The Planning Board hammered out a possible payment solution for Duxbury Estates, LLC Monday night, after several public hearings on the matter.
Planning Board Chairman George Wadsworth opened the discussion with a summary of his recent meeting with Tom Giacchetto, owner of Duxbury Estates, LLC, Bob Galvin, Giacchetto’s lawyer, Tom Broad- rick and Rockland Trust, with whom Giachetto has a loan for the project.
“It was a very interesting meeting,” Wadsworth said.
Wadsworth said he learned that the original bank, Commerce Bank, had a requirement to set aside money to pay for the payments that were on the payment plan. Part of their deal with Giacchetto was to have that money set aside for the town. The new bank, Rockland Trust, does not have that requirement on their loan with Giacchetto. Because of this, no money was set aside to help Giacchetto save up for required payments to the town.
“The market, as we all know, was terrible at the time,” Wadsworth said. “He certainly couldn’t sell [the units] at the price he needed to sell them at."
At the meeting, Wadsworth said he told the bank the project needed a “money-man.”
“They need someone on a white horse to come in and provide him with $270,000,” he said. “$270,000 would not require any decision by ourselves and would give him enough permits to pay off, we think, all the loan that is outstanding there.”
Wadsworth said that, because Giacchetto does not have a moneyman, the bank would have to take up that position. He urged the bank to see whether they could front the $270,000 for Giacchetto, to bring him up to a point where his underlying note is paid for.
“I think one of the interesting conversations was that the problem they had in doing that, the reason they didn’t have any set aside money, was because the leverage was a lit- tle scary to them,” Wadsworth said. “They were worried about this loan. They have a good relationship with them, but they wanted every penny they could get because they were concerned about whether the value was going to be there.”
Wadsworth said he believes the Planning Board should also be concerned about the leverage, something many members of the board have expressed concern with over the course of the public hearings.
“We are adding to the risk to the town,” Wadsworth said.
Broadrick talked to town counsel Kevin Batt on Monday and learned that any new payment plan for Duxbury Estates, LLC, must be attached to the issuance of new building permits, not the sale of individual units, according to the town bylaw. The only wiggle room the board has is to try to balance out payments from the first permit through the 36th permit, which is the 80-percent completion mark, which is the point at which the project must be paid off, ac- cording to the bylaw. By that 80-percent mark, the town must have received $1.3 million.
Each of the 36 permits must cost an equal amount in order to reach $1.3 million by the 36th permit. The flexibility for the board is the ability to determine when they would require Giacchetto to pay for a certain amoutn of permits. For example, the board could issue three permits and not require paymnet for those three permits until before the issuance of the fourth permit. Another option would be to issue one permit at a time and require Giacchetto to pay per permit.
Giacchetto said working permit by permit would seriously slow down the project, would lengthen the life of his loan and would ultimately not give the town the money they need in the time they need it.
The solution the board came up with was to ask the bank to make the same type of deal with the loan as the previ- ous bank had, by putting aside $25,000 out of the sale of every unit to be paid directly to the town for the Affordable Housing Trust. The board will issue permits 22 through 31 to Giacchetto and through those 10 permits will receive $250,000 towards the $1.3 million they are owed. Each of the permits from numbers 32 through 36 will cost $193,000. Combined with the $135,000 initially paid by Giacchetto at the start of the project, the town should receive the correct amount of money by the 36th permit.
The plan is subject to town counsel approval and a signed letter by Rockland Trust, agreeing to the new loan plan.