It's been two years since Taunton, Mass., City Solicitor Jason Buffington announced that a real turnaround was on the horizon for the forlorn and nearly vacant Whittenton Mills complex.
But any potential redevelopment of the 42-acre site is now on hold, as result of a complaint submitted to the city by a lawyer representing a development group.
The October letter of notification addressed to then Mayor Thomas Hoye from Ginny Sinkel Kremer, of Concord-based Blatman, Bobrowski and Haverty LLC, accuses the city of negligence for having failed to disclose important, monetary information prior to a tax-lien assignment auction in 2017.
Buffington, in November 2017, announced that an investment group had paid $1.2 million at auction, not for the old industrial buildings and land at 437 Whittenton St., but for the city's tax lien attached to the site that overlooks Mill River's Whittenton Pond.
The somewhat novel approach of selling the lien, as opposed to the property, meant that the city would not have to assume ownership.
Rehabilitation plans for the site purportedly would result in more than 250 market-rate and assisted living apartments as well as professional office space.
Kremer, in her letter, also states the $25 million project would create nearly 2,300 jobs and transform "a dangerous and blighted property into a sparkling gem" providing high-quality affordable housing and tax money to the city.
The investors were identified as former Goldman Sachs executive Noreen Harrington and Orlando-based Robert Carmichael, a founding member of Blackwood Holdings LLC.
They call their development company for the project LHPNJ LLC.
Hoye, who is now the register of Bristol County Probate and Family Court, at the time praised Buffington for coming up with the idea of the lien sale and applauded the investors, who he called "the real deal."
The owner of record of the property remains Jefferson Development LLC, whose Leominster-based principal David Murphy paid $1.7 million in 2005 for the sprawling site in the heart of Taunton's Whittenton neighborhood.
Murphy in 2012 said he was working on a plan to attract Chinese investors. When that fell through he said he was courting wealthy African investors, which also never materialized.
In 2014, his Jefferson Development LLC filed Chapter 11 bankruptcy protection.
By that time it owed the city hundreds of thousands of dollars in taxes and fees, as well as nearly $400,000 for an unpaid 24-hour fire watch — ordered and performed in 2013 by the city's fire department because of a broken sprinkler system.
That fire watch bill with accrued interest eventually ballooned to $600,000 and accounted for half the amount of the lien that was purchased by LHPNJ LLC.
Kremer was hired last spring to represent the interests of LHPNJ LLC.
The mortgage holder of the property is listed as Whittenton Holdings LLC.
In her letter, and in a subsequent phone interview, Kremer points out that an attorney for Whittenton Holdings LLC, in 2015, filed a Land Court motion challenging the city's inclusion of the fire watch charges on the tax lien.
She claims Buffington was aware that the lawyer, Brian Hughes, was challenging the city in that regard.
Kremer also alleges that Hughes in December 2015 sent an email to Buffington stating that "having heard nothing from the City relative to its willingness to negotiate a reduction or elimination of the fire watch lien, my client has instructed me to forward the attached complaint."
"I can't imagine his not disclosing this information," Kremer said during the phone interview, referring to Buffington.
"These are city officials," she added. "It's not like they're used car salesmen."
In her letter, she says the city's "actions and omissions amounted, at a minimum, to negligence in failing to disclose adverse information about real estate and/or negligent misrepresentation."
"It is our hope," she wrote, "that City leaders will step forward and take responsibility for the mess that has been created."
If an agreement can't be reached, she said, the developer will take legal action to recoup monetary damages and rescind the assignment of the tax lien "leaving the City standing in the shoes it wore prior to the auction."
Kremer also alleges that Taunton officials assured her clients that state law affords a judge wide discretion in determining the reimbursement amount for the lien.
She alleges city officials told her clients that "the worst case scenario" for them would be reimbursement of the $1.2 million, along with earnings derived from the state's pre-judgment 12% state statutory rate.
A prevailing party in a lawsuit is entitled to pre-judgment interest as compensation for loss of use of money.
Buffington, in a strongly worded email, refutes Kremer's contention that the city in any way misled or concealed valuable information from the developers.
He said the city followed all proper steps in regard to the fire watch detail charges being placed on the owner's tax bill.
"Those charges then became part of the real estate tax, in accordance with state law," Buffington wrote.
The letter from Kremer, who he refers to as an "out-of-town lawyer" representing "wealthy, former Wall Street executives," is "full of half truths and outright misrepresentations.
As an example, Buffington said, he cites Kremer's opening sentence claiming that her clients have "kept current on all City taxes and charges."
As of Oct. 31, he said, "these wealthy business people owe the City $44,358 in past-due real estate taxes."
Buffington added: "There hasn't even been a trial in the Land Court yet. These out-of-towners want the taxpayers of Taunton to give them a bailout to the tune of hundreds of thousands of dollars (and) while the City wants to see Whittenton Mills redeveloped, there will be no unwarranted taxpayer bailout on my watch."
Kremer, who also works as Grafton's town counsel, has not ruled out the possibility that the matter can be settled out of court.
"There are all kinds of things the city can do," she said, including providing certain infrastructure improvements such as sewer lines.
Murphy, in a phone interview, said the only tenants currently renting space in Whittenton Mills are a couple of storage-space businesses.
He says he's sitting on the sidelines and is not involved in any interaction between Kremer, Whittenton Holdings LLC and the city.
"It's out of my control," he said.
Murphy said if the project comes to fruition, he'll likely play a management or development role and will have "an undetermined interest" in terms of ownership.
He also said it's possible that the current developers eventually will be satisfied to be reimbursed for the $1.2 million along with statutory interest payments, and then transfer ownership to a different developer.
Murphy says he expects that "some buildings" in Whittenton Mills would eventually be knocked down to afford enough space for fire engines to enter and exit the site.
He said he's optimistic that a compromise of some kind can be reached. But he said the clock is ticking.
"They (the developers) never thought it was gonna go this long," he said.
"I'm sure they're very upset about it. They've got investors," Murphy added.
In 2005, the same year that Murphy bought Whittenton Mills, an old dam spanning Whittenton Pond buckled and threatened to collapse after heavy rainfall.
A temporary evacuation ensued and the incident, which came to be known as Taunton's "dam crisis," attracted national news coverage.
It was resolved after the state stepped in and replaced the wobbly structure with a spillway consisting of rock boulders.
