$4M Difference of Opinion on Lowell High Costs
LOWELL -- The city and doctors whose offices are at 75 Arcand Drive appear to have a roughly $4 million difference of opinion when it comes to what it will cost for the city to take the office space by eminent domain for the Lowell High School project.
The city’s consultants are estimating about $7 million when it comes to the combined value of the downtown Lowell real-estate and required relocation costs. The doctors’ consultants are estimating costs in the $11 million range, the attorney for the doctors wrote to the city solicitor ahead of Tuesday’s City Council meeting.
The council on Tuesday referred the $2.6 million loan order for the city to acquire 75 Arcand Drive to an October public hearing.
“It appears that the city is not disclosing to the citizens of Lowell that there is a separate relocation estimate for my clients which at a minimum, drives this number to at least $7,100,000 and that estimate comes from the city’s own relocation consultant,” Peter Flynn, lawyer for the six doctors, wrote to the city solicitor on Tuesday.
“Our consultants just on a preliminary basis, are estimating the combined value of the real estate with the required relocation allocation to be in the $11,000,000 range,” he added.
In the wake of this letter from Flynn, City Councilor Rita Mercier -- who has adamantly opposed taking 75 Arcand Drive away from the well-established doctors -- peppered City Manager Eileen Donoghue with questions about the estimates.
Mercier said the city is not disclosing the separate relocation estimate, bringing the number to at least $7.1 million, she said.
The $3.5 million to $4.5 million relocation estimate was reported in The Sun last week. That estimate is from the working relocation draft plan for the Lowell High School project, prepared by Peter W. Sleeper Associates in Arlington.
That’s based on experience with similar relocation programs and these types of businesses, the plan reads.
“We provided counsel with the draft plan,” Donoghue said Tuesday. “The plan has not been finalized. This is a work-in progress.”
Mercier pointed to the difference between the city’s and doctor’s total costs -- in the $4 million ballpark.
“That’s what they’re alleging, yes,” Donoghue said about the doctor’s consultants.
Donoghue said she hopes the relocation plan will be finalized in the next few weeks.
The eminent-domain land acquisition order requires a two-thirds vote, or six of the nine Lowell city councilors. That’s expected with seven of the councilors campaigning as downtown high school supporters.
This vote is necessary for the high school project, according to Massachusetts School Building Authority Executive Director John McCarthy.
In the board’s action letter to Lowell in June, McCarthy stressed that MSBA’s vote to proceed into schematic design was, “contingent upon the city gaining full ownership, control, and exclusive use of the entire site, including the adjacent property by eminent domain.”
The state will not compensate the costs associated with the eminent-domain land taking and the relocation of the affected tenants. Funding for this will come from the city, specifically via bonds.
“Whatever numbers being discussed tonight with the city taxpayers should come with the clear understanding that the city will be paying that amount, somewhere between $7,100,000 and $11,000,000 plus, and not the MSBA,” Flynn wrote to the city solicitor on Tuesday.
“Project delays in the form of any challenge to the taking will cost the city approximately 1.5% per month based upon project costs,” he later added. “That amount with a $300,000,000 - $400,000,000 project is staggering.”
City Councilor Jim Milinazzo pushed back against that 1.5 percent claim at the meeting.
“It’s not going to cost us that from eminent domain,” he said.
“I don’t expect any delays whatsoever,” Milinazzo added.
The owners of the medical building can challenge the $2.6 million assessment from the city, resulting in litigation, but that will not stop the high school process, officials have said.
The city solicitor recently sent a letter to the attorney for the doctors with the city’s $2.6 million offer.
It was recently appraised at that figure, according to City Solicitor Christine O’Connor.
According to the city’s database, the current assessment of 75 Arcand Drive is $947,400: a building value of $705,900, and a land value of $241,500. The two-story 13,743-square-foot office building sits on a 62,293-square-foot property.
The relocation draft plan lists nearly two dozen properties for lease across Lowell.
None of them are suitable for the six doctors, Flynn said last week.
The doctors at 75 Arcand Drive are: Dr. Evan Coravos, Dr. Stephen Reichheld, Dr. Christopher Ross, Dr. Michael Szarek, Dr. Aaron Watman and Dr. George Montminy.
The vote to send the loan order to a public hearing was 8-0-1. Mercier was the lone “present” vote.
Follow Rick Sobey on Twitter @rsobeyLSun.