PORTLAND — The dispute over the validity of the sales contract for the Somerset Street land slated to become the Midtown project continues, with the city and developers at odds about when the land will be cleaned up.
Federated Cos. principal Jonathan Cox on Tuesday said his company believes it has a valid contract to buy 3.44 acres on Somerset Street in Bayside, extending two elongated blocks between Pearl and Chestnut streets.
City Economic Development Director Greg Mitchell on Monday said the city determined the contract is void because Federated did not meet conditions, including consummating the deal within 30 days after any appeals of the planning process were completed.
Cox countered the city has not met its obligation to clean up the land so Federated could obtain permits and begin construction.
An amendment to the original 2012 sales agreement was approved by city councilors on Sept. 15, 2014. The amendment expanded the amount of city-owned land to be sold, and specifically transferred responsibility to the city for cleaning up the industrial property.
It also specifically required the city to clean up the area while the Midtown project was still contested in court by local abutters, who sued the city in February 2014.
The lawsuit was eventually settled out of court after the developers scaled down the project. The second iteration was approved by the Planning Board in March and called for 440 housing units and 91,500 feet of retail space.
Mitchell confirmed the city has not removed contaminated soil, but has a voluntary remediation plan ready to go.
“We worked directly with (the Department of Environmental Protection) on this,” Mitchell said. “We had it worked out in advance, but we didn’t know the actual footprint.”
Mitchell said the unanswered questions are critical to implementing the final plan because they will determine how much soil will have to be removed.
Cox said the company has provided information necessary for the city to go ahead with the cleanup.
“The city’s representation they are waiting on us is unfounded and the obligation to remediate has always been with them,” he said. “When the city remediates, we are prepared to close. Until then, we have no interest in taking title on a piece of land that is environmentally contaminated.”
The contention over contamination is the latest development in a simmering dispute that boiled over when project manager Patrick Venne asked city officials on May 20 about converting two of the four proposed buildings to hotels.
On June 18, Mitchell responded, saying the change of use would require another Planning Board approval. He then cited the amendment to the sales agreement to say the contract had expired.
“We are more or less status quo in terms of the sales agreement,” Venne said Aug. 6.
If consummated, the sale would bring $2.27 million, according to city data. The city would also be required to construct a $9 million parking garage and has authorized $700,000 in bonds to pay for elevating Somerset Street above the projected flood plain in the two-block stretch.
Federated would also pay $1.33 million of the street elevation cost.
City-owned Somerset Street property in Portland, intended to be sold to Federated Cos. for the Midtown project, had not been remediated Aug. 10, although the sales contract considered void by the city required a city cleanup before the sale could be completed.