management of the facility should stay
true to that mission. The parties
anticipate that they could return as soon as July 8, 2008, with some sort of final
documents.
ITEM E – Board of
Governors for Higher Education – A request was made for
approval of and signatures on a
Site License Agreement for a Transmission and Receiving Antenna Serving the
Rhode Island Statewide Communications Network.
This item is deferred to the July 8, 2008, meeting of the
State Properties Committee.
ITEM
F –Board of Governors for Higher Education – A request was made for approval of
and signatures on an Agreement by and between the Rhode Island Emergency
Management Agency for the Operation of Emergency Shelters at the University of Rhode Island. This
item is deferred to the July
8, 2008, meeting of the State Properties Committee.
ITEM
G – Board of Governors for Higher Education – A request was made for approval
of and signatures on an Agreement by and between the Rhode Island Emergency Management
Agency for the Operation of Emergency Shelters at the Community College of Rhode
Island. This item is deferred to the July 8, 2008, meeting of the
State Properties Committee.
The State Properties Committee
agreed to defer Item H until the end of the meeting.
ITEM
I – Department of Transportation – A request was made for approval of a renewal
of a License Agreement by and between the Department of Transportation and Blue
Street Management for use of approximately 1,640 square feet of property located
at 614 George Washington Highway
in the Town of Lincoln
for purposes of beautification and a small portion of which is used as
supplemental parking. Mr. Coppotelli
explained that the subject License Agreement is for a term of five (5) years
and is revocable at will. The original
license fee was $100.00 and was increased to $115.00 in March of 2008. Mr. Coppotelli indicated that the license fee
will be re-evaluated at the end of the third term of the License
Agreement. Mr. Pagliarini asked why the
Department of Transportation chose to utilize a license agreement rather than a
non-exclusive surface agreement for parking.
Mr. Coppotelli indicated that for as long as he has been appearing
before the State Properties Committee with parking requests, the Department has
always utilized a License Agreement for this purpose. A motion to approve was made by Mr.
Pagliarini and seconded by Mr. Woolley.
Passed
Unanimously
ITEM
J – Department of Transportation – A request was made for approval of and signatures
on a Quit Claim Deed by and between the Department of Transportation and Glen
Hills, LLC conveying 28,283 square feet of property located in the Glenn Hills
section the City of Cranston designated as Plat 11-4, portion of Parcels 43,
45, 54 & 60; abandoned portion of Stone Hill Drive. Mr. Jackson illustrated the exact location of
the subject property using a site map.
Mr. Jackson indicated that the Department of Transportation issued a
Request for Proposals in August of 2007.
Subsequently, the State Properties Committee approved and executed the
Purchase and Sale Agreement on or about December 21, 2007. Mr. Jackson indicated the purchase price for
the subject property is $171,500, which exceeds the appraised value of the
property. A motion to approve was made
by Mr. Pagliarini and seconded by Mr. Woolley.
Passed
Unanimously
ITEM
K – Department of Transportation – A request was made for approval of and
signatures on a Letter of Authorization to allow the Rhode Island Economic
Development Corporation’s subcontractor, Woodward & Curran, Inc, access
onto property located at 680 George Washington Highway in the Town of Lincoln
to install two (2) monitoring wells. This item is deferred to a future meeting of
the State Properties Committee.
ITEM
L – Department of Transportation – A request was made for conceptual approval to
convey approximately 9,300 square feet of State-owned land located on Pawtucket Avenue at
the Seekonk River Crossing in the City of East
Providence, which abuts the Wampanoag Mall. Mr. Jackson illustrated the exact location of
the subject property and described the surrounding area using a site map. Mr. Jackson explained that the applicant
wishes to utilize the subject property for additional access to the loading
docks at the Wampanoag Mall. Mr. Jackson
indicated that he spoke at length with Jeanne Boyle of the City of East Providence and stated that the City of East Providence supports
this transaction. Mr. Griffith asked if
the subject property is part of the land acquired by the State of Rhode Island to extend the roadway from Henderson Bridge
to ultimately connect to Route 44. Mr.
Jackson stated that Mr. Griffith’s statement is correct. Mr. Griffith asked if the State of Rhode Island still owns
the remaining portion of the acquired property.
Mr. Jackson indicated the State of Rhode Island does own the remaining
property. Mr. Griffith asked why the
Department of Transportation has not investigated a proposal to deem the
remaining property surplus and dispose of it in its entirety rather than
selling the property in a piece meal fashion as the State has no plans to construct
said connector. Mr. Jackson indicated
that the Department of Transportation has investigated such a proposal; however,
most of the property contains wetlands.
Mr. Pagliarini indicated that as the Department does not have an overall
game plan relative to the remaining property, he believes it would be prudent
to grant a non-exclusive surface easement to the applicant while retaining the
fee to the subject property. Mr. Jackson
indicated that there is a limit to the length of time the Department is able to
grant an easement. Mr. Jackson indicated
that the Department of Transportation proposed entering into a license agreement
for use of the property; however, that proposal was rejected by the applicant. Mr. Pagliarini stated that he believes it is
more appropriate to enter into a license agreement rather than selling the
subject parcel of land prior to having a plan relative to the remaining
property. A motion was made to deny,
without prejudice, the Department of Transportation’s request for conceptual
approval to convey the subject property to Emmes Asset Management Company by
Mr. Pagliarini and seconded by Mr. Kay.
Passed
Unanimously
Under
discussion, Chairman Flynn informed the Committee that he has been working with
the Department of Transportation; not so much with regard to the subject property,
but relative to the, so called, E’Zee Car Rental & Leasing Company property. Chairman Flynn indicated that the parcel of
land that the Department of Transportation is proposing to convey to E’Zee Car
Rental & Leasing Company will allow the State of Rhode Island to retain enough property for
future State corridor use. Chairman
Flynn indicated that the subject transaction is in keeping with that plan. Mr. Pagliarini reiterated that if the
Department of Transportation returns to the State Properties Committee with a
long range plan and especially if Statewide Planning is involved with said
plan, he may very well support a proposal to sell individual parcels of
land. Chairman Flynn indicated that a
sale of the entire parcel of land to E’Zee Car Rental was proposed; however,
neither the Department of Transportation nor the City of East Providence supports said proposal, as
both entities wish to keep the right of way intact.
The
State Properties Committee agreed to defer Item H until the close of the
Executive Session.
The Committee moves to go into Executive Session, pursuant
to Rhode Island General Law 42-46-5(a)(5) for the specific purpose of
discussion or consideration related to the acquisition or lease of real
property for public purpose, or of the disposition of publicly held property
wherein advanced public information would be detrimental to the interest of the
public.
A motion was made
to enter into Executive Session by Mr. Griffith and seconded by Mr. Kay. A roll call vote was taken and the votes were
as follows: Mr. Griffith voted “Aye”,
Mr. Pagliarini voted “Aye”, Mr. Woolley voted “Aye” Mr. Kay voted “Aye” and
Chairman Flynn voted “Aye”.
ITEM
E1 – Department of Transportation – A discussion
concerning ongoing negotiations regarding a License Agreement by and between
the Department of Transportation and Grasso’s Service Center, Inc. for use of
approximately 5,000 square feet of property located at 116 Hartford Avenue in the City of Providence. No action was required by the State
Properties Committee relative to Item E1.
The State Properties Committee
closed the Executive Session and returned to
open session at 11:15
a.m.
ITEM H –
Department of Transportation – A request was made for approval of and
signatures on a Perpetual Non-Exclusive Surface Easement by and between the
Department of Transportation and Atlantic-Plain Realty, LLC for use of property
abutting 90 Plain Street
in the City of Providence
for surface parking in conjunction with its development of the abutting
improved commercial area. Chairman Flynn
explained that the subject property is controlled by the Department of
Transportation and located adjacent to the 90 Plain Street, which the State of Rhode Island is conveying
to Atlantic- Plain Realty, LLC for a purchase price of $3.6 million
dollars. It is Chairman Flynn’s understanding
that it is the intention of the Department of Transportation to allow the buyer
of the 90 Plain Street
property to utilize a certain portion of State highway land for additional
parking. Mr. Ryan indicated that
Chairman Flynn’s statement is correct.
Mr. Ryan presented an aerial photograph of the subject property and
illustrated that exact location of the subject property. Mr. Ryan indicated that the State of Rhode Island sold the 90 Plain Street
property via a public auction. Since
that time, the parties have executed a Purchase and Sale Contract and during the
buyer’s completion of due diligence a zoning issue with City of Providence came to light. Although Atlantic-Plain Realty, LLC’s tenant
does not need the amount of parking spaces required by the Providence Zoning
Code, they have requested that the assistance of the Department of
Transportation in order to close on the 90 Plain Street property. Mr. Ryan indicated that the State of Rhode Island is
extremely anxious to close on the property prior to the end of the fiscal
year. Mr. Ryan explained that the
parties have enlisted that help of William McCarthy and his staff at the
Department of Transportation. Mr. Ryan indicated
that Mr. McCarthy has expended a tremendous amount of time and effort in order
to facilitate and effectuate the Perpetual Non-Exclusive Surface Easement
before the Committee today. Mr. Ryan
indicated that he has been assured that the documents have been executed and
were forwarded to the Department of Transportation via overnight mail; however,
said documents have not yet been received by the Department of
Transportation. Mr. Ryan could offer no
reason for the delay, but indicated that the absence of the documents certainly
presents a problem, as the closing of the 90 Plain Street property depends upon receipt
of the executed Non-Exclusive Surface Easement Agreements. It was Mr. Woolley’s understanding the State
Properties Committee had previously signed off on the deed. Mr. Ryan explained that State Properties
Committee did in fact approve the Quit Claim Deed; however, the closing has not
yet been scheduled or accomplished. Mr. Woolley inquired as to whether this
enhancement will increase the value of the 90 Plain Street property. Mr. Ryan indicated that Atlantic-Plain Realty,
LLC will pay compensation to the Department of Transportation for the Perpetual
Non-Exclusive Surface Easement over this property as said property is
controlled by the Department of Transportation.
However, although Atlantic-Plain Realty, LLC is paying compensation for
both properties, the compensation paid to the Department of Transportation will
be allocated to the Department of Transportation’s revolving fund to be utilized
for matching funds of Federal Highway Association. Mr. Woolley inquired as to whether the
initial appraisal of the property included the condition of the Perpetual
Non-Exclusive Surface Easement and, if not, would said condition have increased
the value and purchase price of the 90
Plain Street property. Mr. Ryan explained that Atlantic-Plain
Realty, LLC. is paying $25 per square foot for the additional 6,500 square feet
of property for an annual total of $146,000.
Chairman Flynn, Mr. Ryan and Mr. McCarthy all indicated that it is
doubtful that the Perpetual Non-Exclusive Surface Easement would have increased
the appraised value of the 90
Plain Street property. Mr. Pagliarini asked whether the Request for
Proposals required the potential bidders to conduct due diligence prior to submitting
a bid. Mr. Ryan stated that the property
was sold as is. However, the practical
problem is that the State has entered into a Purchase and Sale Contract and the
State needs to close on the subject property for budgetary purposes. Mr. Pagliarini stated that Atlantic-Plain
Realty, LLC has entered into a legally binding Purchase and Sale Contract with
the State of Rhode Island
for the conveyance of the 90 Plain
Street property; therefore, he fails to understand
how this adjacent parcel of land affects that transaction. Mr. Pagliarini
agreed that the Perpetual Non-Exclusive Surface Easement would certainly be
desirable, but he questioned how it affects the terms and condition of the
Purchase and Sale Contract. Mr. Ryan
noted that legally the State of Rhode
Island could walk away from the deal. Mr. Pagliarini asked if Atlantic-Plain
Realty, LLC can legally walk away from the deal. Mr. Pagliarini stated that as Atlantic-Plain
Realty, LLC successfully bid on the 90
Plain Street property, as is, and the Request for
Proposals did not contain any provision concerning the adjacent property then
Atlantic-Plain Realty, LLC. owes the State of Rhode Island $3.6 million dollars whether or
not the Department of Transportation agrees to grant the Perpetual
Non-Exclusive Surface Easement over the adjacent property. Mr. Woolley noted that the State of Rhode Island could move
for specific performance. Mr. Ryan agreed
that the State could move for specific performance and reiterated that the
State of Rhode Island
could walk away from the deal and retain Atlantic-Plain Realty, LLC’s deposit. Mr. Pagliarini argued that walking away from
the deal and keeping the deposit is not the issue; the issue is that Atlantic-Plain
Realty, LLC successfully bid $3.6 million dollars on the 90 Plain Street, as is,
and he questioned whether the State of Rhode Island is under duress to provide
the additional necessary parking to ensure that Atlantic-Plain Realty goes
through with the purchase of 90 Plain Street property, which it is already
legally obligated to do. Mr. Ryan explained that Atlantic-Plain Realty, LLC’s
position is that it will not be able to obtain the necessary building permit to
complete vital renovations unless it complies with the zoning requirements and
furthermore, its lender takes issue with any noncompliance relative to zoning
requirements. Mr. Pagliarini asked
whether the Purchase and Sale Contract contained a provision that required
Atlantic-Plain Realty, LLC to obtain a building permit for a specific use
before purchasing the property as is.
Mr. Ryan stated that the Purchase and Sale Contract contains no such
provision and the property was purchased as is.
Mr. Pagliarini asked if in accordance with the Purchase and Sale
Contract, Atlantic-Plain Realty, LLC owes the State of Rhode Island $3.6 million dollars regardless
of whether the State grants the Perpetual Non-Exclusive Surface Easement. Mr.
Ryan assumes that Atlantic-Plain Realty is obligated to pay the purchase price. Mr. Pagliarini asked Mr. Ryan to further
clarify that the subject parcel of land was not contemplated as part of the
Request for Proposals, was not a condition of the Purchase and Sale Agreement or
in any way referenced relative to the conveyance of the subject property. Mr. Ryan indicated that Mr. Pagliarini’s
statement is correct. Mr. Pagliarini asked
if the State of Rhode Island
has obtained federal permission to perform construction on a federally funded,
State right-of-way. Both Mr. McCarthy
and Mr. Ryan indicated that permission from the Federal Highway Association has
been secured. Mr. McCarthy indicated
that the Department of Transportation has received verbal permission and
written permission is part of the package the Department is awaiting via
overnight mail. Chairman Flynn asked
what documents the Department of Transportation is still awaiting. Mr. McCarthy indicated that the overnight
package will contain a letter confirming permission of the relocation of the
freeway line from Michael Butler, the Federal Highway Administration
Right-of-Way Agent, and the survey. Mr. Pagliarini
questioned why the Department of Transportation is opting to grant a Perpetual
Non-Exclusive Surface Easement rather than entering into a license
agreement. Mr. Pagliarini questioned why
the Department is diverting from its normal procedure of entering into a
license agreement to grant an easement for purposes of parking. Mr. McCarthy explained that a license
agreement is revocable at will and such a provision may not be acceptable to
the lender. Chairman Flynn reminded the
Committee that the State has precious few days to accomplish a closing on the 90 Plain Street
property prior to the close of the fiscal year.
Mr. Woolley stated that the distinction between a license agreement and
an easement is simply that the closing of the 90 Plain Street property will
provide approximately $147,000 to be allocated back to the Department and
facilitate the conclusion of the sale of the 90 Plain Street property, which
will generate $3.6 million dollars in revenue to the State of Rhode
Island. Mr. Woolley indicated that given
the practical financial issues before the State Properties Committee, the
request could be approved subject to the outstanding documents being received
as opposed to scheduling a special meeting to accomplish the very same
objective. Mr. Pagliarini expressed his
belief that the State Properties Committee and the State of Rhode Island are being pressured into disregarding
the normal operating procedure because a license agreement is not acceptable to
the lender. Mr. Pagliarini suggested
that the “revocable at will” language be removed from the license agreement
rather than setting a potentially harmful precedent by utilizing an entirely
different mechanism to placate a particular lending institution. Mr. Ryan explained that the Department of
Transportation refuses to remove the “revocable at will” language from its
license agreements as said condition safeguards it from potential conflict in
the event the licensed property should becomes essential to the future needs of
the Department. Mr. Woolley asked what
documents the Department of Transportation is awaiting receipt of at this
time. Mr. Ryan indicated that the
Department is awaiting the executed Perpetual Non-Exclusive Surface Easement
Agreement, the survey and the letter of approval from the Federal Highway
Administration. Mr. Woolley indicated
that he is hesitant to make a motion to approve in the absence of so many
essential documents. Chairman Flynn
suggested that a special meeting of the State Properties Committee could be scheduled
on either Friday, June 27,
2008, or Monday, June 30. 2008.
The members of the State Properties Committee indicated that they were
unavailable on one or both of the dates suggested by the Chairman. Mr. Woolley asked when the closing would be accomplished. Mr. Ryan indicated that the closing on the
Perpetual Non-Exclusive Surface Easement will be scheduled forthwith subject to
the Committee’s approval and the closing on the 90 Plain
Street property will be scheduled
immediately thereafter. A motion was
made to approve subject to the executed Perpetual Non-Exclusive Surface
Easement Agreement being received from Atlantic-Plain Realty, LLC, the letter
of approval being received from the Federal Highway Administration as well as Mr.
Woolley’s review thereof, and receipt of the survey by Mr. Woolley and seconded
by Mr. Kay. The motion passed four (4) votes “Aye” to one
(1) vote “Nay”
Four
(4) Votes “Aye”
Mr.
Woolley
Mr.
Kay
Mr.
Griffith
Chairman
Flynn
One
(1) vote “Nay”
Mr.
Pagliarini
There
being no further business to come before the State Properties Committee, the
meeting was adjourned at 11:29 a.m. A motion was made to adjourn by Mr. Griffith
and seconded by Mr. Woolley.
Passed Unanimously
________________________________
Holly H. Rhodes, Executive
Secretary