KEVIN SWEENEY
‘Difficult situation’

Merrimack Valley homebuilders are awaiting the outcome of a dispute over a controversial ordinance that essentially creates a watch list of bad developers.

Some builders worry that if the ordinance is backed up in court, it could set a precedent that encourages other communities to create similar lists that penalize and blacklist developers they don’t like.

The ordinance creating the watch list comes at a time when complaints from communities and residents about developments and builders are on the rise. Many Bay State communities, worried about the burdens that large-scale housing developments place on town services, have restricted development by passing building caps or temporary moratoriums on new development. Others have increasingly adopted rules and regulations that make it tougher for builders to construct housing. Builders and real estate developers say all these actions contribute to the lack of housing supply and skyrocketing home prices.

An attorney involved in challenging the ordinance said it poses serious questions about how far a community can go to trample landowners’ rights, while some builders contend there are already enough safeguards and regulations in place to make sure that unscrupulous builders are dealt with properly.

The controversy surrounds an ordinance approved by Methuen leaders in April. According to city leaders, the ordinance was passed to foster better coordination among the various city boards on land development and “inappropriate conduct” in the development of land.

The attorney representing a Methuen developer who was about to be placed on the watch list argues that the ordinance is nothing more than a means of blacklisting certain unpopular developers and says the ordinance violates state law. She also claims that the ordinance was created to specifically stigmatize her client, a developer whom residents and town officials have complained about in the past.

“My client has been unfairly targeted by this ordinance,” said Catherine J. Savoie, a partner with Posternak, Blankstein and Lund in Boston. Savoie is challenging the validity of the ordinance in court. A judge recently issued an injunction prohibiting Methuen from moving forward with the ordinance.

Savoie said that the ordinance attempts to overcome some of the limitations that state law has placed on the power of cities or towns to “chill” and regulate development and to provide remedies for development infractions. The ordinance gives “new powers” to individuals within a community to enforce zoning and deal with violations, she said.

“I don’t think it fills in any holes in state law,” said Savoie. “I say it offends state law, because the ordinance substitutes new standards and procedures which are unconstitutional and contrary to the Zoning Act and the Subdivision Control Law.”

Methuen’s city solicitor denies that the ordinance was created to penalize Savoie’s client, developer Carmen Toscano, specifically. “That’s absolutely incorrect,” said City Solicitor Maurice Laraviere.

Soon after the ordinance was approved, residents filed a complaint with the city asking that Toscano be put on the list. Laraviere said residents of a particular subdivision filed the complaint claiming that Toscano violated a condition of his permit by not removing automobile parts from the site and that he “willfully abandoned” the subdivision project. The city then notified Toscano that his name would be placed on the list.

Under the ordinance, if enough residents complain about a particular developer or subdivision, a review board must have a hearing and if the complaint is ruled valid the builder is placed on the list for five years. The list is forwarded to all land-use boards and some residents any time the developers on the list apply for permits to build in the city. Hearings are then held before permits are issued and before any funding is released for the project.

Savoie said that Toscano was the target of this “mean-spirited” ordinance mostly because residents and city leaders falsely believe he was the developer of River’s Edge, 35 homes that were built on land that had once been a junkyard. Residents and city officials are concerned about the site because car parts have surfaced in backyards.

Savoie said Toscano was only an employee of developer behind the project, not the actual developer. She said city inspectors were onsite to monitor the development of River’s Edge, and now the city is trying to pin the blame on and “indict” Toscano for the development’s problems.

Toscano wants to pursue further development in Methuen, according to Savoie, but being placed on the list would make that virtually impossible. The ordinance forces watch-listed developers to post additional bonding and security for development proposals, even when the projects are in compliance with all the regulations and laws. Lenders are less likely to provide financing when so much uncertainty surrounds a developer’s project, she said.

‘No Need’
A judge in Essex Superior Court issued an injunction prohibiting the city from putting Toscano on the list. The court will decide whether the ordinance is valid.

The North East Builders Association of Massachusetts refused to support or oppose the ordinance because association leaders didn’t understand what prompted Methuen to propose the ordinance. The organization did not want to take a stand if the ordinance were proposed as a way to deal with one problem developer, said a local builder.

“There is no need for the list if all the rules and regulations are followed by the builders and the proper inspectional services are carried out,” said Nancy Beane, executive officer of NEBA.

“I’m not sure what motivated them [Methuen leaders] to put this in effect,” said Russell Leonard, a NEBA board member and owner of Leonard Electric in Lowell. “There are a lot of quality builders that do quality work … And there are inspectional services in place in each community to inspect what is done.”

Leonard also expressed some concern about other communities following Methuen’s lead. “As someone in the industry, I could see this being a problem, especially if it sets a precedent for other communities,” said Leonard.

Joseph A. Leone, a longtime builder in Methuen, was vehemently opposed to the ordinance as it originally was proposed. His stance later softened when the ordinance was significantly changed. Still, Leone would “prefer that there not be any need for it,” according to a letter he wrote to the City Council.

“While no industry welcomes additional government oversight, and no individual or company welcomes the need to comply with additional regulation, we all accept their inevitability,” Leone wrote in the letter.

“No matter how well regulated an industry group may be, there will always be a loophole or weak spot that will require some government action … There is a demonstrated need for some method to identify individuals who flaunt their noncompliance with current rules and regulations, both local and state. There is a need for those individuals to be held accountable for their actions,” he continued.

Kevin Sweeney, president of the Home Builders Association of Massachusetts, said he understands the “frustration” of both the community and the builders.

“It’s kind of a difficult situation,” said Sweeney, of Sweeney & Sons in Maynard.

But Sweeney said it is just “one more thing that communities are doing” to restrict development.