Letters Fly Thick and Fast as Portsmouth, Developer Negotiate McIntyre Project


Image courtesy of Redgate/Kane

A series of letters between lawyers for the city of Portsmouth and the development team seeking to renovate a disused federal building in the city’s historic heart are trying to find an “economically neutral” solution to voters’ objections to previous project plans.

Redgate/Kane had proposed to renovate the existing, landmarked McIntyre Federal Building for office space and build two new buildings containing 76 apartments and 92 covered parking spaces on the site’s current parking lot. The development already has an anchor tenant signed up, the marketing agency Hubspot. However, voters turfed out many of the city councilors who supported the project and the new Portsmouth City Council voted earlier this year to reject a development agreement the previous council had inked with Redgate/Kane.

In response, the development team threatened to sue for “tens of millions” of dollars in damages, giving a deadline of Feb. 29 for the city to reverse its vote. However, closed-door negotiations  between a council subcommittee and Redgate/Kane are ongoing over potential changes, which include a city request for more open space.

In a Feb. 25 letter to the city, Redgate/Kane lawyer Robert Ciandella said the City Council should only ask for changes to the proposed development that are “economically neutral” for the development team.

In response, city attorney Robert Sullivan wrote to Ciandella that the city would consider the development team’s request, but asked that the threat of a lawsuit be suspended for 60 days as the threat “distracts the City’s efforts to reach accord;” in exchange, the subcommittee would recommend the City Council suspend its own Jan. 28 vote rejecting the development agreement for 60 days. In the letter, Sullivan also asked Redgate/Kane to consider bringing a post office back into the McIntyre site as it would “be viewed as a major public benefit.”

Ciandella replied in a March 2 letter saying the subcommitee’s position was “unacceptable.”

“A framework of economic neutrality merely preserves for the Developer the benefits to which it is already entitled by the binding Agreement. It is not a proposal or concept requiring consideration or exploration,” he wrote. “[T]he commitment to a framework of economic neutrality is the fundamental starting point of any path leading to resolution.”

Ciandella concluded his letter saying there was “nothing further to discuss” unless the city “promptly commits” to the economic neutrality idea. However, the Portsmouth Herald reports city officials are confident concerns raised by the National Park Service, which is overseeing the transfer of the federally-owned McIntyre Building, about how much profit Redgate/Kane would make give them enough leverage to reach a deal.