CAMBRIDGE — Cambridge City Manager Tom Carroll said a May 1 Yacht Maintenance transfer plan was the catalyst for a lawsuit filed by the city against Cambridge Waterfront Development Inc., CWDI Holdings and Yacht Maintenance Company.
In the city’s complaint, which was filed in Dorchester County Circuit Court Wednesday, the Cambridge commissioners allege that CWDI Holdings intends to transfer 2.6 acres of land to Yacht Maintenance “on or around May 1.” It says that CWDI and CWDI Holdings contend this agreement with Yacht Maintenance satisfies the conditions of a June 2021 transfer agreement with the city.
But Carroll said there was no communication from CWDI about the planned transfer, and the city found out via a request from a title company seeking information needed for its closing.
Carroll said CWDI tried to “sneak this one past” the city, in violation of the transfer agreement and “in contrast” to what CWDI representatives told elected city officials in a meeting with Del. Tom Hutchinson (R-Dorchester, Talbot, Wicomico) on April 23.
The Commissioners of Cambridge voted 3-1 Wednesday to bring the suit against CWDI, CWDI Holdings and Yacht Maintenance.
The lawsuit seeks $75,000 in damages and requests the court issue temporary, preliminary and permanent injunctions enjoining defendants from transferring any portion of property in violation of the covenants of a transfer agreement.
At a special Cambridge City Council meeting Wednesday, Commissioner Jameson Harrington made the motion to direct attorneys Timothy Maloney and Alyse Prawde to file the lawsuit. Commissioners Laurel Atkiss and Sputty Cephas voted in favor of it. Commission President Lajan Cephas voted against it.
“I’ll just say that I believe that there’s probably another pathway forward,” Lajan Cephas said before the vote. “But I also believe in our system where whatever the body says, that’s the will the city should take.”
Commissioner Brian Roche was not present at the meeting. In a statement to the Star Democrat, he commended Lajan Cephas for voting against filing the lawsuit.
This lawsuit is the latest in a series of actions the city has taken regarding its concerns with CWDI’s Cambridge Harbor project, a project to develop the space along the city’s waterfront.
In October, the city wrote a letter to CWDI expressing Carroll submitted his resignation and said he was resigning over concerns with the project. April 16, Cambridge Mayor Stephen Rideout held a meeting where he proposed amendments to CWDI’s Articles of Incorporation.
In an interview, Carroll said cities don’t typically sue nonprofits.
“It’s not a step that we take without understanding that we have to exhaust every other recourse first,” he said. “But when they are not being forthright, (when) they are not changing the plan as we have insisted that they do (and) when they are not fulfilling their covenants, we’re left with no choice.”
THE LAWSUITThe lawsuit, filed in the Dorchester County Circuit Court Wednesday, alleges that CWDI is in violation of a transfer agreement it entered into with the city in June 2021.
The transfer agreement gave CWDI roughly 22 acres of land — including about 2.6 acres of land subject to a lease agreement between the city and Yacht Maintenance — for $5.
In the lawsuit, the Commissioners of Cambridge mention two areas of the agreement they believe CWDI is in violation of. The first is that, per Section 6E of the transfer agreement, “no portion of the property may be transferred unless the proposed use of the subject parcel(s) is ‘shovel ready’ (with permits, financing and groundbreaking within 90-days of closing)...”
The second area is that, per Exhibit C of the agreement, “CWDI will not transfer, subdivide or encumber all or any portion of the property” until reaching a definitive agreement with a developer or developers. That developer must come from a developer request for proposal process, which is outlined in the transfer agreement.
The commissioners argue that CWDI violated this in March 2022 by transferring city-donated property to CWDI Holdings, a limited liability corporation that CWDI created. They say CWDI has not gone through the RFP process to choose a developer.
The commissioners also allege the May 1 Yacht Maintenance transfer plan does not satisfy the conditions of the transfer agreement because the property was initially transferred from CWDI to CWDI Holdings in violation of the transfer agreement, and it was done without CWDI entering into a definitive agreement with a developer following an RFP process.
In his statement, Roche said there was a general agreement after the April 23 meeting with Hutchinson to wait until the next CWDI board meeting to consider any next steps. He said his understanding is that CWDI didn’t intend to sell the Yacht Maintenance property May 1, so there was no need to file the lawsuit.
When asked by the Star Democrat about whether CWDI has any immediate plans to sell the Yacht Maintenance property, CWDI Executive Director Matt Leonard said he could not comment on pending litigation.
In the lawsuit, the commissioners demand a jury trial. The defendants have 30 days to file a notice of intention to defend.
The lawsuit also mentions CWDI’s “imminent” agreement with a boutique hotel developer, which CWDI Board President Angie Hengst said was nearing signing at a CWDI Board of Directors meeting March 20. The lawsuit states it is “highly unlikely” that the deal is imminent because “any established hotelier would conduct significant due diligence,” which includes inquiring the city about various aspects of the project. The lawsuit says the city has not received any inquiries.
Carroll’s final day as city manager is Friday. He said that for the Cambridge Harbor project to be successful, CWDI needs a brand new start.
“Unfortunately the CWDI board has wasted the last 2½ years not fulfilling their agreements and expecting the city to just go along with their failure to fulfill what they agreed to,” he said. “So what I think would lead to success would be for a brand new start for CWDI. To hit reset and start over and recognize that this plan cannot move forward in its current arrangement.”
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