Pillsbury Realty Suing DeMoulas For Woodmont Access Road Stall

Pillsbury Realty Development, LLC, the developer of the 600-plus-acre Woodmont Commons Planned Unit Development (PUD), is suing DeMoulas Super Markets (DSM) for alleged “purposeful, deliberate, and continuing delay in fulfilling its obligations under an Access Agreement signed by the parties in May 2011, thereby blocking Plaintiff’s ability to move forward with its development plans.”

The lawsuit was filed in Rockingham Superior Court by Attorney Daniel Luker of Preti Flaherty Beliveau & Pachios PLLP of Concord.

The complaint, as reported in last week’s Londonderry Times, notes that DeMoulas’ actions put the entire Woodmont Commons project in jeopardy.

According to an 82-page complaint filed March 28, Pillsbury seeks “$18.5 million for the land Pillsbury purchased from 2009 through 2011” and $4 million for “professional fees, costs and expenses of conceptualization, planning, study, consultation, engineering, permitting, presentation and approval of Woodmont Commons Master Plan 2009 through 2013.” It seeks to attach DeMoulas’ (DSM) New Hampshire real estate to obtain that sum.

“The attachment of DSM’s New Hampshire real estate is necessary to preserve Plaintiff’s ability to collect the judgment it is likely to recover against DSM because, upon information and belief, the current DSM Board is in the process of encumbering or selling a substantial amount of DSM’s real estate and other assets, and may vote at any time, as it has in the past, to distribute all or most of DSM’s remaining cash reserves, which are primarily in Massachusetts banks or otherwise beyond the jurisdiction of this Court,” the lawsuit states. “Given the long and very public history of infighting among DSM shareholders over the control of the company, there is also absolutely no certainty that DSM will exist when Plaintiff s damage claims are reduced to final judgment.

“The requested attachment is the only assurance this Court can provide that there will be assets available in New Hampshire for Plaintiff to levy upon at the conclusion of this litigation,” the complaint states.

The complaint explains that DSM entered an access agreement, made necessary in order to move its supermarket from a smaller location to a larger one. As a result, a contingency of working with Pillsbury on the access road was required.

“DeMoulas Supermarkets Inc. shall work with Pillsbury Realty Development, LLC to coordinate appropriate means of providing future access to the former orchard parcel and Pillsbury Road, through an easement or other legal agreement to be worked out between the parties,” that access agreement states. “The future access shall be stipulated in the agreement to allow for an eventual four lane roadway connection (anticipating future traffic demand for development of the former orchard parcel) but can initially be designed as a two lane roadway. No certificate of occupancy for the relocated supermarket shall be issued until such time that an agreement for the future access is completed and a copy is provided to the Community Development Department for the project file.”

Pillsbury alleges that the move took place and the store is larger and more profitable than the previous one but DeMoulas is reneging on the access road agreement signed May 23, 2011.

The complaint further alleges that due to DSM’s alleged breach of its obligations, the Plaintiff has been unable to lay out or begin permitting and pre-construction work for the access road into the Woodmont development, a process that takes at least six to eight months, and has already lost the 2014 construction season. If DSM continues to refuse to honor its contractual obligations, the process will be further delayed and the 2015 construction season will be lost, the lawsuit states.

“Plaintiff s inability to move forward with the access road also imperils the Project approvals, which will expire in October 2017 unless Plaintiff commences ‘active and substantial construction’ of the Project in accordance with the Master Plan,” the lawsuit notes.

According to the complaint, the Plaintiff 3 s inability to move forward with the project has frustrated the plans and expectations of the Town of Londonderry, which approved the project with the understanding that already-failed intersections and mounting traffic problems in the Route 102 corridor would be relieved by the access road in question, and with the hope that the Project would generate significant tax revenues and other innovative and long- term benefits for Londonderry and surrounding communities.

“Plaintiff’s inability to proceed with the roadway has also completely crippled Plaintiff’s ability to respond to and attract the national commercial and residential developers who would commit to and invest in the Project,” the complaint states.

“In short, because the Project cannot reasonably now be modified or reconfigured to provide alternative access, DSM’s continuing refusal to honor its obligations under the Access Agreement has caused Plaintiff significant damages, and has put the entire Project at risk,” it states.

If Woodmont cannot be built, Pillsbury would lose “additional multiple millions of dollars in projected returns that would otherwise be realized on its planning for and investment in the Project over the next 20 years,” the complaint states. “Plaintiff reserves the right to increase the amount of this attachment request if DSM continues to block the Project, and if additional damages are incurred.”

The complaint also states that Pillsbury continues to suffer harm as a result of DSM’s breach, including but not limited to the following: A. Inability to lay out and design critical infrastructure for Woodmont, because it is not known whether and where the Access Road will be located, which also prevents the construction of water, sewer, and traffic mitigation for the PUD; B. Despite the considerable goodwill generated by the Londonderry public approval process, Pillsbury has been unable to affirmatively market Woodmont as ‘open for business,’ or to respond to numerous tenancy and leasing inquiries regarding basic infrastructure specifications or timeframes; C. Inability to reap a return on investment for a project that is otherwise ready for the marketing of site-specific proposals and physical development; and D. Loss of at least one construction season.

The complaint seeks judgment on three counts: Count One, Breach of Contract, stating that DSM breached its duties under the contract agreement by refusing to cooperate with Pillsbury to formulate development plans for the access road; Count two, DSM owed Pillsbury implied duties of good faith and fair dealing under the access agreement; and Count three, DSM has engaged in unfair or deceptive business practices in refusing to honor its agreement, purposely and deliberately causing delay and in otherwise interfering with Pillsbury’s effort to develop the Woodmont PUD.

Pillsbury is requesting a jury trial and damages and attorney’s fees totalling $22.5 million.

Asked to comment on the suit, Town Manager Kevin Smith responded, “The Town granted the approval for the (Market Basket) supermarket with the anticipation that the access road will be constructed, as it is important to the Town in terms of traffic mitigation.  The Town hopes the matter is resolved quickly by the parties and the anticipated development related to the access road and the Woodmont Commons PUD commences.”

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