NORTH ADAMS — Four years after it was first filed, the lawsuit brought by the Freight Yard Pub against the North Adams Redevelopment Authority finally will be settled.
The three-member redevelopment authority unanimously voted on Wednesday to borrow $160,000 through Berkshire Bank and draw $125,671 from its reserves to pay the court-ordered judgment.
"This has been a long and hard process, and we are relieved that this matter is now resolved," said Christopher Hennessey, the attorney representing the Freight Yard Pub.
The restaurant, which operates under the company name Bay State Hospitality, was awarded a $300,000 judgment in 2014 after it claimed state construction to the nearby Hadley Overpass unfairly restricted its customers' access to parking, negatively affecting the business.
As the pub's landlord at Western Gateway Heritage State Park, the Redevelopment Authority was held responsible for the $300,000 judgment — less $83,215 in rent that restaurant had withheld. Interest has since built on the total judgment amount.
As part of the settlement agreement, the restaurant's next year of rent — $44,666 — will be placed into an escrow account. The escrow agent will be Berkshire Bank, which will direct debit from the escrow account $3,666 monthly — of which $2,224 will go toward the authority's loan payment.
The unsecured loan taken out by the redevelopment authority has a term of seven years and an interest rate of 4.5 percent. The monthly payment will be $2,224.
By drawing on its reserves to pay the settlement, the authority is left with only about $30,000 in the bank. Northern Berkshire Community Television, one of its major tenants, is leaving for a new headquarters on Union Street this year.
Mayor Richard Alcombright noted that despite the monthly loan payment, the authority will be in a better position with the lawsuit settled because it can begin receiving the restaurant's rent for the first time in several years.
"We'll have a revenue stream of probably $4,000 a month after this is all said and done ... along with $30,000 in the bank, and it's not going to be easy but we'll just have to manage it," Alcombright said.
The basic terms of the borrowing plan and settlement are largely similar to what Alcombright brought last year before the City Council, which rejected it. Under the new plan, the Redevelopment Authority is the borrowing entity and held responsible for the loan's payment; Alcombright's initial plan proposed the city borrow the money.
Board member Michael Leary asked what the authority's collateral would be if it defaulted on the loan, but City Solicitor John DeRosa said it is unsecured.
"Berkshire Bank was very gracious in lending us an unsecured loan," Alcombright said.