COVID-related delays scheduling town meetings and relaxing other deadlines involving municipalities threaten to delay and derail developments.

More than one year into the novel coronavirus pandemic, we’ve all had to overcome some hurdles along the way. As a commercial real estate attorney, my clients seeking to develop vacant land have encountered additional delays that they would not have otherwise experienced in a pre-pandemic world, with the bulk of the delays occurring at a municipal level. With town meeting season upon us in Massachusetts, this piece serves as a reminder of what those hurdles are and how they continue to affect commercial real estate developers, sellers and municipalities.   

On April 3, 2020, Gov. Charlie Baker signed into law Chapter 53 of the Acts of 2020 to provide relief, among other things, to the rigid timelines and formalities usually imposed upon municipalities in their day-to-day operations.  

An indirect consequence of the law is the inability or unwillingness of municipalities to take action on large-scale commercial development projects at virtual meetings and the suspension of statutory timelines for the release of land that has been classified, valued and taxed as forest, agricultural/horticultural and recreational under MGL ch. 61, 61A and 61B, also known as “chapter lands”. 

Municipal Rights and Chapter Land  

Pre-pandemic, action on requests for zoning amendments would have been acted upon at the municipal level at regularly scheduled town meetings. Since most of those town meetings were originally scheduled for some time during the peak of the COVID-19 outbreak in early spring 2020, municipalities postponed those meetings. 

Upon the passage of the law, municipalities were provided further relief allowing town meetings to be delayed beyond June 30, 2020 and thereafter in additional 30-day increments. As a result, most regularly scheduled 2020 town meetings were postponed and actions that would otherwise have been taken up at those meetings were delayed indefinitely, presumably to the 2021 town meeting season, unless an earlier special town meeting was requested by the developer.  

The decisions to either delay indefinitely or request a special town meeting were unanticipated consequences that lead developers to re-think, renegotiate or terminate large scale development projects at the risk of incurring additional costs and delays to the overall construction and development budget.  

Similar effects were felt on developments where the land sought to be developed required the cessation of or change in use of chapter land.  

The removal of chapter land from its protected status requires certain statutory formalities be met where the seller notifies the municipality of its intent to convert or to sell, and the municipality then has 120 days to act on its statutory right of first refusal. Pre-pandemic, if no action was taken during said 120 days the land could be sold free and clear of the municipality’s right of first refusal. Post-pandemic and post-passage of the law, the time period that municipalities are required to act, respond, effectuate or exercise an option to purchase chapter land has been extended until 90 days after termination of the governor’s March 10, 2020 emergency declaration, which is currently slated for June 15.  

This effectively has given municipalities over a year and counting to determine if they would like to purchase chapter land from the landowner, thereby delaying the sale and development of such land. This is contrary to the legislative intent of limiting the time for such municipal consideration so that land could be freely sold and developed. 

Extended Time to Oppose Sales and Development 

To illustrate the implications that the law actually has, consider the following example: a developer, through its seller, provided a notice of intent to sell in April 2020. The land subject to said notice would ordinarily have been released from the chapter land restrictions as early as July 2020. The land could have been sold, the seller could have received the proceeds, and the municipality would be the recipient of rollback taxes for prior years and new tax revenue from the development of the now fully assessed developable land. 

Instead, that same developer and seller must wait until either 90 days after Gov. Baker lifts the emergency declaration; or when the municipality decides to act affirmatively either to waive its statutory rights or to purchase the land notwithstanding the emergency declaration, whichever happens first.  

By delaying this process, the law has afforded townspeople additional time to oppose a sale or development, while the seller continues to carry land for up to an additional year that it had hoped to have sold already, the developer’s deposit remains tied-up in escrow, the development is delayed and no one benefits.   

Currently, developers and sellers are doing the best they can to work together to set realistic dates and terms in the face of such delays. Most sellers realize the additional complications with performing due diligence but certainly such delays and accommodations come at increased costs to the developers. Everyone is trying to be respectful of this uncharted territory but at some point, business must resume, perhaps not “as usual” but, without town action, the landowners, developers and municipalities will miss huge (and potentially profitable) opportunities. 

The best advice that can be given is: Be patient and be practical. As town meeting season gets underway, we can only hope that we see a shift in the prior year’s delays and hesitancies to act. 

Sarah K. Tricot practices commercial real estate law including development, sale, acquisition and leasing for Murphy & King P.C. 

Why Developments Requiring Municipal Relief Face Delays

by Banker & Tradesman time to read: 3 min
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