, Newburyport, MA

September 3, 2007

Third time not the charm for Newburyport waterfront

Victor Tine/Staff Writer

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Editor’s note: This is the third story in a series on the waterfront’s development.

In early March 1989, Newburyport’s Board of Appeals awarded local developer Roger Foster the zoning variances he needed to build a hotel on the city’s central waterfront.

A leading opponent of the plan, City Councilor Laura Rowe, was asked for her reaction to the board’s ruling.

“We’ve lost the battle, but we haven’t lost the war,” she replied.

She got that right.

The Newburyport Redevelopment Authority’s third — and so far final — attempt to develop the central waterfront turned into a protracted war of attrition that, like the two previous efforts, ended in failure.

Even by Newburyport urban renewal standards, it was a lengthy process.

After a hotel-and-condominium development collapsed in 1985, the NRA went back to the drawing board. A new request for proposals was issued in 1986, and no fewer than nine development groups responded.

After a round of interviews in early 1987, the field was trimmed to four. A group headed by Roger Foster, who owned a number of buildings on State Street, was selected in September.

Foster’s original plan showed an 80-room hotel to the west of Market Landing Park and seven Federal-style commercial buildings to the east.

“It was without question the highest point in my career,” Foster said in a recent interview. “It was the beginning of the biggest business challenge I’ve ever faced.”

Obstacles started popping up almost immediately. Rowe and a number of other advocates of public access to the Merrimack River had formed the Committee for an Open Waterfront and succeeded in placing a series of nonbinding referendum questions about development on the November municipal election ballot.

While pro-development candidate Edward Molin handily won the mayoral election, the nonbinding referendum questions showed local voters to be overwhelmingly opposed to waterfront development. A “no development” option captured 75 percent of the votes. Voters defeated an option for a “hotel-and-mixed-use” package by a similar margin. A “hotel-only” option was also defeated, but by a somewhat smaller margin.

NRA members tried to put the best face on the results, arguing the questions were ambiguous or that voters didn’t have enough information to make informed decisions.

Molin during the campaign had said he would pay attention to the referendum results, although he did not promise to follow them.

A month after taking office in January 1988, Molin announced his position: He would support a hotel, but on the easterly side of the park. The west lot would be retained for parking.

Foster and his architect, local resident Stan Neilsen, reworked their plans to conform to the new rules. They came up with a 123-room inn-and-conference center where the paved waterfront parking lot is today. In early 1989, they went before the Board of Appeals for their zoning variances. It was the first time a waterfront development plan had gone that far.

The zoning board held five grueling nights of hearings over nearly two weeks, taking testimony and deliberating for more than 21 hours. The board’s final meeting on March 1 lasted six hours and ended in the wee hours of the morning with a 4-1 vote in favor of the hotel.

Lawsuits follow

“Bag job! Bag job!” was the immediate and vehement reaction of one anti-development advocate in the audience, Ward 4 City Councilor John Battis, who vowed to see the zoning board in court.

Two local people, Merrimack Landing resident Sonya Marashlian and antiques dealer Chris Snow, filed suit at the end of March, joined by the Committee for an Open Waterfront, the City Council and the Planning Board. It was the beginning of a six-year march through the state court system.

In November, Molin was defeated for re-election by Peter Matthews, who had previously been mayor is 1986-’87. Matthews had previously been in favor of a waterfront hotel but had changed his mind and was now opposed.

Meanwhile, the NRA signed a land disposition agreement in April 1990 to sell the easterly hotel parcel to Foster. The price of the 2.1 acres east of Market Landing Park would be determined by an appraisal.

A Superior Court judge dismissed the zoning case in August 1990. The court had previously found that the Committee for an open Waterfront couldn’t be a party to the suit. Marashlian and Snow continued to appeal.

While the case was winding its way through the court, Foster’s financial fortunes were taking a turn for the worse. In February 1992, Foster filed for federal bankruptcy protection. He maintained the bankruptcy filing did not affect his ability to build the hotel. Foster’s five State Street buildings were sold for $1 million at a bankruptcy auction in May. The buyer was local business owner Charles Lagasse.

Also in 1992, NRA members had decided that they needed to renegotiate the land disposition agreement, which allowed Foster to deduct up to 70 percent of his costs from the price he would pay for the land.

Unable to reach an agreement, the NRA filed suit, asking the Superior Court to determine whether the agreement was legal. Foster filed a countersuit against the NRA, later adding the city and Mayor Matthews as defendants. He sought damages of $12.5 million in lost profits.

Foster was waging legal battles on two fronts. The zoning case on his 1989 variance was before the Appeals Court.

The state Appeals Court ruled against Marashlian and Snow in the zoning case in 1994 and the Supreme Judicial Court did the same in early 1996, on a unanimous 7-0 vote, after hearing oral arguments in the fall of 1995.

Soon after the SJC decision, Foster and then-Mayor Lisa Mead, an open waterfront advocate, jointly said they would delay the lawsuit over the land disposition agreement while they worked on a compromise.

Mead and Foster came up with a plan in 1997 that would relax zoning rules for developers on the waterfront in exchange for guaranteed public access.

Deal falls apart

Before the plan could be sent to the City Council for enactment, Mead left office in August to take a job with U.S. Sen. John Kerry. She was succeeded by the City Council president, Christopher Sullivan, who scrapped the compromise crafted by Mead and Foster.

Sullivan did not run for election in 1997. The surprise winner of the mayoral race was another anti-hotel city councilor, Mary Carrier. Taking office in January 1998, Carrier said she wanted to appoint a committee to find a suitable alternative location for Foster’s hotel.

Carrier persuaded Gov. Paul Cellucci to appoint the leader of the anti-hotel movement, Laura Rowe, to the one state-controlled seat on the five-member Redevelopment Authority board.

By the fall of 1998, negotiations between Foster and the NRA over the land disposition agreement had broken down. Instead of going to trial, the two sides asked for what is known as a “summary judgment,” a ruling on the law after the two sides have agreed to the facts of the case.

Foster had dropped his $12.5 million suit against the city and Peter Matthews in October, saying he wanted to concentrate on the Redevelopment Authority.

Lawyers for Foster and the NRA argued their positions on Feb. 26, 1999, before Judge Richard Welch, coincidentally a Newburyport resident. It took Welch less than a week to issue a ruling, siding entirely with the NRA and finding the nearly 9-year-old land disposition agreement to be invalid. Foster had no right to develop the waterfront.

Foster appealed Welch’s decision. While that case went forward, the NRA decided to poll city residents about their preferences, the first such comprehensive opinion survey since the 1987 referendum questions.

With their 2000 city census forms, Newburyport residents also received a questionnaire about what they wanted to see on their waterfront.

Close to 8,000 surveys were mailed, and 4,011 were returned, then-NRA Chairman Mary Lou Supple said.

Of those, 49 percent of respondents wanted a “park only” on the property. About 37 percent wanted “park and commercial” use, and 8 percent said “commercial only.”

In a separate mailing to business, 43 percent of 162 respondents wanted “park and commercial” use, 42 percent said “park only,” and 15 percent said “commercial only.”

Foster’s appeal never made it to the Appeals Court. He dropped his case in 2002.

“I looked at my life, I saw I didn’t have the resources, and I threw in the towel,” Foster said.

Foster still lives in Newburyport, and he said he harbors no ill will toward anyone involved in the process.

“I firmly believe that everybody was operating in what they believed was the best interest of the city,” he said recently.

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