SalemNews.com, Salem, MA

March 10, 2014

Hanney vows to fight Old Town Hall lawsuit

Lawsuit: Ipswich, Hanney disagree over soundness of building

By Jonathan Phelps
Staff Writer

---- — IPSWICH — Bill Hanney is vowing to fight a lawsuit filed by the town demanding him to transfer the Old Town Hall property back to the town.

“I think it is a complete waste of everyone’s money,” Hanney said, saying he has no plans to either hand the building over or settle the lawsuit. The civil case could go to trial in the fall if a settlement is not reached, according to court documents.

Town officials said they have no choice but to pursue legal action, saying the historic downtown building has been deteriorating for the past eight years. The town sold the building in order to preserve it and bring economic development to that area of downtown, according to the lawsuit.

Hanney, who owns the North Shore Music Theatre, bought the property from the town in 2006, intending to turn it into an entertainment and cultural center, with ideas that included a theater, coffee shop, bookstore or other shops. But nothing has materialized since the purchase, and the town now claims that Hanney has breached his contract and failed to preserve the historic building.

The town is also gearing up for the fight: Town Manager Robin Crosbie’s proposed budget for next fiscal year includes an additional $30,000 for legal fees.

“The Old Town Hall litigation is ongoing, and its final disposition is unknown,” Crosbie wrote in her budget plan. She said there were also unresolved personnel matters, which may also require some of the additional funds.

Selectmen approved pursuing the lawsuit in January 2013. The most recent activity as part of the litigation was an inspection. A pretrial conference is set for October.

“The goal of the lawsuit is to enforce the condition of the sale or restore the control of the Old Town Hall to the town,” Crosbie said. “The issue is it is an icon in our business district, and it is essentially abandoned.”

Selectman Bill Craft said the board is concerned that the building will deteriorate to point that it can’t be saved.

At the corner of South Main and Elm streets, Old Town Hall was built in 1833 and has been used as a Unitarian church, town hall, police station, Town Meeting hall and district court.

“I don’t think we have any other choice,” he said. “The building is rapidly declining. ... It was sold with the agreement that improvements would be made.”

The property was sold to Hanney’s Entertainment Management Corp. for $300,000 in 2006 after a request for proposals process to determine how to sell it.

“The EMC proposal described proposed renovation and restoration of the building, including replacement of the roof, restoration of the second-floor hall and balcony, and restoration of interior historic detail and plaster ceiling,” the lawsuit reads. The proposed renovations were to cost $1.2 million.

The proposal called for a “proposed timeline of less than a year from the town’s designation of the developer to the grand opening.” The town has the first right of refusal to purchase the building anytime it changes hands.

The lawsuit alleges Hanney failed to uphold his agreement to renovate and preserve the building.

“The defendants have not performed the maintenance and repair required to preserve ‘the characteristics which contribute to the architectural, archaeological and historical integrity of the building, as required by the preservation restriction,’” the lawsuit alleges.

Hanney disagrees.

“The building is structurally sound,” he said. “We continue to maintain it.”

Hanney also says there has been no breach of contract, as there were no deadlines established to complete the project.

In the fall of 2010, Building Inspector Jim Sperber ordered Hanney to reconnect the fire alarms, as well as clear the building of theater props he had stored there.

Hanney said he is still committed to building and is working on finding the right partners for the project to succeed. He said the economy has been much worse than when he bought the building.

“Everything fell apart as the economy fell apart,” he said. “Now for eight years, we’ve been trying to get people interested in the project.”

He said he has talked to “multiple dozens” of theater groups, restaurants and general developers to get the project moving again. He said he did interior demolition to the building when he had tenants lined up.

“That is when people pulled out,” Hanney said. “I am not going to construct a building without any tenant.”

A nonprofit group, Ipswich Playhouse Society, was interested in purchasing the building at one point. Multiple attempts were made to reach an agreement, but nothing ever happened.

“Things are starting to happen,” he said. “We have done our very best to get interested tenants.”

Craft complains that Hanney has focused on the North Shore Music Theatre, which he bought in 2010, rather than the Ipswich property.

“We’ve heard all kinds of promises,” he said. “In the meantime, he has taken the North Shore Music Theatre and put his attention on that in a seemingly bad economy.”

But Hanney said he “adores” the Old Town Hall building and can balance multiple projects at once.

“I didn’t buy it to keep it empty for eight years,” he said. “That is not a good business plan.”