By DONNA KENNY KIRWAN

PAWTUCKET — Fed up by years of inactivity, the City Council voted unanimously Wednesday night to start the legal process to take back a waterfront parcel of land on Division Street where a hotel has long been promised.

By a 7 to 0 vote, the City Council passed a resolution authorizing Mayor James E. Doyle, on behalf of the city, to execute an  affidavit to be recorded in land evidence stating that the developer, Carpionato Properties, has failed to complete a 100-room hotel within a stated 48-month period. The process will allow for a so-called “reverter clause” to take effect that will cause the ownership of the land to the City of Pawtucket.
The City of Pawtucket obtained the former General Motors property on Division Street, containing approximately 325,024-square feet in 1999 through eminent domain.
After reviewing several proposals, the Properties Committee of the City Council accepted the proposal of Manhattan Hotel Development, LLC and Carpionato Properties on Aug.6, 2003.
The property was conveyed to the Johnston, RI-based Carpionato Properties, through Division Street Hotel LLC, for just $1 on May 5, 2004.
The Pawtucket City Council authorized changes to the Property Disposition Agreement on April 12, 2005, including an extension of time to complete to first phase of the project (100 hotel rooms and a restaurant) from 36 months to 48 months after the transfer of the deed.
A quitclaim deed transferred the property from the City of Pawtucket to Division Street Hotel LLC on July 8, 2005. The hotel had a deadline to complete the hotel on or before July 7, 2009.
Despite some land clearing and other site work and a sign showing an architect's rendering, the hotel is no closer to being a reality than it was over four years ago. As such, Doyle  instructed the city council to take action to have the land returned to the city so alternative development plans can be explored.
R. Kelly Sheridan, the attorney handling the case for the city, told the city council that Carpionato had  requested an extension of time on the agreement, citing current economic conditions that would make it difficult to get financing for a hotel project. However, Sheridan recommended to the council that this request be rejected. He recommended instead that the mayor issue an affidavit that will allow the property to revert back to the city based on “a long history of non-compliance.”

Councilor Jean Philippe Barros raised a concern about a reported $1.6 million in site work that a spokesman for Carpionato claims has already been invested. However, Sheridan said that beyond some land clearing and the construction of a retaining wall, he has not seen any documentation proving that $1.6 million has been spent.

Further, Sheridan said, in the initial agreement that was drafted, it was spelled out that the city was not required to compensate the developer for any improvements made to the site. He admitted that he could not rule out a possible lawsuit, but said the language in the reverter clause clearly states that if the hotel wasn't 100 percent complete by the July deadline, the mayor could file an affidavit and take the title back on the property.

In response to a question by Councilor Albert J. Vitali if the city's action could be paving the way to a lengthy legal battle with Carpionato, Sheridan reiterated that the documentation was clear that the developer was not due any compensation for the site work. While saying again that he could not rule out any legal actions by Carpionato, Sheridan asked, “What is the alternative? I must recommend that we take the title back. We can't let Carpionato tie up the property in perpetuity with a series of delays.”

Councilor David Moran, agreed, saying “enough is enough. We have to move on and market this property for something else.”

Councilor Thomas Hodge said that while he had initially voted for Carpionato to develop the site, he now thinks the company “has treated Pawtucket like a poor sister. He noted that the Riverfront Commission has completed a study that puts the Division Street property as its centerpiece, and said that, despite the possibility of a lawsuit, “We need to get something positive on that land.”

Councilor John Barry III agreed, noting that back in 2004, when the developer had asked for an extension, the company's attorney had told the council that it had a $15 million line of credit and wouldn't need financing for the hotel project.

Council President Henry Kinch Jr. said he personally knows the two principals involved in the Carpionato Corporation and considers the firm to be “a top-notch developer.” However, he, too, agreed that “this project has become a joke. It's no closer to being hotel now than in 2004.”

Kinch added that, given the traffic patterns and present configuration of Division Street, he is not so sure that a hotel is even the best use of the site.  He suggested that the property would be better suited to office/retail space or perhaps residential development.

Sheridan said that the next step is to have the mayor file an affidavit that will be recorded in land evidence. The title for the property would then revert back to the city.

When reached on Thursday, Tom Moses, an attorney for Carpionato Properties Inc., expressed disappointment in the council's decision, calling it “unjust.”  He added, “My client will be filing suit against the city.”

Moses said that as part of the agreement, the city was required to “not unreasonably withhold an extension”and said that his client's argument, that the current economy makes it impossible to finance a the hotel project now, is a sound one.

Moses also said the Carpionato Properties has spent $1.6 million on demolition, utilities and site work on the property “that the city would now benefit from.”

Sheridan countered that, prior to its recently seeking an extension based on the poor economy,  Carpionato Properties gave the city no reason why they did not begin construction on the hotel from July of 2005 through the fourth quarter of 2008, before the financial market had collapsed. He also said he has seen no documentation as to the investment of $1.6 million on the site.
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