Redgate-Kane resumes lawsuit against City of Portsmouth

Portsmouth NH

25 October, 2021

2:01 PM

Description

The Kane Company announced today that a partnership created to redevelop the McIntyre site into a dynamic, community-oriented, mixed-use project has filed a motion in Rockingham Superior Court to remove an April 2020 stay that was issued in the partnership’s lawsuit against the City of Portsmouth and proceed with the litigation. The action means development partners Redgate-Kane will move forward and pursue relief and damages against the City for its breaching of a binding agreement and failure to act in good faith during negotiations over re-design of the McIntyre project – a planned redevelopment of downtown property that requires approval of the National Park Service. “The Portsmouth City Council has done a disservice to this community with its actions, its indifference, and its complete failure to act in the best interests of Portsmouth,” said Michael Kane, President and CEO of The Kane Company. “The Council’s reckless decision to breach our agreement has been compounded over the past 18 months by their disregard for the deep commitment of Redgate Kane to redevelopment of downtown Portsmouth. Regrettably, resuming this litigation is our only recourse.” In March 2020, Redgate-Kane filed suit against the City after the current City Council breached a binding agreement between the City and Redgate-Kane to develop the McIntyre project. The City Council had voted to reject a ground lease that was based on the project design approved by the prior City Council. In April 2020 Redgate-Kane agreed to stay the lawsuit while the parties negotiated in good faith to achieve resolution on changes to the existing project acceptable to both sides. Redgate-Kane filed documents with the court on Tuesday, October 19 to lift that stay. The partnership seeks the profits it would have received under the development agreement. “The City Council has betrayed every stakeholder in the future of the McIntyre site and the redevelopment of downtown Portsmouth,” Mr. Kane said. “They broke our original binding agreement that was based on our original design. And they refused to honor the terms we negotiated to contemplate a redesign of the project.” Among the agreed upon terms reached during negotiations since April 2020: any design changes to the McIntyre project would be economically neutral to Redgate-Kane; and a public review process would evaluate changes that only involved removing one of two buildings from the design. Over Redgate-Kane’s objection, however, the public process produced a completely new “preferred design concept” for the McIntyre project – including major design elements previously rejected by the National Park Service. “Unfortunately, the McIntyre Sub Committee never informed our development team of their departure from the agreed upon direction and never included us in their design process,” Mr. Kane said. “Additionally, the Sub Committee and their urban planner never consulted the body of information that the Developer had produced in the two plus years of design.” Redgate-Kane nonetheless was and is still willing to proceed with the City’s new design on terms contained in a “Project Restart Agreement” presented to the City in September based on negotiations with the McIntyre Sub Committee. Although the Sub Committee had led Redgate-Kane to believe those terms were acceptable to the City, the City’s failure and refusal even to respond to the proposed Project Restart Agreement led Redgate-Kane back to court.