Source: Foster’s Daily Democrat (Dover, NH), October 4, 2014
Posted on: http://constfpn.advisen.com
As lawyers and insurance companies work to determine responsibility for the Aug. 13 sewer backup that damaged two downtown restaurants, a few paragraphs in a 40-page development agreement could shield the city from liability.
The city and First Street at Garrison LLC signed an agreement in January that contains key details about the $12 million project, including construction timetables and building design.
But the document also includes an indemnity clause releasing the city, its employees and elected officials from liability, legal fees, and out-of-pocket costs and other expenses related to issues stemming from the First Street project.
“That type of language is common in any number of agreements,” City Manager Mike Joyal said. “How it will apply in this circumstance, I can’t speculate. That’s something the insurance companies and attorneys will work out between themselves.”
Thus far, the city attorney has handled the city’s response to the sewer backup. However, Joyal expects the city will ultimately need to hire outside counsel.
Money for outside lawyers would come from funding set aside year for that purpose.
Sewage overflowed into Kelley’s Row and Blue Latitudes on Aug. 13 during heavy rains. A main sewer line apparently had its flow temporarily reduced as part of the First Street construction project.
“The belief is that as a result of the work being done by a private contractor for a private development, it contributed to the circumstances that led to flooding,” Joyal said.
Kelley’s Row co-owners Brian Kelley and Pat Duffy have spent $100,000 since the incident on cleanup and other costs and are facing $175,000 or more to rebuild. They announced this week that the restaurant would not reopen.
Blue Latitudes is scheduled to reopen Oct. 16, owner Jeff Roemer said Friday.
Kelley’s Row has filed a lawsuit against the city, contractors performing the sewer work and developers seeking damages from the sewer backup. A copy of the suit was not available Friday afternoon.
Since the lawsuit has been filed, Joyal said city attorneys have taken “whatever actions are necessary” to invoke the indemnity clause and other requirements spelled out in the development agreement.
Meanwhile, he said the city’s offers to help both businesses, including interest-free federal loans and possibly a grant offered through Dover Main Street, still stand.
First Street at Garrison LLC is run by Dover residents David Bamford and Kevin McEneaney. Attempts Friday to reach the developers were not successful.
Developers bought the triangular 1.2-acre lot on the Cocheco River from the city for $202,000. The first project phase consists of a five-story, 45,000-square-foot building with commercial space on the first floor and apartments upstairs. A rooftop deck also is planned.
The second phase to be built in the future calls for an 84,000-square-foot building with an underground parking garage. At that time, developers also will install lighting along the river and the Chestnut Street Bridge, among other public improvements.