NORTH ADAMS, Mass. — A financially shaky Redevelopment Authority has agreed to reduce the rent for the Freight Yard Pub to keep funds flowing to manage its debt.
The restaurant began witholding rent this past spring until the authority addressed what it claimed were poor conditions in Western Gateway Heritage State Park.
Mayor Richard Alcombright recommended an amended agreement effective Nov. 1, 2017, that would reduce the rent from $4,000 a month to $2,500 beginning in October, pending the restaurant pay the back rent being held in escrow. The amendment also allows the restaurant to terminate the lease at any time upon 60 days notice, with rent being paid through the last two months.
"We're reducing the rent as a settlement toward some of the issues that they had and also so that we can derive revenue that will help us keep our loan obligation current," the mayor said. "I think we'll have sufficient rent to minimally maintain the park but, most importantly, keep our obligation current at the Berkshire Bank. We don't want to do anything to jeopardize that."
The mayor said the agreement had been hashed between the attorneys for both sides. The amount in escrow was $25,875, which should come back to the cash-strapped Redevelopment Authority.
"I will not execute this unless the rent is current," the mayor said. "We may want to hold off execution of this until the very end of the month so that when this comes through, it comes through with the December rent also."
The authority has to begin making payments of about $2,200 a month on a $160,000 loan taken out from Berkshire Bank to settle a lawsuit the restaurant, as Bay State Hospitality Group, won against it for parking issues in 2015.
The park doesn't have many tenants and some have moved or are in the process of relocating to make way for the proposed extreme model railroad museum. The Thomas Krens-lead group took out an option to buy the park and the adjacent Sons of Italy for $1.2 million earlier this year.
The mayor said the museum will be paying $1,500 a month for the offices it occupies in the park (beginning in January) and there is another tenant paying $600. Cold Spring Coffee Roasters will be moving to the Norad Mill but is still in the park at $450 a month.
"The Redevelopment Authority is in a very cash sensitive position," Alcombright said in response to questions about the reduction setting a precedent. "I don't want to leave a bankrupt situation into the next administration. I think we're going to be able to provide some cash and an adequate income stream, should the tenants pay their rent."
He said disputed items from Freight Yard's lengthy list were not addressed as they were not the authority's responsibilities.
"The list seemed dramatic, there were a lot of items on there. Many, many of them had nothing to do with their operation of the building," said Building Inspector William Meranti. "Many are their responsibility through the lease and the ones that we were able to take care of, we have."
That includes having a contractor come in to repair gutters now that the awnings are down, and fixing pavers that were a trip hazard. A number of exterior lights have also been fixed or are awaiting parts to be repaired.
The mayor was careful to say his recommendations were only up to the end of December. The city will have a new mayor, Thomas Bernard, on Jan. 1. Bernard attended the meeting but didn't say anything.
The authority's vice chairman, Michael Leary, however, wanted to know what would prevent the restaurant from withholding rent yet again, as it did during the lawsuit.
"I'm a little bit irritated that we had to go this route to begin with and if this happens four, five months from now and we end up in the same situation, we have no mechanism other than locking the door," he said.
Alcombright agreed that "we've had issues over the years, honestly this would be in my mind, from my perspective, the Redevelopment Authority's last forbearance."
"I'm going to say as a member of the board, if this happens again, I'm going to vote to lock that door," Leary replied.
In other business, the authority approved an application by Gary Fuls to operate a real estate office at the Holiday Inn.
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