Portsmouth Residents Sue City for Rejecting Developer

Image courtesy of Redgate/Kane

A group of Portsmouth residents has filed suit against the city, claiming a narrow City Council vote last year to abandon a deal with a controversial development team broke the state Right to Know law. 

Former City Councilor Doug Roberts is among the group that filed the suit. They claim a Nov. 18 vote to terminate a development agreement with the team the city had selected to redevelop a former downtown federal building was not properly advertised to the public.  

The council and development team Redgate/Kane had been embroiled in a nasty public and legal battle over how to turn the 2-acre McIntyre Federal Building site into a viable, mixed-use property. The city, under a previous mayor and council, had selected Redgate/Kane and signed an agreement giving the team the right to redevelop the property, which the city was expected to receive via the National Park Service. 

Many of the councilors who voted to terminate that agreement last fall had won election in 2019 riding a wave of opposition to the density included in the Redgate/Kane plan. When the council then voted down a ground-lease agreement with the team in early 2020, the developers sued the city for breach of contract. That suit is still ongoing after being paused for several months last year so the parties could negotiate. During that pause, the City Council brought in architectural consultants who held community workshops and developed a scaled-back plan for the McIntyre site, eliciting strong protests from Redgage/Kane. 

This legal fracas helped unseat former Mayor Rick Bedstead many of the councilors who opposed the Redgate/Kane project in last November’s municipal elections, which took place two weeks before the Nov. 18 vote that’s the subject of the latest lawsuit but before the winners were sworn in. 

The City Council agenda for that meeting noted the council would be entering into a non-public session to discuss the McIntyre lawsuit, but the residents now suing the city say that notification would not have let the public know the councilors might take such a drastic step as to terminate the development agreement. 

“They severed a multi-million dollar contractual relationship that was already the subject of litigation. The contract was terminated under an agenda that misled about the nature of the meeting,” the lawsuit states. “The public was left out at a crucial point on an issue that has been discussed for a decade, and the city [was] exposed to additional legal expenses and potential damages.” 

The lawsuit asks a Rockingham County Superior Court judge to invalidate the Nov. 18, 2021 vote. A hearing is scheduled for Feb. 22. 

Redgate/Kane recently entered into settlement talks with the city, the Portsmouth Herald reported. The development team, a combination of Boston developer Redgate and local firm The Kane Co., has not said if it is still interested in the project.