Regal Cinemas bidder alleges Westborough Select Board failed to apply RFP criteria

8404

Regal Cinemas bidder alleges Westborough Select Board failed to apply RFP criteria
The former Regal Cinemas is located at 231 Turnpike Road. (Photo/Tami White)

By Laura Hayes and Maureen Sullivan

Update: This article has been updated with comment from David Ferris.

WESTBOROUGH – Westborough is heading to court. 

One of the bidders of the former Regal Cinemas – Ferris Development Group – is seeking court action that would in part require the town to award it the bid. 

“Our bid was 15% higher, and I wonder if any of the Select Board members would sell their homes to the lowest bidder?” Ferris owner David Ferris told the Community Advocate. “I have a simple philosophy – if you wouldn’t personally do it, then don’t do it with taxpayer assets.”

The complaint was filed against the town and LAX Media in Worcester Superior Court on Nov. 14.

RFP bidders

Ferris Development Group was one of three bidders that responded to Westborough’s request for proposals (RFP) regarding the redevelopment of the former Regal Cinemas. The town acquired the property through foreclosure earlier this year after the movie theater was suddenly shuttered back in 2017. 

Over the summer, the town issued a RFP to purchase the property. Ferris’ attorney, Thomas Mullen, wrote in the complaint that the RFP said there would be five evaluation criteria – purchase price; other financial benefits; financial resources; ability to proceed; and sustainability. 

Ferris had proposed to turn the property into a “beehive” location. According to the complaint, a beehive location provides space for tradespeople along with a centralized website where interested people can find contractors. 

In the complaint, Mullen wrote that Ferris proposed to donate a conservation restriction over adjacent wetlands to the town along with other sustainable initiatives, such as powering the site through a solar farm. 

Ferris had a construction schedule beginning in early January with the beehive proposed to be opened on June 1. 

Ferris had bid $2,875,000.

LAX Media, which is the parent company of Apple Cinemas, wants to convert Regal Cinemas into an entertainment center, including movie theaters. Its bid was for $2.5 million.

Ferris said his firm segregated $5 million in a separate account to buy and rehabilitate the former movie theater. He questioned LAX Media’s financing for the project, alleging that LAX Media needed a loan at 9% interest and 3% origination fees, or “hard money loan from a private lender with a 12-month term.”

“Did the town consider this a red flag, and even discuss deed restrictions with the parcel to protect residents from selling at the rock-bottom bid?” Ferris said. “Can LAX simply flip the property after closing and sell to someone who never puts a theater in the location?”

The third and highest bid was from Pulte Homes at $7,942,000, which sought to build 108 units on the property.

Ultimately, the Select Board awarded the bid to LAX Media on Nov. 2.

According to the complaint, the Select Board announced that LAX Media had received three “highly advantageous” and two “advantageous” ratings, Ferris received two “highly advantageous” and three “advantageous” ratings and Pulte received two “highly advantageous,” one “advantageous” and two “least advantageous” ratings.

“How does LAX get ‘highly advantageous rating against a cash buyer with cash to revitalize the assets?” Ferris said.

Mullen argued that the town was obliged to apply the criteria “rationally.”

“[And no] rational person could have concluded that LAX submitted a proposal that was superior to Ferris Development’s proposal under the criteria listed by the town in the RFP,” Mullen wrote.

Ferris sought a judgment, including an awarding of damages and the cost of the suit. 

Ferris Development also asked the court for a temporary restraining order that forbade Westborough from executing and delivering the purchase and sale to LAX Media, pending a hearing on Ferris’ application for a preliminary injunction. 

It sought an injunction that forbade the town from executing and delivering the purchase and sale and requiring the town to instead award the purchase and sale to Ferris. 

The hearing for Ferris’ motion for an injunction has been scheduled for Dec. 8. 

The Community Advocate has reached out to LAX Media and town officials for comment.