Developer sues, says Westborough didn't follow RFP criteria in awarding cinema bid

WESTBOROUGH — A Southborough company is suing the Town of Westborough over its decision to bypass it in favor of another company in a bid to redevelop the former Regal Cinemas property on Route 9.

Ferris Development Group filed suit last week in Worcester Superior Court, saying the Westborough Select Board did not follow the criteria listed in the official Request for Proposals.

“They are violating the Massachusetts procurement laws, and avoiding the criteria they set to award the bid,” David Ferris, CEO of Southborough-based Ferris Development, told the Daily News.

The Select Board on Nov. 2 awarded the bid to LAX Media, a Walpole company that operates multiple movie theaters throughout New England. LAX Media was one of three bidders, along with Ferris, which proposed converting the building into a business center and office building for local small businesses and tradesmen; and the PulteGroup, a housing developer that proposed to raze the cinema and build 108 condominiums on the site.

LAX Media submitted the lowest bid for the property, at $2.5 million, while Ferris bid $2.8 million and PulteGroup bid $7.94 million. According to the Select Board, the town had five criteria on which bids would be evaluated; purchase price, financial benefits, financial resources of the bidder, the ability to proceed and sustainability.

Earlier: Westborough Select Board awards bid to revive former Regal property into new cinema

During the Nov. 2 meeting, Select Board Chair Ian Johnson said that LAX Media, despite having the lowest bid, fit the criteria best.

"As we went through and evaluated our criteria in those five areas, we came out with Ferris and Pulte having two advantageous ratings, and LAX Media had three," Johnson said. "In the least favorable category, Ferris and LAX had zero and Pulte had two. That was the process we went through, there was one bid that came to the top of that."

Ferris claims superior bid, greater resources

Ferris filed its civil action suit on Nov. 14.

The lawsuit states that Ferris had a superior bid in terms of purchase price, bidding $2.8 million compared to LAX Media at $2.5 million. The lawsuit also states that Ferris had greater financial resources, noting it had $5 million on hand in cash, while LAX Media had a pre-approval letter from a hard-money lender for $1.5 million. The lawsuit states that Ferris had superior sustainability with its project, proposing conservation restrictions for nearby wetlands and to power the building via solar farm, while LAX Media offered nothing similar.

Three proposals: What will become of the former Regal Cinemas site in Westborough?

The lawsuit also states that the use of the property was not listed as a criteria in the RFP, meaning that LAX Media’s proposal to retain it as a movie theater should not have impacted the awarding of the bid.

The lawsuit alleges that Ferris’ bid was significantly superior to LAX Media's, stating that “Westborough was obliged to apply the criteria rationally, and no rational person could have concluded that LAX submitted a proposal that was superior to Ferris Development’s proposal under the criteria listed by the town in the RFP.”

LAX Media is listed as a defendant in the case, alongside the town.

The lawsuit seeks to have a preliminary injunction against the town and LAX Media that will prevent a purchase and sale agreement from being signed, as well as requiring Westborough to award the purchase and sale to Ferris, given the alleged superiority of Ferris’ bid.

A hearing has been set for Dec. 8 in Worcester Superior Court to set a restraining order to prevent any purchase and sale order from being signed.

The former Regal Cinemas site has been vacant since 2017. The town originally sought to organize the sale of the property in 2018, but a dispute over who owned the property delayed that action. The town officially seized control of the building earlier this year, and sent out the RFP on Aug. 1.

Neither Westborough town officials nor LAX Media responded to requests for comment by midday Wednesday.

This article originally appeared on MetroWest Daily News: Westborough Regal Cinema property plans held up by lawsuit