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Tuesday, September 24, 2013

Big document drop discloses details on Whalerock deal

A dozen legal actions cancelled, complex property shuffle carried out
By Will Collette

Two days after the town closed the deal to buy the site of Larry LeBlanc’s proposed Whalerock wind farm, the town sent me more documents related to the deal and to the termination of all the complex legal maneuvering that surrounded the deal.

These documents totaled just under 150 pages. The largest item was the 128-page closing package (click here to read). 

Also included were ten motions filed in Superior Court to terminate all the legal actions connected to battles over the property.

Charlestown paid $2,114,415 for 74.91 acres out of the total 81 acre package. Charlestown paid an additional $12,232.50 in closing costs for town attorney time and title insurance.

LeBlanc partner James Barrows received final Charlestown approval – in world record time, and probably precedent-setting manner – for a two house-lot subdivision of 6.86 acres that was carved out of the original 81-acre site.

Among the documents were a number that ended various parts of the Whalerock battle including: 

  • Withdrawal of Whalerock’s application for a special use permit from the Zoning Board of Review
  • Termination of the deal Larry LeBlanc had with NIN LLC to lease land back from NIN to build the wind project
  • Withdrawal of all projects proposed for the land (the wind turbine, the affordable housing development, etc.). Everything except the two house lot subdivision that approved by the town). 
  • General release of all claims by LL LLC (LeBlanc’s property company) against Charlestown
  • General release of all claims by Whalerock (LeBlanc’s wind turbine company) against Charlestown
  • General release of all claims by NIN LLC (the partnership of James Barrows and LeBlanc) against Charlestown
  • General release of all claims by CCAH LLC (LeBlanc’s affordable housing company) against Charlestown
  • A total of ten “stipulations of dismissal” filed in Superior Court that cancel all the suits and counter-suits by LeBlanc and Barrows against Charlestown, and by Charlestown against LeBlanc and Barrows.

New subdivision proposed by Barrows was approved by Platner and the
Planning Commission in record time. Will this become the new standard?
Super-quick approvals come when you threaten the town?
There were a few tidbits of new information in this batch of documents. We learn for the first time that the NIN LLC company that was formed on December 31, 2012 to carry out the sales-leaseback deal between LeBlanc and Barrows was actually a partnership between LeBlanc and Barrows, and not just Barrows alone.

LLCs (“limited liability corporations”) are not required to disclose much information about themselves other than where they are located and who is their resident agent. The address listed on NIN's initial corporate filing allowed me to trace it back to the home of James Barrows and that was the first time his name emerged as connected to the Whalerock deal. 

In the closing documents, there is a more detailed description of NIN, showing that it was structured as a partnership where a 99% share was held by Barrows and a 1% share was held by LeBlanc.

In this fashion, LeBlanc was actually doing business with himself when the sale-leaseback deal was done, and the town was also negotiating with LeBlanc and not just Barrows, contrary to what many of the Whalerock opponents believed.

Another new name emerged and that was John Caprio who had given Larry LeBlanc a mortgage of $700,000 on the Whalerock property. There is no identification for John Caprio in the documents released to me, only his lawyer’s name. 

As you might imagine, there are a lot John Caprios in Rhode Island, but I can’t be sure which one it is. I’d like to think it’s the 40-year old East Greenwich businessman John Caprio who had his 15 minutes of fame for dating Paula Abdul but I can’t confirm that.

All I can say for sure is that discharge of Caprio’s mortgage was part of the closing. He received $680,449.99 after current interest and the discharge fee were added and the escrowed down payment was subtracted. The Settlement statement on page 121 details the complex cash transactions that took place at closing.

Developer Larry LeBlanc received $2,000,000 from James Barrows for title to the 81 acres so Barrows could then sell 75 acres to Charlestown and keep the rest for his two-house lot subdivision. There was an $8000 transfer tax on that deal.

It’s not clear from the documents the town sent me exactly how Barrows paid LeBlanc. After the pay-off of the mortgage to Caprio, taxes and settlement costs, the net paid to NIN LLC was $1,404,890. It is unclear from the documents whether the final payment to LeBlanc included Caprio’s $700,000 mortgage.

So much for the white whale!
Based on the termination agreement on page 87 that cancels LeBlanc’s leaseback deal with NIN, it looks like NIN will not be obligated to pay LeBlanc $500,000 if the Whalerock project is cancelled as was stipulated in the lease agreement.

Lawyers like to use the expression, “at the end of the day,” which actually fits if that day is September 18, 2013.

At the end of that day, Charlestown became the owner of just under 75 acres of prime open space on the moraine overlooking Scenic Route One.

Charlestown spent every last cent it had in Open Space/Recreation Bond funding…and then some if you count the extra $12,232 in closing costs.

Those 75 acres the town now owns come off the Charlestown tax rolls.

LeBlanc and Barrows paid $16,458 in property transfer tax stamps - $8,000 when LeBlanc conveyed the 81 acres to NIN for $2,000,000 and $8,458 when NIN conveyed the 75 acres to Charlestown for $2,114,445.

Larry LeBlanc got his money which was either $2 million or that minus $700,000 paid to John Caprio to discharge his mortgage.

James Barrows didn’t end up with any money, as far as I can tell. He may owe LeBlanc money, but probably not.

Barrows does have in hand a super-expedited Planning Commission blessing to build two homes on seven acres on Route One carved out of the southwestern corner of the Whalerock land. I’m guessing those two properties will probably end up on the tax rolls worth about $500,000 each.

All those proposed projects that plagued the town and literally maddened the neighbors are now gone. Hopefully with time and perhaps some professional help, the neighborhood can return to some semblance of normalcy.

All the lawsuits are gone. All the lawyers will have to find other ways to rack up the billable hours. No more experts, no more engineers, no more quack scientists.

What are Platner and Gentz planning next?
At the end of the day, September 18, the Zoning Board of Review is off the hook. No more embarrassing Whalerock hearings. And perhaps Town Council Boss Tom Gentz (CCA Party) will lift his hold on the re-appointments of the three remaining ZBR members whose terms expired in July.

What we do not know at the end of that day is what Boss Gentz and his CCA Party colleagues have in mind for those 75 acres in the future. Will Gentz and Planning Commissar Ruth Platner pursue their intent to now give away the land? There were no documents included in the package that even hint at the plans for the future.

It took three long, rancorous, messy years to get to the September 18 closing. While the closing resolved many of the issues, there are still loose ends that need to be tied up and plans to be made for that land’s future. It could be a wonderful opportunity for Charlestown to not only take full advantage of a new asset, but also a chance to heal a lot of wounds, provided we don’t blow it.

NOTE: I did not upload the ten stipulations filed by the players in Superior Court on September 18 since they are all pretty much the same and add little insight to the debate. Here is one of them as an example – click here. If you want a complete set of all ten dismissals, send me an e-mail via Progressive Charlestown.