Photo courtesy of Principle Group

City officials in Portsmouth have reached a deal with developer Redgate/Kane to close a contentious chapter in the history of the city’s downtown.  

The joint venture between Boston’s Redgate and Portsmouth firm The Kane Co. sued the city earlier this year over two years of efforts by former Mayor Rick Becksted and several former city councilors to oust it from a project to redevelop a former federal building downtown, known as the McIntyre site. 

The Portsmouth Herald reports pressure from the federal General Services Administration, which owns the building, was instrumental in forcing the city to cave. The city is seeking to buy the landmarked modernist building for $1 under a federal historic preservation program.  

The paper reports city officials are asking the GSA for an extension to help them and Redgate/Kane revise an earlier development plan to include less housing and “market shed” structure in a new public square. The concept emerged last year during charettes held by Principle Group, consultants hired by Becksted to craft a new plan for the McIntyre project. 

In exchange, the city will pay Redgate/Kane $2 million to compensate for parts of the development program that will be scrapped as part of the new plan.