Portsmouth, Redgate/Kane begin settlement discussions in McIntyre dispute

PORTSMOUTH — The city and its estranged partners in the effort to redevelop the Thomas J. McIntyre federal building property “have restarted settlement discussions” to try to end their legal dispute.

Manchester attorney Michael J. Connolly, who is representing the city in the lawsuit with Redgate/Kane — the city’s onetime development partners — stated in court papers the settlement discussions began again in “recent days.”

Connolly asked for — and the court agreed — to postpone a court hearing between the parties that had been scheduled for Jan. 31 until Feb. 28 – “in order to allow sufficient time to explore settlement” discussions “and perhaps obviate the need for involvement of the court.”

Superior Court Judge Martin Honigberg granted the motion to continue the hearing and scheduled a new court date for the city and Redgate/Kane for Feb. 28.

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The former City Council voted 5-4 in November to immediately terminate their development agreement with Redgate/Kane after its former development partners restarted a lawsuit against the city.

The city also released a Request For Proposals (RFP) seeking new partners for the redevelopment of the McIntyre property, which is located in the heart of Portsmouth’s downtown near the city’s popular waterfront. The five councilors who voted in favor of the termination had all been voted out of office and made the decision during the final weeks of their terms.

Attorneys for Redgate/Kane then filed a request for an injunction from Rockingham Superior Court, which seeks to prevent the city from engaging with a new partner in the redevelopment of the McIntyre property.

That request led to the initial scheduling of the Jan. 31 court hearing, which has been pushed to Feb. 28.

'Various concepts' of what settlement could look like

City Attorney Robert Sullivan stated Wednesday that “since the filing of that lawsuit it has been the city’s effort to settle the case and that effort continues.”

Asked if the city is seeking to settle the lawsuit and move forward with Redgate/Kane to redevelop the McIntyre property, Sullivan said, “There are various possible concepts of settlement, which include proceeding with Redgate/Kane, but there are others as well.”

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He stressed that “from my perspective there’s never been a break in an effort to settle the case.”

Mayor Deaglan McEachern said Wednesday he was “happy” that the two sides are again involved in settlement discussions.

“I am an optimist by nature so I’m optimistic that cooler heads can prevail here,” he said. “Anytime that we can stay out of court means Portsmouth taxpayers aren’t paying big shot attorneys to represent the city.”

“My goal is to settle the lawsuit and remove that from hanging over our heads, once we do that, there’s more options,” he said about the discussions.

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Competing developer's plan

Developer William Binnie, the president of Portsmouth’s Carlisle Capital Corporation, was the lone developer to respond to the recent RFP.

The mixed-use project proposed by Carlisle features an indoor/outdoor plaza, an urban park, restaurant and retail use, a “grand staircase” and 4,000 square feet of additional restaurant and retail space on the Bow Street side of the site.

Binnie's pitch for McIntyre project: Urban park, indoor/outdoor plaza, restaurants, retail

As part of the agreement to postpone the court hearing, Connolly said “the city submits that the Plaintiff (Redgate/Kane which is also known as Sobow Square LLC) will not be prejudiced should the requested relief be allowed by the court, as the city has agreed to preserve the status quo pending the hearing on plaintiff’s motion by not entertaining or accepting any proposal and not negotiating or entering into any agreement concerning the McIntyre project.”

McEachern declined to comment on the new redevelopment proposal, saying “the RFP is squarely what we’ve been advised by counsel to steer clear from for the moment.”

Reached Friday, Michael Kane, the president and CEO of The Kane Company, declined to comment on the status of the legal case.

A previous City Council voted in 2019 to approve Redgate/Kane’s redevelopment plan, which called for renovating the existing McIntyre building for office space and adding two new mixed-use residential buildings to the site.

Last term’s City Council rejected a draft ground lease with Redgate/Kane, leading the developers to file a lawsuit against the city in March 2020, which they suspended and then restarted in the fall of 2021.

The city has been working to acquire the 2.1-acre federal building property for free during the last several years through the Historic Monument Program, which the National Park Service (NPS) administers.

The NPS must approve the final application the city submits for the redevelopment project — including the financial plan and how much profit the developer can make — and the McIntyre building can be renovated, but not taken down.

This article originally appeared on Portsmouth Herald: Portsmouth NH, Redgate/Kane trying to end the McIntyre legal dispute