SHARON ZONING BOARD OF APPEALS MINUTES OF MAY 28,2008

Special Meeting

A special meeting of the Town of Sharon Zoning Board of Appeals was held on Wednesday, May 28, 2008 at 8:00 P.M. in Room 604 at the Sharon High School. The following members were present: Kevin McCarville, Acting Chairman; Larry Okstein, Walter Newman, and Lee Wernick. Also, present was Richard Gelerman, Town Counsel.

Mr. McCarville opened the meeting at 8:05 P.M. The purpose of the meeting was to discuss the bonding process for' Sharon Commons.

Richard Gelerman, Town Counsel, asked that the board appoint one person who will be voting tonight along with Mr. McCarville and Mr. Okstein, as Mr. Lee is not present. It was determined that Mr. Newman would be the third voting member. Mr. Gelerman stated that Mr. McCarville, Mr. Okstein and Mr. Newman can vote even though these parties are not the same ones that voted the site plan approval.

Regarding the security, Mr. Gelerman that is a discretionary decision. Subdivision control says the applicant can decide which type of security they will post, but this application is not a subdivision, but a site plan. Therefore, the security type is at the Zoning Board's discretion. There are several types of bonding to consider: security interest in land; cash or effective cash known as a tripartite agreement; performance bond; letter of credit. Mr. Gelerman stated that again this is a discretionary decision for the board to make. His suggestion, as town counsel, would be an irrevocable stand-by letter of credit. In this case, a bank issues its letter of credit in favor of the town, which states if the Zoning Board certifies to the issuing financial institution that the work has not been timely done, the town will get the money. It is reliable and liquid. The only issue is the credit worthiness of the bank. The town can go into the financial institution and say here is a letter of credit and the bank will say here is a check issued by the bank. The decision needs to be based on the conditions of each particular matter. The board needs to look at what they are trying to protect against; i.e., environmental issues, site issues, etc. How secure is the project? It is the obligation of the issuing authority to issue that credit. The board needs to ask what are the conditions that warrant this type of bond?

Mr. McCarville stated what matters to the town is that should an issue arise at this site, we need to be able to set things right. People in this town are very concerned and it is this board's responsibility to protect the interest of the town.

Mr. Gelerman stated he doesn't think it is appropriate for this board to consider the security for the next phase and it would be an abuse to do so. Procedurally he feels this board if okay because they appointed a third party to vote. Mr. Houston stated we are asking for a security tonight because the board has authorized the proponent to clear the trees and shrubs off the site. This work has been authorized. The reason for the security is that we will allow the proponent to clear the entire site and also along Old Post Road in a limited way. Some of the land will be temporarily barren and we want to make sure that if there is a default, the site will be stabilized. The security will provide the town with enough funds to revegetate the site. That is all the security is intended to do.

Mr. Gelerman stated the Access Agreement and Indemnity Agreement will be signed by the board tonight.

Michael Intoccia stated he understands the board's concern, but going through town meeting from day one, they have a lot of cash commitments to meet. It is impossible to do both the security in cash and also to pay out their cash commitments. They agreed to bond this, but they didn't agree as to how. They are doing the site work. He has been in this town for twenty years and has never walked away from something. It is impossible.to come up with $800,000 in cash. They have spent a lot of money going into this, but to ask them to put up $800,000 in cash for three to four months, he feels says the board doesn't trust him. There are bonding companies that will allow them to go forward, but not cash. Now it comes down to the question on how this should be bonded.

SHARON ZONING BOARD OF APPEALS MINUTES OF MAY 28,2008 (2)

Special Meeting

Mr. McCarville stated this is an unsecured development with no folks lined up. Mr. Intoccia stated they are working on this. They are working on this with this board and other town boards. He asked what happens three months from now and they have to build something. They need to go forward now, but this wiil affect how they go forward. He has never let the town down once. He just wants to bond this like other towns.

Atty. Richard Rudman stated this is a serious matter for them - serious for the initial security and it is extremely serious for the security that needs to be posted in future. Depending on how the phasing works for the project, the security for larger amounts down the road could be has high as $6-7.5 million dollars, which would be about 5% of the budget for this project. If they are required to post cash or a letter of credit, the project has just gotten 5% smaller and will impact every decision they make.

Mr. Gelerman stated he really thinks it is an abuse of the board's discretion to do this tonight. If there is a question of assuring the applicant's financial bankers that in the future they need not be concerned with a letter of credit, they could put in the decision that tonight's action is based on the circumstances as they exist tonight and no one should read into that. This is clearly non-precedential. What we are trying to protect against right now could be different in the future.

Atty. Rudman stated he appreciates what Atty. Gelerman is trying to accomplish, but it doesn't work for them. They believe that from the beginning there were four kinds of securities and all would be acceptable to the town, just like a subdivision and they feel that is jvhat this board decided in December. They feel the board is changing the rules and they need to know that now as it has significant consequences. Mr. Newman stated he agrees with what Arty. Gelerman is saying, but unfortunately the scenario has changed for us dramatically. The applicant was on an upward slope, but it appears they are now on a downward glide. There is still no anchor tenant. From his perspective, the whole development has changed dramatically and has made us much more cautious. Given the economic condition of the times, it does change the scenario. Mr. Intoccia asked if he is saying that he would rather not see this built? Mr. Newman stated he is not saying that. Mr. Intoccia stated he said they would bond and they are ready to do that and they are also ready to have the tree cutter move forward. Every other town accepts the other bonds. He stated he feels the board is treating him like a stranger and they have done everything they said they would. He needs this board to work with him, not against him.

Mr. McCarville stated we have been very fair in our decisions for anyone that comes before us. If this project puts the town at risk, he would rather it not go forward as we need to protect the town. Mr. Wernick agrees with Mr. McCarville. He could see a change taking place. Mr. Okstein feels we should go with town counsel's recommendation of an irrevocable letter of credit right now. He is hoping this project goes forward. Mr. Intoccia asked if the board is going to ask for that exact amount of $880,000? He is not disturbing the entire area at once. Mr. Wernick asked what Mr. Houston thinks would be an appropriate amount. Mr. Houston stated the amount of security is proportionate to the areas being disturbed. Initially, they were going to do Phase 1 and 2. Mr. McCarville asked the time line for Phases 1 and 2 and if it is over a period of a year or two or a couple of months. Mr. Intoccia stated it could be six months. They will have the road up to grade and will have most of work that is bonded done in six months' time, as he needs to move on this before winter. Mr. Okstein asked if a Letter of Credit could be phased. Mr. Gelerman stated we could have a series of Letters of Credit by phases. He asked what would happen when they are done with one phase. Mr. Intoccia stated they would stabilize that particular phase and then move on to the next phase. Mr. McCarville asked who would say it is okay to go to the next phase? Mr, Gelerman asked if it were a 50-acre job, would they work on ten acres and then move on to the next? Mr. Intoccia stated they will go phases by phase. Mr. Houston stated if we are going to phase this, the contractor needs to finish a phase before moving on. Mr. Gelerman stated they would need to do a modification to the decision also. Mr. Houston stated the trees could be cut. The soil and stumps would be removed from Phase 1, the area stabilized, and then they would move onto Phase 2.

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Special Meeting

Mr. Intoccia stated they will do Phase 1, but they don't want to leave it open ended on the next phase. There is no way they can go forward with everything open-ended. Mr. Wernick believes we are totally non-precedential and we might feel better down the road when we see a tenant or two. Mr. Intoccia stated we can go forward tonight, tomorrow or Friday with the figure that Tom Houston comes up with. Atty. Rudman stated he would like to walk out of here tonight knowing we will not be back at this place again and that a good bond from a good surety company will be acceptable when they are doing work on South Main Street, when they have a building or two on the site, or any other future work. He doesn't think the board can do anything formal tonight, but they would like a sense that this is acceptable. It doesn't make sense to have an $880,000 Letter of Credit delay them. Atty. Gelerman stated the assurance is that the board's decision tonight is based on a unique set of circumstances, such as 1) what do you have for anchor tenants and 2) the nature of what we are trying to secure has an big community impact. Those things will not exist in the next phase. This is a very unique situation.

Atty. Shelmerdine stated he sees the financial security and the tenants as apples and oranges. Mr. Newman asked if the success of this project depends on the tenants? Atty. Shelmerdine stated yes, but what does the town not have? You will have security to do what needs to be done. Mr. Intoccia stated that half the trees are already cut on the site. If they went ahead on what they were going to do two years ago, they wouldn't need to put up a bond. Now it is changing. Mr. McCarville stated it changed when they changed the anchor and then lost it. You still can't tell us if you have anyone one lined up. He asked if Mr. Intoccia wants to make a motion to close? Mr. Intoccia said do what you want to do. Further, they can't put a $4-5 million dollar bond down the road.

Atty. Shelmerdine stated that the problem for them is that this is a financial undertaking. They have to approach this as ali encompassing going in. There was never a question on bonding. There is nothing in the decision that talks about the nature of the tenants or the viability of the project based on tenants. It is a backhanded.... Mr. McCarville stated we are trying to work with you. We want it to be successful just like you. He takes exception to the word "backhanded".

Mr. Okstein thinks we should phase this as that would be a fair compromise. They could phase as they go. Mr. Intoccia stated they are willing to put up the $800,000 in a Letter of Credit; but, when they do bonding down the road, they won't have $6-7 million dollars. Mr. McCarville stated we can't predict what we don't know. Mr. Okstein stated there is a potential for an adverse impact on the community. Atty. Rudman stated the rules for this project changed because of the lack of tenants and the economy. It was an accommodation to allow the developer to phase this.

Dean Spertoli, President, Congress Street: the level of cooperation in this town is phenomenal. He has never worked in a town or city that has been so cooperative. The market has been tough and they have been in a battle for tenants since the first of the year. They have some letters of intent out there, but they cannot put the names out there yet. They are behind the leasing schedule. This is the first time he has been asked to post a Letter of Credit and they are hard to obtain. A million dollars is a lot of money, but it is diminimus in light of everything else. Mr. Okstein stated that down the road there can be a totally situation. Mr. Spertoli stated the board has a fiduciary obligation to the town and he has one to his client. He cannot move forward if there is any expectation of doing this in the future. Mr. McCarville asked why they think the board will not work with them. We need to meet in the middle if this is going to work. When this phase is done, you should come back. Mr. Okstein stated this is their option; we will be willing to phase. Atty. Shelmerdine asked if it is just a vote or a crafted decision. Atty. Gelerman stated it will only change if you want us to phase the bond. Atty. Shelmerdine stated they just need the form of the $880,000. There should be no further written decision that needs to go forward. Mr. Spertoli asked if the board is locked in on a Letter of Credit and Mr. McCarville stated yes. Mr. Spertoli stated the issue is do we post $400,000 or $800,000. The difference is possibly $600,000.

Mr. Intoccia asked to close the hearing.