BY PAUL LEIGHTON
---- — The state Appeals Court yesterday ordered the Department of Environmental Protection to deny the city a license to build a Black Cow restaurant on the waterfront, delivering a major blow to the highly touted plan that has been seven years in the making.
In its ruling, a three-judge panel said the DEP’s decision to disqualify a competing proposal by Beverly Port Marina to build a boatyard on the property was “legally erroneous” and “not supported by substantial evidence.”
The ruling vacated a previous ruling by a Superior Court judge in the city’s favor and tossed into limbo a key piece of property that has symbolized the city’s inability to develop its waterfront.
Mayor Bill Scanlon said it is “highly likely” that the city will appeal the decision to the Massachusetts Supreme Judicial Court, the state’s highest court, before he leaves office on Jan. 5.
“I’m very surprised and very disappointed,” Scanlon said of the ruling. “We think it’s flawed.”
The ruling came just three weeks after the city signed a 40-year lease with restaurant owner Joseph Leone allowing him to build a Black Cow restaurant on the city-owned land near the Veterans Memorial Bridge.
The City Council authorized Scanlon to sign the lease, but not without some councilors expressing legal concerns about doing so before the Appeals Court made its ruling.
City Solicitor Roy Gelineau said yesterday that the lease has been signed. But he said the terms of the lease would no longer apply if the city loses an appeal to the Supreme Judicial Court and is unable to acquire the state license for the project to proceed.
Leone said yesterday he remains committed to building the restaurant if the city can acquire the necessary license. Asked if he would sue the city if the project cannot go forward, Leone said, “No comment.”
The Appeals Court ruling was based on a provision in the state regulations governing the state’s 11 “designated port areas,” including Beverly’s. That provision requires the state to consider “competing proposals” before it grants a license for a project.
The competing-proposal provision had never been utilized in the 35-year history of the designated port authority regulations until Beverly Port Marina submitted one for the Beverly site in 2008. The proposal called for Beverly Port Marina to lease the site from the city and use it as a boatyard, which it said was a more appropriate “water-dependent” use than a restaurant.
The DEP rejected the proposal, saying it was not “feasible” in part because the city was unwilling to lease the site to Port Marina. Instead, the DEP granted a license to Beverly to proceed with the restaurant plan.
In the ruling issued yesterday, Appeals Court Judge Mark Green said that reasoning was “particularly unpersuasive” because the city would naturally view a competing proposal “with some antipathy.”
Green said the DEP is required to deny a license for a designated port area project if a competing proposal comes from someone who is “ready, willing, and able to use the site for water-dependent industrial uses to a greater extent than proposed by the license applicant.”
Green said the competing proposal doesn’t actually have to go forward, but it ensures that a “less satisfactory project (from the perspective of the regulatory purpose of fostering water-dependent industrial uses) will not preempt availability of the tidelands site for alternative uses more in keeping with that objective.”
Gelineau said the city would not lease the land to Beverly Port Marina for a boatyard, so all the competing proposal does is kill the restaurant.
“The net result of this is you can create a situation where you can block the revitalization project and never have to do anything except get in the way,” Gelineau said.
Beverly Port Marina owner Frank Kinzie issued a press release yesterday saying the ruling demonstrates that the city “is not outside the law.”
Kinzie has maintained that he is not opposed to a restaurant at the location, but it should be built only if the designated port area rules are lifted or modified so that all property owners within the port area can develop their property.
“We look forward to working with the city, Beverly Harbor Management Authority, other waterfront owners and neighborhood groups to achieve development of the Beverly waterfront that will make us all proud,” he said.
The city has 20 days to file an appeal with the Supreme Judicial Court, which can choose to hear the case or not.
Mayor-elect Mike Cahill said he would support the Scanlon administration filing the appeal.
“Clearly there’s work to be done on this issue and filing an appeal is part of it,” Cahill said.
Staff writer Paul Leighton can be reached at 978-338-2675 or email@example.com.