The development team seeking to revive a federal office building in Portsmouth with a mix of offices, residential units and retail say the city is in danger of breaking its contract with them. Photo courtesy of Principle Group

The redevelopment process for the Thomas J. McIntyre federal building property continues to move along, with the design plan for the downtown property slated to be readied by the McIntyre Subcommittee on April 14. 

Of course, there’s still some animosity between city officials and the Redgate/Kane development team on how the final project will look, but the city is moving forward even without having their full backing.  

At the most recent McIntyre Subcommittee meeting, held virtually on March 30, no public comments were offered, and City Councilor Peter Whelan and the rest of the committee continued to endorse the aggressive design timeline proposed last year. 

Once the final design is approved, completion of an application to the National Parks Service to OK the plans will be targeted for the end of May. That means that there’s less than seven weeks until an agreement between the Park Service and the Redgate/Kane joint-venture development team must be finalized.  

“It’s very realistic to think that we would have a new development agreement, and desirably, a new ground lease as well in time for the May 31 submission,” Robert Sullivan, Portsmouth’s city attorney, said at the recent meeting.  

City Councilor Deaglan McEachern acknowledged the deadlines are ambitious, but he sees no reason why things can’t progress in time and feels this is a project that needs to be prioritized. 

The Principle Group, the Boston-based design company charged with the project, has already presented eight sketches to the committee, many based on ideas from the public on how they envision the property. More than 175 residents presented their ideas in January and the sketches were provided during a meeting in mid-March.  

The sketches feature open space prominently, with a public square, garden, plaza and marketplace all included in many of the designs, with fewer buildings than were included in Redgate/Kane’s original proposal.  

No final sketch has been approved, but the committee is currently reviewing all eight options presented, and the designs continue to be tweaked and updated.  

“I think other people are excited about functions and generally think it’s going in a very smart direction,” said Russell Preston, Principle Group’s founder, during the meeting.  

Tensions with Team 

The development team has gone on record that they are not happy with the process, especially since the already-approved project seems to have little resemblance to what they were envisioning, outside of the renovation of the McIntyre Building itself. 

This has been a battle brewing for more than a year. Last March, the Redgate/Kane development team filed a lawsuit against the city claiming breach of contract, when a new City Council rejected a development agreement, one that was endorsed by the previous City Council just six months earlier. The lawsuit was suspended in April in favor of negotiations, but tensions continue.  

The development team was picked by the city in 2019 to redevelop the historic property at 80 Daniel St., with plans to turn the McIntyre Building and surrounding property into what it described at the time as a mixed-use project “creating lasting and significant benefits for the city and its residents.” 

The development team argues the city is headed towards insisting on design changes without consulting them. And any changes to the redevelopment plans would also need buy-in from the team, they said. 

Michael Kane, the president and CEO of Portsmouth-based The Kane Co., and Ralph Cox, a principal of Boston-based Redgate, sent a letter to Whalen in March letting them know their continued displeasure. 

“We are concerned that the accelerated ‘city schedule’ indicates that the subcommittee intends to take the position that it unilaterally has the right to insist on design changes—or even an entirely new design—reflected in sketches resulting from the public process, all of which contain none of the components of the existing, previously approved project other than the renovation of the McIntyre Building itself,” they wrote. “Pursuing any of these sketches would essentially take everything we have done and throw it away.” 

Furthermore, the developers believe the subcommittee is not considering the economics of what would go into the changes and call the schedule unrealistic.   

“Not only does this not allow sufficient time for the parties to agree on revisions acceptable to both sides and for us to design them, but it provides essentially no time for us to price those revisions so as to preserve our already agreed-upon return on invested capital,” the letter stated. 

The developers declined to comment for this story, but in prior letters to the city and public statements have characterized their investments in the project to date as “millions of dollars”.  

Still, both parties want the same thing for the most part – to redevelop the property and create something that the community can utilize and be happy with. But unless they can come to an agreement on a timeline and final design, things are going to be rocky come summer.