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Monday, February 18, 2013

NEW: Larry LeBlanc signs deal to sell and lease back Whalerock land

Connecticut developer agrees to $2 million deal to buy LarryLand
By Will Collette

Charlestown continues to be embroiled in a complex maze of lawsuits over developer Larry LeBlanc’s proposal to build an industrial wind farm on top of the Charlestown moraine overlooking Route One. The lawsuits drag on and new ones regularly get added. 

New litigation recently filed by a much diminished group of local residents now led by Ron Areglado (losing CCA Town Council candidate and recently-appointed Chariho School Committee representative) mean that the Town Council, the Town Zoning Board, LeBlanc’s Whalerock LLC wind farm and CCAH LLC proposed affordable housing complex, and a group of former Ill Wind RI members are all suing each other.

That’s pretty much where we were a couple of months ago, when state Judge Judith Savage threw all the lawsuits out and chastised all of the litigants for shoddy legal work.

Since then, the Zoning Board again held a hearing on Whalerock’s appeal of actions by the town to deny it a permit to proceed with the wind farm. The Zoning Board, which is required to decide on legal grounds, not personal preference, decided, again, in Whalerock’s favor. That led to the new tidal wave of lawsuits.

But now there’s a new wrinkle that emerged out of papers buried in recent court filings.

Thar she blows!

On December 31, 2012, Larry LeBlanc signed a sales agreement with “N.I.N. LLC,” a limited liability corporation that was incorporated that same day the agreement was signed. The agreement calls for N.I.N. to buy the 81 acres where LeBlanc proposes to build his unpopular Whalerock wind farm. 

The sale price is $2 million and the agreement calls for the purchase to be completed no later than December 31, 2013.

A related agreement was signed at the same time that permits LeBlanc to lease land back from NIN to build the Whalerock wind farm and provides for N.I.N. to do whatever it wants to do with the remaining acreage.

These two documents are buried at the very end of a 117-page document full of joint exhibits filed by LeBlanc’s attorney Nick Gorham as supplementary information in the various lawsuits. The documents run from pages 106 through 117 in the original document. For your convenience, we have isolated these two documents which you can read by clicking here.

N.I.N. LLC is only identified by its address. It’s up to your imagination to figure out what “N.I.N.” stands for (“Not in Ninigret,” ”Narragansett Indian Nation”?). 

However, I can tell you that the address, 62 Salmon Drive in Brooklyn, CT is the home of James R. Barrows who is a CPA and real estate developer who has quite a number of real estate LLCs under his name. He graduated from Bryant and used to live in Barrington where still owns Barrington Rentals. Barrows’ signature appears on the sales agreement, signing on behalf of N.I.N.

Under the terms of the sales agreement, Barrows will pay LeBlanc $20,000 for points on the financing of the deal and monthly interest on the balance due at the rate of 5%/year. Presuming Barrows doesn’t pay on the principal, that monthly interest payment will be around $8,300. These payments are non-refundable.

Under the terms of the leasing agreement, LeBlanc will pay rent to Barrows equal to 50% of the net profits he hopes to generate, literally, from the wind farm. LeBlanc's 25-year lease starts only when the Whalerock project starts to generate profits.

However, if Barrows decides he wants to cancel the lease deal before the wind farm begins construction, he will have to pay LeBlanc $500,000.

The land remains registered to LeBlanc’s L.L. LLC on Charlestown’s tax rolls. The deed that transfers title to N. I. N. when the sale closes has been drawn up and filed with the escrow agent, South County Real Estate Title Insurance in Wakefield.

I have asked the principals of Whalerock LLC to confirm and comment on these details and to explain whether they plan to pursue their proposed affordable housing complex (under the name CCAH LLC) or transfer that part of their proposed uses of the land to Barrows. I have not received a reply as of press time.

Both the sales document and the leaseback agreement indicate that Whalerock’s proposed industrial wind farm is still very much on the table, but are silent on LeBlanc’s housing proposal, which is also currently in litigation. Barrows, on the other hand, has lots of experience with residential housing development, including several years as a Pulte Homes manager.

In my e-mail to Whalerock, I also asked whether this recent deal means they are no longer interested in negotiating a fair price to sell the land to be set aside as open space.

Even though the sales and leaseback agreements have been signed, I don’t see a whole lot of skin in the game. Barrows’ obligations are the $20,000 and the monthly interest payments. There are penalties on him if he defaults on the sale or wants to back out of the lease, but I see very little trouble for LeBlanc to pull the plug on this deal – except of course, he would presumably have to satisfy his new partner.

LeBlanc's lawyer, Nick Gorham asks Town
Council to negotiate - Council says No.
There was a public exchange a year and a half ago between LeBlanc’s lawyer and the Town Council over the question of the town buying LeBlanc’s property and putting an end, once and for all, to this tense little soap opera. Click here to watch Clerkbase video of that August 10, 2011 exchange.

LeBlanc’s lawyer Nick Gorham said LeBlanc’s offer was for $3 million. Councilor Dan Slattery countered that the latest assessment for the land was less than $1 million. 

Slattery’s pugnacious attitude, backed up by equally obstinate attitudes from the Ill Winders left that discussion with the two sides locked into their prices - $3 million on one side and $1 million or less on the other – without the prospect for finding a fair deal in the middle.

Town Council Boss Tom Gentz, who favored acquisition of the land for open space, actually polled the audience in the Council chambers, asking them who favored making a deal with LeBlanc. 

Only two people raised their hands – Planning Commissar Ruth Platner and me. Even though Platner and I represent opposite poles in Charlestown politics, our one-time consensus made no difference to the Council.

In my opinion, LeBlanc’s new maneuver is a nuanced signal to Charlestown – deal with me, and deal with me fairly, or I’m going to push for BOTH the wind farm AND the dense cluster of affordable housing units smack-dab on the moraine overlooking Scenic US One. And, for those with truly suspicious minds, you can read a casino into those mysterious “N.I.N.” initials.

There’s this tantalizing clue – the file tag that runs along the top of the pages in Exhibit 11:

I think it’s time for Charlestown to think long and hard about its self-interest. The public interest. I think the people in Ill Wind need to get over their antipathy toward LeBlanc who, by all appearances, doesn’t seem to be interested in winning any popularity contests. He just wants his money and will do whatever it takes to get it.

Now that the new sales agreement sets a new bar for an open space deal – i.e. if we had negotiated in good faith when LeBlanc made his last offer, we might have gotten the land from between $1 and $2 million, now it will surely cost over $2 million– enough to satisfy not only LeBlanc but his new collaborator, James R. Barrows.

The good news is that LarryLand still has great open space potential and we may be able to interest RI DEM to come to the table with its newly approved open space bond money.

NK Green on-line with no complaints ( photo by Tim Faulkner)
That presumes that LeBlanc’s latest move is a feint, rather than a determined push to actually get both  the wind farm and the housing development built. 

In North Kingstown, there’s already one of Rhode Island’s largest operating wind turbines sited right in the middle of a new housing development – North Kingstown Green.

That project was bitterly opposed by local wind NIMBYs but since it’s gone on line, it has apparently not caused any further public controversy. The sales-leaseback deal seems to signal that type of development for LarryLand.

I have written several pieces in Progressive Charlestown recommending in the strongest terms that it is in Charlestown’s self-interest to buy LarryLand for open space. Please read my most recent: “Five Reasons Why Charlestown Should Get Serious About Buying LarryLand.”

It’s not just about Whalerock, which I think is not just bad for Charlestown, but also not practical for lack of wind energy to make the project viable. It’s not just about LeBlanc’s proposed affordable housing complex – I like affordable housing projects, but prefer to see them done by non-profit entities and in better locations.

It’s also about Charlestown’s seemingly never-ending anxiety about a casino, anxiety which may be fueled by the mysterious “N.I.N.” moniker.

Taking those 81 acres as open space, whether it’s under state DEM, town or non-profit control, removes this whole array of undesirable land uses totally off the table. To those suffering from LeBlancophobia, get over it, and start thinking about the common good.