SALISBURY — Some town officials are worried a handful of beach property "hold-outs" are not only stalling the Thompson Design Group's planned redevelopment of Salisbury Beach Center, but could ultimately kill it, causing the Thompson Group to drop the project altogether.
Town Manager Neil Harrington gave selectmen an update on the beach project at their meeting Monday night, saying the Thompson Group has successfully negotiated development agreements with about 90 percent of the property owners in the Beach Center's redevelopment area. But, about 10 percent of the property owners haven't signed with developers after two years of negotiations, and the "handful of hold-outs" threaten the project, Harrington said.
"If those property owners don't sign, they could kill the project," Harrington said. "Then, who knows what the repercussions will be for the people who prevent the project from happening."
Harrington said the Thompson's Group's planned redevelopment of the Beach Center would move along quickly once all the 70-plus property owners involved sign development options with the Cambridge-based development firm.
"Once (the Thompson Group) has site control, then they can get the financing and then move through the permitting process," Harrington said. "But if they don't (get site control), they could pull out."
In 2007, the Thompson Group — known for landmark redevelopments like Boston's Quincy Market and Ghirardelli Square in San Francisco — brought forward their intention to redevelop the Beach Center through a single vision that "would bring back the grandeur of Salisbury Beach."
Since then, many of the 73 property owners involved have signed on with the group, and the Thompson Group also purchased a $1 million Broadway property at auction.
Property owners who haven't signed include a few beach condominium owners, the Salisbury Beach Associates, and developers Robb Osinski and Jay Gallagher, who have control over the former Sidewalk Cafe at 25 Ocean Front South through a purchase and sale agreement with the current owner, Mark Finneral.
The former Sidewalk Cafe is considered a pivotal part of the redevelopment, and some see Osinski and Gallagher getting on board as critical.
Osinski vehemently objects to being considered a "holdout," saying he and Gallagher want to work with the Thompson Group.
"We are very interested in coming to an agreement with the Thompson Group," Osinski said yesterday. "We have had many lengthy discussions with them. Saying we're holdouts is a reckless comment and doesn't provide a forum for us to conclude our transaction. And why is it we're seen as holdouts? Why isn't the Thompson Group being seen as holdouts?"
Norman Beaulieu, of the Thompson Group real estate entity RE Commerce involved in negotiating the development agreements at the beach, agreed with Osinski and doesn't like the word hold-out.
"I would never use the word holdout," Beaulieu said yesterday. "In respect for the privacy of those we work with, we don't negotiate through the media and won't discuss our negotiations with any property owner."
Osinski said a major gap in making a deal is coming to an agreement on the worth of the former Sidewalk Cafe property.
"We believe we have a reasonable and defendable number in mind for the worth of the property," Osinski said. "We are seeking a way to close the gap with the Thompson Group on these outstanding issues so we can strike a deal."
According to information in the assessors' office, the property at 25 Ocean Front South is assessed at $2,272,600 and is currently paying almost $21,000 annually in taxes.
Osinski said long before the Thompson Group was part of the development scene at the beach, he and Gallagher had plans to build a mixed-use complex at the site, including condos, a beach club and retail stores. Their plan included a building that maximized the height allowed in the beach zoning regulations and included some luxury penthouse condos.
About a year ago, after many lengthy negotiations that failed to gel into a deal, the Thompson Group and the Capolupo family agreed to go their separate ways. As a result, the Thompson Group and the Capolupo family put out joint statements that the Capolupos' properties — the oceanfront Surfside5 and Pavillion, as well as Driftway's Capri Italian Restaurant — will not be rolled into the Thompson Group's vision, but would coordinate with them.
As Osinski and Gallagher's negotiations with the Thompson Group have bogged down over price and other issues, Osinski and Gallagher have once again begun internal discussions on how they would move forward themselves, Osinski said.
But, he added, he still believes the best way to redevelop the beach is one or two comprehensive master plans, such as the Capolupos' and Thompson Group's.
"We have a strong alliance with the beach community in Salisbury," Osinski said. "We in no way want to be a holdout or be the cause of the failure of this project to move forward."
But the time span for tying up negotiations isn't infinite, Beaulieu said.
"Obviously, we can't go on indefinitely, but I can't give you an exact time line," Beaulieu said. "We working as fast as we can to get this done."