Regal

Regal Cinemas bidder alleges Westborough failed to apply proposal criteria

Regal | from page 1 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.

“The defendants are the town and a rival developer whose proposal was chosen notwithstanding that it was objectively inferior to the plaintiff’s under the criteria which the town set forth in its request,” Ferris’ attorney Thomas Mullen wrote.

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. Mullen wrote 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 the wetlands over the site to the town. The company, Mullen wrote, also proposed to power the site through a solar farm, use LED lights, obtain LEED certification for the structure and install electric vehicle charging stations.

“LAX proposed nothing of the kind,” Mullen wrote.

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.

“Westborough 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.

The company alleged that it would suffer damages, including costs to prepare its bid, if Westborough continued through with the award of the purchase and sale to LAX Media.

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

It 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.

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