North Adams Redevelopment Authority Pays Lawsuit SettlementBy Tammy Daniels, iBerkshires Staff
10:11PM / Wednesday, January 27, 2016 | |
 The North Adams Redevelopment Authority has been able to settle an outstanding lawsuit brought against. |
NORTH ADAMS, Mass. — The Redevelopment Authority has finally settled a lawsuit with Freight Yard Pub.
Berkshire Bank has agreed to loan the authority $160,000 to make good a settlement agreed to last year with Bay State Hospitality Group LLC, the operating name of the restaurant in Western Gateway Heritage State Park.
Mayor Richard Alcombright had asked the City Council last August to back the borrowing because the Redevelopment Authority did not have enough revenue to take on the obligation. The council rejected the idea on the grounds taxpayers would be responsible for paying the loan if the authority could not.
On Wednesday, the three-person Redevelopment Authority Board agreed to commit to the unsecured loan as well as use $124,000 of its $157,000 operating funds to cover the settlement.
"We're hoping that with what's going on at the park, we can wipe this thing out," said Mayor Richard Alcombright, referring to a proposal to build a model railroad installation at the state park. Until then, he said, "We will have a revenue stream of about $4,000 a month with the remaining tenants and about $30,000 in the bank.
"It's not going to be easy, but we'll have to manage it and move forward. It's good to have it done."
The settlement comes from a lawsuit filed in 2011 by the restaurant, a tenant of Heritage State Park that the Redevelopment Authority oversees. Sean and Colleen Taylor, operating as Bay State Hospitality Group, sued over the loss of parking during the construction of the Hadley Overpass, a situation it said significantly cut into its revenue and forced it to take out loans to survive.
A jury found the authority responsible for a breach of covenant, dismissing five other complaints; the state Department of Transportation was initially named in the suit but later dropped. The city was not named as a party in the suit.
Bay State Hospitality will receive $285,671.21 by Feb. 1 in the form of a lump sum of $241,004.61 and $44,666.60 placed in escrow at Berkshire Bank. The amounts are slightly different from the original agreement.
The escrow account will cover the authority's loan payment for the first year, said City Solicitor John DeRosa. "We have some breathing room"
The $160,000 loan is fixed at 4.5 percent interest for 84 months (seven years) and is estimated at $2,224 a month.
The settlement acknowledges that there are ongoing claims because of a recent sprinkler system malfunction that flooded the pub and forced its closure for nearly a week. "The Parties do not wish to release each other for claims related to the Flood Event," the agreement states. DeRosa anticipated those claims would be covered by insurance.
In response to a question, Alcombright said the worst case outcome if the authority could not pay the loan is that the bank could resort to the courts. He did not believe that would occur, saying the bank "was very gracious" in providing the unsecured loan.
The mayor said settling the lawsuit was like getting rid of a dark cloud that's been hanging over efforts to privatize the languishing park. He and DeRosa indicated there could be some movement soon on the proposal by Thomas Krens to develop the park as an "extreme" model railroad venue.
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