Some town officials say a bill sponsored by the House Majority Leader from Providence would have stripped local boards of control.

01:11 AM EST on Sunday, March 13, 2005

BY STEVE PEOPLES
Journal Staff Writer

PORTSMOUTH -- The small group gathered on the waterfront for a tour of the proposed $100-million development.

In attendance were Democratic legislators representing Aquidneck Island districts -- Senate Majority Leader M. Teresa Paiva Weed, Sen. Charles Levesque and Representatives Raymond Gallison and Amy Rice.

Just one Portsmouth town official, Council President Mary Anne Edwards, had been notified. She was invited the day before.

"I don't know what the purpose of the tour was, to be honest," Edwards said later of the Feb. 4 gathering. "I don't know why we were there."

A representative of O'Neill Property Group, a Pennylvania company under contract to develop 150 acres along Portsmouth's western shore, led the tour along one of the state's last waterfronts available for development.

About an hour into the tour, House Majority Leader Gordon Fox, of Providence, arrived.

"It raised my eyebrows up 10 feet," Edwards said. "I don't know why he was there."

Two weeks later, Fox introduced House Bill 5688.

Gallison, Rice and Rep. John Loughlin, a Tiverton Republican, had signed on as co-sponsors.

The bill provides a streamlined permitting process for the waterfront development and gives control of the project to a state commission.

No Portsmouth town official had asked for the legislation.

"It's one-stop shopping for permitting," Portsmouth's Edwards said. 'I'm so mystified by it. I don't know where the bill came from -- or who even told these [legislators] to do this. I certainly had nothing to do with it . . . It's confusing; it's confounding. Where's the pressure coming from?"

The Journal began looking at the bill last week, interviewiing lawmakers and O'Neill representatives. Fox was questioned Thursday afternoon. Hours later, the bill was pulled.

"People, for their own political reasons, decided to make this more than what it was," Gallison said Friday morning. To quiet the critics, he asked Fox to withdraw the bill.

Gallison hopes to reintroduce it as an amended bill later in the session.

O'NEILL PROPERTIES Group emerged as a player in Rhode Island's coastal development last year when it paid $12 million for the 220-foot building put up decades ago by the former Kaiser Aluminum. British entrepreneur Peter de Savary, who developed the luxury Carnegie Abbey golf club nearby, had intended to construct condominums in the tower and to build cottages around it, but instead sold to O'Neill.

Though construction won't begin until later this year, O'Neill has already sold 20 luxury condominium units for a total of $44 million.

But it wasn't until this year that the group broadened its involvement in west side development.

O'Neill is negotiating to purchase the former Weyerhaueser property to the north of the tower -- approximately 90 acres encompassing 1,500 linear feet of shoreline -- and another parcel to the south along Weaver Cove -- 44 total acres and about one mile of coastline.

The company is also in discussions to take over the lease of Carnegie Abbey, which abutts the tower property, according to Stephen Corridan, O'Neill's New England regional partner.

None of the deals has been finalized, though the company is moving forward with plans for the properties, which include developing a 1,500-slip marina in Weaver Cove, potentially the largest on the East Coast. The Coastal Resources Management Council had already approved permitting for the marina for the previous owner. When the sale is final, O'Neill would inherit the permit, Corridan said.

At a recent town planning board meeting, O'Neill representatives estimated their total development costs at $100 million.

"It's certainly a big, big project. Just look at the map and the land area involved -- it's a major section of the town," the company's local attorney, Vernon Gorton, said. "You've got land that covers almost the breadth of the west side of Portsmouth."

The company's Web site lists O'Neill as the largest re-developer of "brownfield" properties -- areas with previous industrial uses or environmental problems -- in the country.

Levesque said the company has "a lot of resources."

"They've got more money than I'm used to seeing, dealing with or hearing about," he said. "That doesn't make me comfortable. I'm enough of a small-town guy that this makes me nervous."

O'NEILL representatives approached the Portsmouth Town Council for the first time Feb 15. They asked for council support of their projects and legislation that would streamline the permitting process.

The council, wary of supporting such a broad proposal the same night it was introduced, scheduled a workshop to learn more about the plans and proposed legislation.

Two days later, before it could meet again, House Bill 5688 was introduced by Fox.

Some council members were furious.

"I think they have one heck of a nerve going over the Town Council's head," council president Edwards said of the state legislators.

Fox said he filed the legislation on Feb. 17 as a "place holder."

A House rule allows representatives to submit only three bills after Feb 17. Fox said he submitted the bill to beat the deadline, expecting to amend it later.

House Bill 5688 would have created "the Portsmouth Waterfront Economic Development District" to be controlled by an independent commission with broad powers that would oversee development on the town's western shore. It was modeled after similar legislation approved in 2003 for East Providence's waterfront.

It is unclear who would sit on the commission and whether the group's authority would supercede the local council and zoning board.

Gallison, who represents a part of Portsmouthand said he was the driving force behind the bill, said the intent was not to strip local control, but to coordinate projects and help developers get through the state regulatory processes.

That's exactly the kind of bill O'Neill Properties wants.

"Just about anything you do there you have to deal with DOT, DEM and CRMC. And you're going to have separate developments going on in different portions of that property at the same time," Gorton, O'Neill's attorney, explained.

"That can result in a morass of regulatory problems . . [The legislation] should make it go a little bit faster. It should made it go smoother."

FOX ACKNOWLEDGES that House Bill 5688 would have helped O'Neill Properties Group.

Coordinating the permitting would allow development to take place more quickly. Instead of years, the process could take months, say O'Neill's lawyer and others.

Fox also says the bill would have helped the state and town control projects along Portsmouth's shore, ensuring responsible and attractive development.

"If that's saying we're doing a favor for developers, then OK, we're doing a favor for developers, because, guess what? Development takes place and you want development. Every town has a tax base. I want to make sure property taxes in the city of Providence, town of Portsmouth, town of Westerly, city of Woonsocket are as low as possible because I'm a Rhode Island state representative.

"So if I can find a way that says the locals can control the developer and provide incentives for controlled development which is sensible in order to build the tax base and bring jobs into a community, then absolutely. I stand guilty. But am I trying to grease the pad for Mr. O'Neill? No."

Fox is the only legislator from that Feb. 4 gathering who has met J. Brian O'Neill, who heads O'Neill Properties Group.

The Pennsylvania developer has a multimillion-dollar home in Middletown, though his permanent residence is listed in public records as Pennsylvania. He is a member of the Carnegie Abbey golf club.

O'Neill visited the majority leader in his office shortly after the February tour. The encounter was brief, Fox said, and nothing more than an introductory meeting.

Fox said he has not seen or heard from O'Neill since, and he doesn't plan to, either.

"I don't work for him. I don't think he's contributed to me . . There's no expectation of [me] doing legal work for him," Fox, a lawyer, said. "So, there's no relationship."

In 2002, O'Neill did give $5,000 to the Rhode Island Democratic State Committee. No single donor gave more to the committee that year, according to the Center For Responsive Politics' database. At least nine other contributors donated $5,000.

During the 2004 campaign cycle in Rhode Island, O'Neill did not donate to the state party or to any individuals, according to the Rhode Island Board of Elections' database.

O'Neill did not respond to messages left with his assistants last week seeking comment.

GALLISON SAYS he is bothered by the talk that state legislators are trying to usurp local authority; that O'Neill Properties drafted the legislation and that there was a secret meeting in early February.

"I just feel badly that now people are casting these aspersions when there's nothing to be looked at," Gallison said. "My bottom line was what was in the best interest of the people in those neighborhoods. There's nothing secretive about any of this."

Gallison said the House majority leader is involved in the bill only because he asked him to be.

"I went to the majority leader, I asked him for his assistance," Gallison said. "I asked for his guidance and leadership and he was very gracious to do this. I asked him as a friend, as a personal favor to me."

Gallsion and Fox have served together on the Defense Economy Planning Commission in recent years, looking at the future of Aquidneck Island's military property.

Gallison said his motivation was to prevent unwanted development, such as a liquefied natural gas terminal or dredge dumping site, from popping up on the coast.

Gallison said he asked Fox to withdraw the bill Thursday evening, citing mounting pressure from Portsmouth residents and some Republican lawmakers opposed to the move, none of whom he'd name.

"There was a witch-hunt going on about why was Gordon Fox was involved in this," Gallison said. "This was my whole idea. But people for their own political reasons decided to make this more than what it was."

Despite criticism of the Fox bill, Levesque said he would introduce a new version if the Portsmouth Town Council wants it.

Gallison said the same.

"[The withdrawal] doesn't stop the process, it just slows down the process," he said. "We'll let it go through the Town Council. When they're ready to put something in we'll do it again."

Friday afternoon, a spokesman for Fox said the majority leader hadn't decided whether to sponsor a new version.

"[Fox] said he will be getting together with Representative Gallison" to talk about future action, said Fox's spokesman, Larry Berman. "He wasn't specific."