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Resort-versus-Northern Pass lawsuit heats up

Last modified: 10/19/2013 12:33:56 AM
The first major lawsuit filed against Northern Pass is heating up as both sides accuse the other of misrepresenting the facts and misremembering history. And a recent attempt by Northern Pass to settle the dispute failed when project officials offered too little money, according to one of the lawsuit’s plaintiffs.

Tom Mullen and Walter Lankau Jr., owners of Owl’s Nest Resort and Golf Club in northern New Hampshire, sued Northern Pass earlier this month, alleging their business is facing bankruptcy because sales tanked after the proposed hydropower line, which would run over the resort, was announced.

Late yesterday, Northern Pass officials responded via their project’s website (northernpass.us) saying they wanted to “set the record straight.” It’s the first response from project officials, who haven’t yet answered the lawsuit in court.

“Any allegation that the announcement of the Northern Pass project in late 2010 triggered the decline of Owl’s Nest real estate sales is simply wrong and has no basis in fact,” read the website post. “Publicly available data clearly shows that the resort has suffered the effects of a deep recession that began well before the Northern Pass project, significantly impacting the New Hampshire real estate market.”

The statement went on to say: “It is unfortunate that Owl’s Nest, like many others across our state and the rest of the country, has been impacted by this economic downturn.”

Mullen, a vocal opponent of Northern Pass from the start, and Lankau are seeking unspecified damages and a jury trial, according to their lawsuit filed in Grafton County Superior Court.

Northern Pass, a proposed hydropower line from Canada, through New Hampshire and into the New England energy grid, must still win state and federal approvals. But in their lawsuit, the Owl’s Nest owners allege the possibility of Northern Pass alone has been enough to bankrupt their golf resort, which sits in Campton and Thornton.

The resort, which includes residential units, a restaurant and activity center, was appraised at $23 million in February 2010, according to the lawsuit, about eight months before Northern Pass was made public. Now, the resort is $17 million to $18 million in debt and facing foreclosure, Mullen said yesterday.

Mullen disputed assertions from Northern Pass that his financial losses are due to the 2007 downturn in the economy, not the project. Mullen said the resort’s property sales were $3.59 million in 2008 and $3.19 million in 2009. In 2010, sales dropped to $461,800, he said, when two sales worth $2.5 million fell through.

The resort has had no sales since 2010, Mullen said.

“Our buyers are not anywhere near as sensitive to the state of the economy as the typical real estate buyer,” Mullen said. “They are usually not buying a place because they need a place. They probably already have a place. They can be discriminating.”

The location of the proposed Northern Pass line is also in dispute.

The proposed hydropower line would run within the existing power line corridor, but the towers would be much taller and more visible. Part of that existing corridor was relocated in 2007 to its current location through an easement signed by Mullen and Public Service of New Hampshire, a Northern Pass partner.

Mullen said yesterday PSNH asked him to relocate part of the corridor for its own needs, and that he never would have agreed had he known Northern Pass towers would be built within the clearing. He said PSNH led him to believe the corridor would contain only the kinds of shorter power line poles already there.

Northern Pass disputed that in yesterday’s post. Mullen came to PSNH seeking to relocate the corridor to accommodate his expansion plans, project officials said.

“This 2007 agreement expressly recognized PSNH’s right to construct and install additional transmission lines, poles, towers, and related electric transmission equipment and facilities within the power line right of way; a provision that Owl’s Nest was fully aware of,” the statement said. “In this lawsuit, the owners of Owl’s Nest claim that they were misled by PSNH about the terms of the 2007 agreement and its intended use. This claim is not only untrue, but is incredible in light of the clear language of the 2007 agreement.”

Mullen said yesterday that when Northern Pass officials learned he was considering a lawsuit, they offered to relocate the future Northern Pass line farther from the resort’s residences. Mullen said they also offered him and his partner a “not insignificant” amount of money toward their financial losses.

He declined to say how much he was offered but said it was far short of what they needed. Michael Skelton, a Northern Pass spokesman, said he does not comment on specific discussions with landowners.

“We’ve worked cooperatively with the Owl’s Nest for many years prior to this suit, and we have discussed with the owners the resort’s concerns with Northern Pass,” Skelton said in an email. “We remain open to continuing that dialogue to address legitimate concerns they may have with our proposal.”

(Annmarie Timmins can be reached at 369-3323, atimmins@cmonitor.com or on Twitter @annmarietimmins.)


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