Newport Material's Cunning Ploy

[Robo]

This is going to come down to what that 1981 agreement with the town states and what the courts decide and our desires will not matter. I think the risk/reward is in Newport's favor to spend a few hundred thousand in legal fees to potentially get > $10M from a legal verdict. This could turn into a costly proposition for us taxpayers.

[rcweir]

My understanding is that Newport Materials does not in fact own the land. They have an "option to purchase" it from 540 Groton Road, LLC. I don't think the terms of that agreement were ever made public, but typically these purchase options have an expiration date. They don't last forever. If you don't exercise your right to purchase the land by that expiration date then you get nothing.

So let's review.

A few weeks ago Newport tells the Town that they want $10 million for the land. That was before they 'discovered' the granite. So that tells us that their option was to purchase the land for something less than $10 million. If 540 Groton Road., LLC agreed to sell for that amount, then presumably they thought it was a good deal for them as well, at least at the time. If the deal goes through, they get the money plus their option premium. If the deal fails, then they still keep the option premium and find another buyer.

Now jump ahead to this week. Newport has "discovered" granite and now claims the land is worth 5-10x as much as before. So how do you think 540 Groton Road, LLC thinks about that? If true, that means that they must sell that parcel of land to Newport, within the exercise period of the option, if Newport wants to purchase it, for far far less than the land may now be worth (if we are to believe Newport). What do you think 540 Groton Road, LLC thinks about that? Is it still a good deal for them? Don't you think that they now want to see the deal fall apart, so they can sell the land for the new market value? Don't you think that they would rather have the extra $90 million rather than Newport? Don't you think that it is in their best interest to see the purchase option expire unexercised? Don't you think they have their "smart guys" looking at how to make that happen?

If I were 540 Groton Road, LLC, I'd look carefully through my files. Maybe I find something that I forgot to send the Planning Board or the Board of Health earlier? Maybe something fell under the photocopier? Whoops. Best to just fess up and send it now. If I happen to make an extra $90 million profit by making this late disclosure, that's OK too. I do well by doing good.

That's what you would expect, if 1) The new FMV estimate is genuine, and 2) the parties are independent and acting in their own interests. I would not assume that Newport and 540 Groton Road still have aligned interests. My read of the revaluation of the land suggests they should now have opposing interests.

[rcweir]

Amusing that "Cathartes" is the scientific name for the turkey vulture. It is nice to know they have a sense of humor. Let's see if they have any other sense.

[Alisa]

Folks have posted a few questions about the matter.

I have copies of the November 1981 Fletcher agreement, covenant, and option, if anyone would like to review them.

Page 9 of the covenant reads:
"This Covenant shall be binding upon and inure to the benefit of the Company and the Town and their respective successors and assigns, it being the express intention, understanding and agreement of the parties hereto, that this Covenant shall constitute a covenant running with the land. In the event of a sale of all or any part of the Property to another party, (i) such party shall be bound by the obligations hereof and have the rights provided herein as to the part of the Property owned by such party, and (ii) all references to the "Company" herein shall be deemed to include reference to all parties (including the Company) which then own a fee interest in the Property."

Also, to clarify, it is not Newport Materials that is calling the option, as they have represented themselves to simply be tenants leasing a few acres upon the entire parcel, rather, it's the 540 Groton Road, LLC which has called the option.

[rcweir]

Alisa, do you think 540 Groton Road, LLC owns the rights to the parcel? I'm not so sure. Did you see the 2007 mortgage (check Northern Middlesex Registry of Deeds 5/15/2007). Mortgage held by Enterprise Bank and Trust, Lowell Branch.

I am not a lawyer, of course, but reading that it sure sounds like Enterprise Bank owns all rights and interest in the property, including the mineral rights (called out explicitly).

540 Groton Road, LLC also promised, "neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from the Property"'.

Was Enterprise Bank involved at all in the hearings on the asphalt plant?

[dweir]

One of the Cathartes principals is a hero.

[Alisa]

If my recollection is correct, he grew up in Westford, and his father served as a Selectman. I've come to expect great character and courage of Westfordians.

Regarding the previous question: "Was Enterprise Bank involved at all in the hearings on the asphalt plant? "

Not that I observed.

[Tony1941]

One of the Cathartes principals is a hero.

IMHO maybe "these heroes next door" should be awarded some kind of recognition.
I personally have a a very high standard to call someone a hero. Even some individuals awarded , the "Congressional" Medal of Honor of which I am familiar of the incident do not meet my standard.
Certainly, John Kerry shooting and killing a wounded 17 year old VC in the back attempting to flee the battlefield does not IMHO opinion deserve a Silver Star for being a hero.

[Tony1941]

540 Groton Road, LLC also promised, "neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from the Property"'.

Since asphalt is part of the constituent hydrocarbons that are part of petroleum and petroleum is considered a hazardous substance, does that make asphalt a hazardous substance?

IMHO, the town should take over all quarries and the proposed asphalt plant over by eminent domain.