MIDDLETOWN -- Informed of elevated soil-contamination levels in the Anchorage property, town officials said the Navy and GMH Military Housing aren't acting in good faith.
In the latest maneuver surrounding the sale of the Anchorage property, the town voted on Tuesday to hire lawyers from Hinckley, Allen & Snyder to review several areas where officials say they've been slighted.
After the state Department of Environmental Management informed Church Community Housing Corporation about elevated soil contamination in the development, town officials asked GMH to reduce the price on the 28-acre property off Coddington Highway.
"If they don't want to have to deal with it, they don't have to buy it," said GMH regional manager Robert Rulli.
Town officials cried foul.
"He said the Navy was delivering a clean site and that environmentals were not a concern," said Town Council vice president Charles Vaillancourt.
Officials allege that GMH knew about the contamination all along. Remediation, if necessary, could cost millions of dollars.
Rulli said GMH always suggested that the property would be purchased "as is, where is."
Town officials said both GMH and the Navy have behaved unfairly. A month earlier, the Navy, citing jurisdictional issues, backed out of policing the Anchorage property, leaving the town to shoulder the extra costs of patrols and emergency services for the area.
Specializing in jurisdictional issues, the legal team will assist the town in its fight to receive assistance with those emergency services and ensure that the town is represented as negotiations continue.
"We felt we were getting nowhere quickly with GMH," Vaillancourt said.
Robert Flanders, a former state Supreme Court justice, will act as the town's lead lawyer. The council set aside $15,000 from its undesignated fund balance to cover legal fees.
Since April, GMH and Church Community had participated in exclusive talks, with Church Community agreeing to buy the site for $14.9 million in June.
In August, Church Community, a local nonprofit housing group, and GMH agreed that GMH would provide the town a portion of the Navy's sewer allotment, as well as $924,000 a year for emergency services to the Anchorage, Coddington Cove, and Green Lane properties.
GMH, in a $500-million deal nearly one year ago, bought property from the Navy, affecting 5,600 units along the East Coast, including 1,350 on Aquidneck Island.
The military-housing company plans to sell 300 units on the Anchorage property and demolish 90. Church Community Housing intended to buy those units and develop 162 market-rate and affordable-housing units, along with eight commercial properties.
Talks stumbled last week over the town's demands that GMH provide a capital contribution for a new public-safety facility to better serve Anchorage residents. Town officials had hoped to use the former Navy lodge for the new building, and contend that the Navy at one point agreed to turn the property over to the town.
When the Navy informed the town that the lodge would not be transferred, the town asked GMH to contribute toward building a new emergency-services center.
"That's unacceptable, I don't know why we should be asked to do that," Rulli said.
GMH last week said it would begin marketing the property to other interested buyers.
Town Councilman Louis DiPalma said it's too early to determine what level of remediation is necessary, if any. Even with elevated contamination levels, the Navy-owned property may be in compliance with U.S. Environmental Protection Agency guidelines, but state guidelines are more stringent, he said.
Rulli said the contamination levels in the Anchorage property are news to him. GMH turned over all the environmental reports it had when negotiations began, and was not informed of any soil contamination.
Besides, the soil throughout the island contains natural traces of arsenic, so a presence of the element on the Anchorage development doesn't necessarily mean the development is unsafe.
"It hasn't been determined whether it has to be cleaned or not," Rulli said.
Church Community had every opportunity to have the soil levels checked during the negotiations, he said. Remediation, if necessary, is its option if the organization chose to buy the property.
"That's the cost of development," Rulli said.
News of possible soil contamination hasn't frightened away other interested buyers, he said.
"I'm not forcing them to buy this property," Rulli said.
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