By Bill Kirk
bkirk@eagletribune.com
June 28, 2009 12:25 am LAWRENCE — The city has until Tuesday to spend part of a $2 million state grant to revitalize a portion of Merrimack Street or face the possibility of losing the money back to the agency that awarded it. In mid-March, Greg Bialecki, the secretary of the Executive Office of Housing and Economic Development, came to Lawrence amid much fanfare to announce the grant would go to the city, which would then undertake infrastructure work at 290 Merrimack St., owned by Sal Lupoli. The demolition and asbestos removal work is intended to prepare the property so Lupoli can build a parking garage, office complex, and retail strip mall adjacent to his Riverwalk property. It was hailed as a classic public/private partnership that would spur economic development, increase the tax base, and create new jobs. But a series of challenges over allegations of improper bidding, as well as problems with the safety of the building — the old boiler plant that provided power to the nearby Wood Mill — delayed the project. Now, the deadline to use the grant money looms, and the city is scrambling for ways to spend it in an effort to keep Lupoli's $60 million project, dubbed Riverwalk 2, on track. "We are trying to spend it," said Lawrence's economic development chief, Tom Schiavone, adding that $1.1 million of the grant must be spent by the end of the month, while the remainder can be spent in the next fiscal year, which starts July 1. "The city will lose the money if it's not spent by June 30. We'll get very close to spending everything." Kofi Jones, spokeswoman for Bialecki's office, said the city has until June 30 to send invoices to the state showing it has spent all the money. She said it was "premature" to say whether that funding would be pulled back if it isn't all spent. Property owner Sal Lupoli said the project is on track and that the demolition will be completed by August. He said the delay has not jeopardized the project. But Schiavone said there have been delays, and he blamed them on Michael Gagliardi, the manager of the local laborers union, who challenged the original bids on the project to the attorney general's office. "Thanks to the wonderful work by Michael Gagliardi in delaying a major appropriation, we are severely behind the eight ball," Schiavone said. Gagliardi said in a claim to the state attorney general's office that the bids violated state law because Lupoli, not the city, was managing the process, among other claims. He said recently that mismanagement of the grant by the city is what has caused delays to the project. Schiavone said Gagliardi's opposition to the project is based on the fact that the company that won the original bid to demolish the boiler plant and remove the asbestos — All State Abatement Professionals Inc., or ASAP, of Plaistow, N.H. — was a nonunion shop. Gagliardi's union picketed the Merrimack Street work site for several days, prompting property owner Sal Lupoli to seek a temporary restraining against Gagliardi for blocking the entrance to Riverwalk 1. Schiavone said the ASAP contract has since been nullified and the entire project reconfigured and rebid. Just one company — S&R Corp. of Lowell — submitted a legitimate bid, he said. But it's a lot higher than the bid by ASAP. Schiavone said the bid by S&R, which is unionized, was more than $1 million, while ASAP's bid was around $828,000. He said the city was negotiating with S&R, adding that if a contract is not signed, then Lupoli himself could take over the demolition and asbestos removal work. "If S&R says 'No,' or we reject the bid, Sal would come in and do that portion of the work using his money doing it his own way," Schiavone said, adding that the city would then use the state money in some other way, like buying materials for the project. "We always knew Sal would need to spend $1.7 million of his own money to get the public roadways out there," he said. "If we get S&R under contract or not, at the end of day, he has to spend his own money. It doesn't matter how we get to the finished product. We have to spend $1.1 million by the end of the fiscal year." Lupoli said he is working closely with the state to get the project done. "By the end of August, all the demolition will be done," he said. "Everything is on time and financed. The bank has already approved us. They are just on hold until the buildings come down." Further, he said, he has already pre-leased about 40,000 square feet of the new retail and office complex, and has signed agreements with a coffee shop, a convenience store and a technology company. He said several tenants in Phase 1 Riverwalk will be expanding into Phase 2 space. "It's all good," he said. "We are creating jobs." ÔÇæÔÇæÔÇæ Join the discussion. To comment on stories and see what others are saying, log on to eagletribune.com.
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