Lawsuit threatened over Scolite deal (DOCUMENT)

Attorneys for Perry Street Companies, a conglomerate who unsuccessfully bid on the Scolite property in South Troy, are urging the Council to vote against the ordinance that would allow R.J. Valente to begin operating at the site.

According to the letter penned by James Barriere of Couch and White, the city modified the terms of the Request for Proposal after the open bidding process was complete for the “benefit of one bidder.” Perry Street Companies, which includes Warren Fane, Inc., is asking the Council shoot down the ordinance the Finance Committee approved by a 6-2 vote and put the entire project back out to bid or it will commence legal action. The Council is slated to address the matter at next month's meeting. 

“To us, it looks like a classic bait and switch where the original bidders, including our client, were asked to consider a proposal scope that has now been substantially enhanced for the benefit of one bidder,” the Match 26 letter states. “We do not need to explore the reasons why this occurred at this time, but it is clear that it did occur”

Berriere said the city extended three considerations to Valente that were not included in the original RFP during the public bidding process:

-The acquisition of additional property by eminent domain and the construction of a new access road.

-Allowing the winning bidder to put a 10 percent down payment on the property “rather than the purchase price delineated in its proposal. As an aside Berriere said it is a “benefit that we assure you any commercial developer would greatly enjoy and covet.”

-A “license” for the bidder to begin work at the site “with the apparent ability to abandon the site at any time before it obtains title.”

“These post-award concessions represent material and improper changes to the basic terms of the RFP. They violate public policy and destroy the fairness of the bidding process,” according to the letter. “The city is no doubt aware of the requirement that a procuring agency should be guided by the underlying policy of treating all bidders alike ‘so as to avoid the possibility of fraud, corruption or favoritism.’”

Here is the post I wrote about it after the Finance Committee approved it.

In In August, 2013, the city awarded the Scolite property to Valente and agreed to enter into “exclusive negotiations” with the company on how to develop the site. In June, 2013, Valente purchased the adjacent Bruno Machinery property for $750,000. In October, 2013, the city changed the zoning from commercial to heavy industrial at Valente’s request even though he did not yet formally own the property.

Earlier this month, the Finance Committee approved the ordinance that would grant Valente a license to operate the site with a $100,000 down payment on the company’s $1 million bid to purchase the site. The license, according to Planning Department Commissioner Bill Dunne, was necessary pending approval from the state Legislature, which could be a drawn out process.

Also, the city said it would spend some $9 million on building an access road along the waterfront in South Troy and take the adjacent Ludlow Valve property through eminent domain and give it to Valente.   

Perry Letter