Opinion ID: 204058
Heading Depth: 2
Heading Rank: 2

Heading: The Town Assigns Its ROFR to TPL

Text: Within days of signing her agreement with Cohousing, Kunelius provided notice to the Town, and other parties required to be notified by statute, of her intent to sell all of her 50.67 acres. Spearheaded by a group known as the Friends of Red Acre (FORA), which included many of Kunelius's immediate neighbors on Red Acre Road, opposition to the proposed co-housing development sprouted quickly. This opposition eventually focused on alleged excess costs the Town would have to bear as the result of the co-housing development. Urging that the Town exercise its ROFR was one of the principal arrows in the opposition's quiver. By December 2002, FORA proposed an alternative to the Cohousing's proposed development. The FORA plan provided that the Town would contribute $100,000 from Community Preservation Act funds and $300,000 from general town funds, as well as assign its ROFR to a non-profit conservation group. Additional funds would be raised by selling both homes on the property as affordable housing, and selling the horse farm operations to Eye of the Storm, a non-profit equine rescue organization. (These proposed sales contemplated relief from various zoning regulations). All of the remaining purchase price funding was to come through private donations. The Trust for Public Land was identified as the non-profit conservation organization most likely to accept assignment of the Town's ROFR. TPL expressed a strong interest in accepting the assignment, but only if certain conditions were met. Those conditions included the Town's appropriating $400,000 to support the project, FORA and others raising the $22,000 in required deposits under Kunelius's contract with Cohousing, TPL determining that the project was feasible, and its governing board approving the assignment. On January 13, 2003, the Town decided to borrow and appropriate $305,000 from its general funds to support the Town's exercise of the ROFR. (The remaining $95,000 was to come from Community Preservation Act funds). But because the Town wished to exempt the borrowing from the limitations of Proposition 2, see Mass. Gen. Laws ch. 59 21C, the vote was tentative, pending confirmation in a Special Town Election. By a vote of 515 to 355, however, Stow voters declined to approve the project. Undaunted, FORA and the Trust pushed ahead and convinced the Town to extend consideration of the ROFR to the full 120-day period specified in the statute. During that time, Craig McDonnell, the TPL project manager for this transaction, prepared a lengthy Project Fact Sheet to brief TPL's governing board on the project and assist the board in arriving at a decision about how to proceed. In this document, McDonnell explained that Kunelius was planning to deed most of forest acres to the Town free of charge, but that TPL's involvement in the project would result in the conservation of three additional acres and provide the Town access to a pond on the 8.57 acres that Cohousing was planning to develop for fire suppression purposes. As to the financing and risks of the proposal, McDonnell noted that with the failure of the appropriation, TPL would have to accept the assignment before the Town could replace the defeated $300,000 appropriation with additional Community Preservation Act funds, but that this risk was mitigated by the fact that he believed that TPL's exposure was limited to liquidated damages in the amount of $22,000, as provided in the contract between Kunelius and Cohousing. (Concomitantly, with this candid private assessment of TPL's obligations and exposure with respect to this transaction, McDonnell publicly made disparaging statements about developers and touted TPL's commitment to complete the transaction and make Kunelius whole.) McDonnell further noted that Kunelius was upset at the prospect of the Town assigning its ROFR to the Trust. He suggested, however, that the litigation risk was minimal due to the clarity of the liquidated damages clause, and he predicted that the Trust would prevail on summary judgment after minimal discovery in any suit brought by Kunelius. Eventually, TPL's governing board approved the acceptance of the assignment, but the board nonetheless withheld authority for TPL to close on the transaction. Armed with this limited authority, McDonnell went ahead with efforts to acquire an assignment of the ROFR. Without disclosing to the Town the constraints placed on TPL, McDonnell negotiated with the Town's Board of Selectmen regarding the terms under which TPL would accept the assignment. By and large, the negotiations did not reflect significant disagreement between the Town and TPL, although TPL refused to indemnify the Town for potential damages or defense costs in the event of potential litigation. TPL did acknowledge that the decided cases under Chapter 61 do not explicitly resolve all of the potential issues that arise when a municipality assigns its right of first refusal to a nonprofit conservation organization, including which terms of the underlying contract should obligate the assignee. At a Board of Selectmen meeting on February 11, 2003, [2] days before the Town's ROFR was scheduled to lapse, the Town assigned the ROFR to the Trust on the terms described above. At the meeting, McDonnell gave a presentation describing the benefits of the transaction and urged approval of the assignment, but McDonnell did not disclose the conditions that the Trust's governing board placed on its acceptance of the assignment. By a vote of three to one, the Town's Board of Selectmen voted to assign the ROFR to the Trust, which the Trust accepted in writing the next day. In due course, Kunelius was provided with written notice that the Town had assigned the ROFR to the Trust, which provided notice of its acceptance.