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SBA: Let Rocky Pt. buyer pay for razing

01:00 AM EST on Tuesday, November 28, 2006

By Cynthia Needham

Journal Staff Writer

WARWICK — The court-appointed receiver for the former Rocky Point amusement park has asked a federal judge to order a developer to pay for demolishing buildings in the park’s former midway, after a devastating fire last month.

The U.S. Small Business Administration says the terms of the 2004 purchase-and-sale agreement with a consortium that plans to build condominiums on the property left that corporation responsible for “all operational responsibilities and all costs and expenses associated with ownership of the premises.”

In court papers filed in U.S. District Court last week, the SBA agrees with city officials that the buildings in the midway section should be razed, for the sake of public safety. But the agency says the developer, not the SBA, should pay for the work.

Mark Hayward, head of the state office of the SBA, yesterday reiterated that position. He declined to comment further, saying he would wait for Senior Judge Ronald R. Lagueux’s ruling.

The city now says it plans to file its own court documents this week requesting that the midway buildings be torn down as soon as possible.

“One of the reasons we want to intervene is to move this along,” said City Solicitor John Earle. “The mayor has been very direct in his marching orders with me. Do whatever it takes and whatever possible to ensure that [the demolition] happens.”

“I expect that we will hear from the purchaser in relatively short order,” he added.

A lawyer for Vanderbilt Capital, LLC, the development consortium, did not return a call for comment yesterday. Vanderbilt Capital includes home-construction corporation Toll Brothers as well as a South Carolina-based developer. The companies are collaborating on slow-moving plans to create a residential development at the site.

According to the court filings, the SBA negotiated the sale of the Rocky Point to Vanderbilt Capital in 2003 for a total price of $25 million. In 2004, the parties signed a purchase-and sale agreement for the property, at which time the SBA says Vanderbilt “assumed the operational costs.”

However, there has not yet been a closing on that sale, which is contingent on the developer’s obtaining the city permits it needs for the project. The consortium is reviewing whether to reduce the scope of the project.

The mid-October blaze destroyed the Cliff House, one of the park’s largest buildings. Less than a week after the fire, city officials demanded that the SBA tear down the structures at the former Midway, which are in various states of disrepair. Not only were the buildings a fire hazard, they also posed a danger to firefighters who might have to maneuver inside them in the event of a blaze, officials said.

The SBA shot back that demolition was complicated and said it would seek approval from U.S. District Court in Providence to raze the buildings.

Rocky Point closed in 1995, loaded with debt after years of losses under its former owner, Arnold Kilberg’s Moneta Capital. Creditors liquidated the property in 1999; soon after the SBA was appointed to manage the property and find a long-term use for it.