Town Documents Show Kraft Group Doesn’t ‘Owe’ Foxborough Money for Sewer

Contrary to popular opinion among some Foxborough town officials, The Kraft Group does not owe the town $7.5 million – or any money for that matter – from a failed proposal involving the development of a waste water treatment facility for the town located at , according to town documents.

In 2007, the Kraft Group and the town of Foxborough successfully negotiated the development of Patriot Place and with it the town has received annual town revenue of $3 million.

However, five years and millions in revenue has not changed the perception of some town officials that The Kraft Group “owes” Foxborough $7.5 million for what they consider to be false promises of a waste water treatment facility on Route 1 as part of the 2007 agreement for 12 liquor licenses and the development of the shopping, dining and entertainment complex.

“From what I can see and from things I’ve read, I don’t think we’ve gotten the full mitigation from the original 12 liquor licenses,” said selectman Virginia Coppola at Tuesday’s meeting. “So as far as I’m concerned, I’m not interested in looking to the future and making negotiations for the future until the past negotiations have been dealt with. That’s where I stand.”

But does The Kraft Group really owe the town anything in mitigation from the 2007 agreement of Patriot Place?

In terms of the $7.5 million that was to be used to construct the waste water treatment facility in town, the short answer, according to town documents, is no.

Jeff Cournoyer, spokesman for The Kraft Group, said when the company worked in partnership with the town to develop Patriot Place it made promises to “attract world-class healthcare, lodging, dining, entertainment and shopping while adding millions annually to the town’s revenue base.”

And as seen by the $3 million annual town revenue Foxborough receives from Patriot Place, The Kraft Group has delivered on that promise.

“At the time [of the Patriot Place proposal in 2007], we projected $2 million in new tax revenue,” Cournoyer said. “In reality, Patriot Place contributes $3 million annually. Collectively, The Kraft Group and Patriot Place’s tenants currently contribute more than $6 million annually to the town’s budget.”

 As for what Coppola and other town officials keep referring to as mitigation still owed and negotiations from 2007 remaining unsettled, Cournoyer disagrees, saying The Kraft Group has kept its end of the 2007 agreement with the town and exceeded its financial expectations.

“In 2007, we committed to building a water treatment facility if the town asked us to, and at the town’s request provided a five-year window for the town to decide if it wanted the facility,” said Cournoyer. “On more than one occasion the voters chose not to go that route. The continued insistence by some town officials, disregarding the written agreement, that we should simply give Town Hall the funds we would have used to construct that facility has no legal or factual basis. More importantly, those statements contribute nothing to what otherwise could be a productive discussion between the Town and The Kraft Group about moving forward as business partners, something both sides have expressed an interest in.”

According to the 2007 Memo Of Agreement (MOA) between The Kraft Group and the town of Foxborough, the town had a five-year option – as mentioned by Cournoyer – to “expand its existing waste water treatment facility, as upgraded for the Patriot Place project.”

The town requested The Kraft Group “construct a new municipal waste water treatment facility and certain water and sewer system improvements.”

For The Kraft Group to construct such a facility, the town agreed, according to the 2007 MOA, it would have to “obtain required permits and approvals (including, without limitation, local zoning relief and such similar governmental authorizations) to construct necessary waste water infrastructure on town-owned land associated with the improvements pursuant to the terms of the agreement.”

That agreement included obtaining all required appropriation, borrowing authority and betterments to allow financing associated with the cost of such an infrastructure and provide written notice of approvals.

Once The Kraft Group received the town’s Approvals Notice it would proceed to “permit, design and construct on land under its control and at its sole cost and expense, the wastewater treatment facility.”

The project never got that far because the town never issued an Approvals Notice to The Kraft Group. Why? Because the town’s voters rejected the proposal at the June 2007 Town Meeting.

Section 8 of the 2007 MOA states The Kraft Group’s obligation to the town to build a waste water treatment facility would be terminated if the following occurred:

• The town does not obtain all necessary zoning relief, permits and/or approvals to construct the town infrastructure associated with the improvements …
• The town does not receive a favorable outcome from community polling by the town to allow the imposition of betterments for connection of residences to the new wastewater treatment system …

Furthermore, the 2007 MOA states The Kraft Group’s obligation in its agreement with the town is subject to “approval of Article 18, as set forth in the Foxborough Town Meeting Warrant for May 14, 2007 Annual Town Meeting at Town Meeting and the subsequent vesting in the Foxborough Board of Selectmen of the full legal authority to issue all the liquor licenses pursuant to the terms of Article 18 without amendment; the Town obtaining all required approvals and the Town issuing the Approvals Notice within five years of May 14, 2007; There not occurring a natural disaster, war or cultural strife that prevents the material commencement of construction of any buildings in the [Patriot Place project].”

While Article 18 was approved at the 2007 Town Meeting, the agreement between the town and The Kraft Group was terminated when the town did not submit the Approvals Notice to the company by May 14, 2012, as stated in Section 8, item “C” of the MOA: “In the event any of these conditions precedent set forth above do not occur, this agreement shall terminate and all obligations of the parties shall be of no further force and effect.”

Those who believe The Kraft Group still owes the town the $7.5 million scheduled to be used for the development of a waste water treatment plant may point to this statement in Article 18 of the 2007 Town Warrant Report: “Patriot Place developer will expand, build and ‘gift’ to the town a wastewater treatment facility, related water and sewer connection lines, and leaching fields allowing for much needed additional town sewer capacity as identified by the Town’s Comprehensive Wastewater Plan. The [facility] will cost the developer $7.5 million. Additionally, the developer has agreed to pay the town’s standard sewer fees after the Town assumes ownership of the wastewater treatment facility.”

Sounds like The Kraft Group does owes the town either a wastewater treatment facility or $7.5 million, afterall, right? Wrong. … Here's the other part of it, as presented at the 2007 Town Meeting.

In a statement issued by the town’s 2007 Advisory Committee under Article 18 in the Town Warrant Report, the three members who opposed the article said the following: “If taxpayers are motivated to vote ‘yes’ on this article to get the benefit of the sewer arrangement, they might be disappointed because it is contingent upon approval of other warrant articles at a Town Meeting held after this May. Put another way, the major portion of the consideration ($8.5 million) for supporting this article could prove illusory (since the town voters might not accept the sewer agreement). In such a case, Patriot Place would still be entitled to 12 liquor licenses and the town would be entitled to only the public safety mitigation and waiver of excess Patriot Place permitting fees (that is, Patriot Place will not make an $8.5 million cash payment to the town in lieu of what it would have spent on the sewer plant).”

And as it turns out, that’s precisely what happened. Article 18 passed May’s Town Meeting with a 96 percent approval rating. However, the warrant articles (5 and 6) for the waste water treatment facility were rejected by voters in the June 11, 2007 Town Meeting.

In the five years that followed, the town was never able to submit the required Approvals Notice to The Kraft Group by the May 14, 2012 deadline and the agreement was officially terminated.

One of the Ad-Com members that opposed Article 18 in 2007 was selectman Lorraine Brue, who at Tuesday’s meeting said she would favor future negotiations with The Kraft Group only after the company addressed what she believes is still owed to the town from 2007.

“[The negotiation] goes back to the $7.5 million that had been promised for waste water treatment/expansion and infrastructure at the time,” Brue said. “I feel that is still outstanding there and that’s tied to the first 12 licenses.”

But according to Ad-Com’s evaluation of Article 18 in 2007, the money will not be “gifted” to the town as a cash payment– only used to develop the waste water treatment facility.

So why are Brue, Coppola and other town officials still referring to $7.5 million as being “owed money” to the town by The Kraft Group as a result of the 2007 agreement that “fell short” of what they believe was promised to the town as a condition of 12 liquor licenses and the development of Patriot Place?

Board of Selectmen vice chair Mark Sullivan says it’s a result of perception among the townspeople.

“Whether [we] had a contract or we didn’t have a contract, perception in the town was to a higher expectation of what we would receive [a waste water treatment facility] for those 12 liquor licenses,” Sullivan said. … “It is the perception of the people in the town of Foxborough that there had been some shortfalls [in negotiations] … if somebody promises you that they’re going to do something and then you rely on that and it doesn’t happen in the end then it doesn’t pay the bills. Promises don’t pay the bills. We don’t have anything right now; we don’t even have a promise [from The Kraft Group].”

That perception Sullivan refers to, however, does not coincide with the facts presented at the 2007 Town Meeting – both in the MOA and in the Town Warrant Report, as previously mentioned.

Selectman Lynda Walsh referred to those same facts Tuesday.

“Folks need to realize that we do go to Town Meeting and it comes down to the vote of the people,” Walsh said. “Just as we did back in 2007 when we as a town decided we did not want a water treatment plant and we didn’t want to accept that at all. We had several years until this year and we kept getting closer to that deadline saying ‘we need to be talking about this' and 'what are we going to do here’ and then the deadline came on May 14, 2012 and we decided we didn’t take [The Kraft Organization] up on the water treatment plant [offer].”

Walsh said while she isn’t defending The Kraft Group, she believes Foxborough isn’t owed $7.5 million and for the town to think otherwise is a waste of time.

“We had an opportunity to have a waste treatment plant up there, we just decided not to. Call it what it is.”

Another reason some town officials are caught up on the $7.5 million from the 2007 negotiations is because Foxborough needs that amount of funding to join the tri-town waste water treatment facility project with Norton and Mansfield.

The Kraft Group has said it is open to negotiating some type of agreement involving the $7.5 million needed for expansion in the town's sewer capacity if the town will acquire eight additional liquor licenses from the state to further develop Patriot Place.

Both The Kraft Group and the town showed a willingness to sit down at the table this summer and move forward as business partners.

During public negotiations last month between The Kraft Group and the town’s four-member public advisory committee, Kraft representatives shared some of its ideas for possible expansion along Route 1 and at Patriot Place. Potential plans include a bowling alley with an entertainment license – similar to Kings in Dedham, a Mexican restaurant and a Japanese hibachi steakhouse at Patriot Place while potential development along Route 1 would include 300 units of multi-family housing, which would require zoning changes, a train station at Gillette Stadium and a new hotel.

On Tuesday, the Board of Selectmen received an update on the status of those public negotiations from Walsh, who is a member of the public advisory committee and , the board requested and Patriot Place expansion before any negotiations involving liquor licenses and $7.5 million begin.

In the meantime, the Foxborough Board of Water and Sewer Commissioners will meet Monday, Sept. 10 at 4 p.m. in the Water Department Office to discuss in executive session The Kraft Group’s billboard sign proposal and is expected to open to the public and continue review The Kraft Group’s billboard sign proposal with Town Manager Kevin Paicos and Town Counsel Richard Gelerman.