Pittsfield could pay Spectrum $76K for rent

Friday September 7, 2012

PITTSFIELD -- The city could pay Spectrum Health Systems up to $76,500 should the company end up moving out of its Summer Street space and owing rent on it, according to their legal settlement reached last month.

The $76,500 figure represents 18 months of Spectrum's rent payment at the Berkshire Nautilus building, 42-46 Summer St. The pending liability hinges on the city and Spectrum agreeing on new a location elsewhere in the city for its proposed methadone clinic, according to the Aug. 14 settlement in federal court.

Last month, the city announced the company would consider moving the center into a Berkshire Health Systems facility if and when one becomes available.

Since July 2011, Spectrum has been met with a public outcry in its attempts to locate a methadone clinic in Pittsfield. It has settled on Summer Street, its first choice, after a proposal for Stoddard Avenue was scuttled and its lawsuit against the city was settled.

The pending liability, which is detailed in the legal settlement, would be in addition to the $100,000 check the city paid to Spectrum on July 13.

Whether Pittsfield ever will have to pay the $76,500 sum, some portion of it, or none of it, remains to be seen. If Spectrum did move and was responsible for rent payments at Summer Street, the City Council would have to approve any liability payments on behalf of the city's taxpayers.

Mayor Daniel L. Bianchi and Pittsfield assistant city solicitor Darren Lee maintain the liability only would kick in given this specific set of circumstances. Even then, Bianchi and Lee said it's possible the city could mitigate its risk by finding a new tenant for the Summer Street space if Spectrum left it.

Meanwhile, Spectrum's methadone clinic on Summer Street could be operational by the end of next month, city officials have said. The company has a five-year lease there. Pittsfield businessmen James V. Ram ondetta and Stephen L. Kisiel own the Summer Street building.

In an interview this week, Bianchi said he doesn't think the city will end up paying rent reimbursement costs to Spectrum, which is why he didn't disclose that aspect of the settlement last month.

"The fact is that we're not anticipating that to happen," the mayor said.

He went on to say it would be "terribly misleading to suggest that the city of Pittsfield is exposed to $76,500 that we're definitely going to have to pay."

"There's a lot to go to get to there," Lee said. "So it's not a hard liability. Could it be a pending liability? Absolutely. But it's not a hard liability."

City councilors Barry Clairmont and Jonathan Lothrop told The Eagle the mayor should have clarified to the public the $76,500 pending liability when he announced the legal settlement with Spectrum on Aug. 14.

"Why do you announce the settlement agreement and leave half of the agreement out?" Clairmont said.

Prior to the settlement, the council suggested the mayor settle the suit for $100,000 if Spectrum stayed on Summer Street, but also greenlighted a $250,000 settlement if the company picked a different location, such as a property owned by Berkshire Health Systems.

This week, Bianchi explained that the ultimate $100,000 settlement and $76,500 relocation liability is a hybrid of the two options.

According to Lee, the $76,500 cap in the settlement limits the city's liability to 18 months of rent. For instance, if Spectrum moves and ends up owing 24 months of rent on Summer Street, the city commits to reimbursing the company on just 18 of those months. Conversely, the city would pay only six months if Spectrum owed on six.

In a recent interview, Berkshire Health Systems President and CEO David Phelps didn't rule out the possibility that a methadone clinic could be located on Conte Drive at some point.

"If folks think it would be a good place for a clinic, we would entertain that," Phelps said.

The settlement agreement names Berkshire Health Systems as a potential landlord in a relocation scenario.

For the time being, a timeline for Spectrum to move to a Berkshire Health Systems property appears to be open-ended.

Bianchi this week said the city isn't actively looking to find a different site for the clinic.

Last month, Bianchi said the $100,000 payment was for what he called the city's attempt to "illegally block" a building permit for Spectrum in 2011.

The City Council was briefed on terms of the settlement, including the liability, at a July 3 executive session meeting. The minutes of that meeting recently were unsealed.

At that meeting, Bianchi, city solicitor Kathleen Degnan, assistant city solicitor Lee, and Pittsfield Director of Administration Donna Mattoon presented the terms of the settlement to the council: the $100,000 payment, the issuance of a building permit to Spectrum and certificate of occupancy, the potential $76,500 payment for relocation, and Spectrum's release of the city of all liability.

The City Council never formally voted on the legal settlement, but in June it did vote on the city's budget, which contained the $100,000 settlement with Spectrum. As a pending liability, the $76,500 isn't in the city budget.

Unlike the $100,000 already paid to Spectrum, Councilor at large Melissa Mazzeo emphasized the $76,500 payment only kicks in if the clinic leaves Summer Street at the request of the city.

"We're only asking them to move if they want to," Mazzeo said. "We're trying to mend fences with Spectrum."

Mazzeo said the potential rental payout was a way to deal with the citizen uproar over the clinic being near other businesses or residential areas.

"Nobody wanted it on Summer Street, and nobody wanted it on Stoddard Avenue," she said. "This is a way to try and appease the residents."

Since the settlement was announced last month, Maz zeo said the citizens' furor over the clinic's location has died down, an issue no longer on their radar screen.

Eagle staff writers Tony Dobrowolski and Dick Lindsay contributed to this story.

To reach Kevin Moran:
or (413) 496-6215.
On Twitter: @iamberkshire


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