The developer building the $30 million Haverhill Heights complex downtown has agreed to pay $112,666 he owes the city by the end of the month, after missing payments.
The overdue payments appear to have been caused by an invoice error that forced Mayor James Fiorentini to re-examine the city's collection processes.
City Economic Development Director William Pillsbury said developer Sal Lupoli called Pillsbury on Tuesday of last week to say the $112,666 payment for 2020 — originally due June 15, 2020 — will be paid in three installments starting last week. That will bring Lupoli's account up to date, after he sent in his 2019 payment for the same amount two weeks ago.
The Haverhill Heights project's financing came under scrutiny two weeks go when City Councilor Colin LePage realized Lupoli was behind two mortgage payments in annual installments on land he purchased from the city to build the 160 Merrimack St. complex. LePage said he originally emailed Fiorentini and other city officials about the issue June 26, but decided to go public with the information when he did not receive a response.
"I work for the taxpayers of Haverhill. I informed people two weeks earlier and never heard back," LePage said at last week's City Council meeting. "I'm not against this project by any means, but I want things to be done right."
LePage said he was prompted to look into the Haverhill Heights financing after an unrelated large commercial-residential development involving land owned by the city — the Ornsteen Heel project along the Merrimack River in Bradford — came before the council last month.
Shortly after that, LePage suggested on July 8 that Lupoli missed the two payments. Lupoli, however, told The Eagle-Tribune that he never received a payment invoice from the city.
"Perhaps it was a mistake on their part. Maybe we should have known the payment was due," said the developer, adding it was never his intention to miss payments.
At last week's City Council meeting, Fiorentini said there were "mistakes on both sides" and that the incident has allowed the city to tighten up their collection policies.
"We should have sent them an invoice. I'm the CEO of the city. I take full and complete responsibility for that," the mayor said. "On the other hand, this is a big company and frankly, we shouldn't have to send them an invoice. They know when the bill is due."
Fiorentini, said the city's current accounting system involves contracts being indexed and placed in a drawer. Now they'll be digitized and uploaded for residents' access. Residents will also be able to see that all contracts, including Lupoli's, will now pay a 5% late fee, as voted on by the council, the mayor said.
City Auditor Chuck Benevento is investigating if any other payments to the city are late, he said at last week's council meeting
Councilor Timothy Jordan praised LePage for raising the issue and the city for tightening up its collection policies. Jordan said he has heard from residents concerned Lupoli may have received special treatment during the payment process.
"If not for Councilor LePage for finding this, the money still may have been overdue," Jordan said. "There is a legitimate concern from residents (if) a person is getting special treatment that they're not. I'm glad to hear that if you're late, there's going to be interest due. That there's not going to be special treatment for a private developer versus a regular resident."
Eight of the nine councilors last week voted to have the council's Administration and Finance Committee review ways the council is kept up to date on contracts and payments to developers once agreements are signed. They also want to be made aware if and when contracts are revised, the group said.
Councilor Michael McGonagle abstained from the vote given his history as a downtown business owner, he said. Even though this matter was a procedural one, McGonagle said he has made it a practice to abstain from votes related to downtown projects like Haverhill Heights to avoid any appearances of a conflict of interest.
Councilor Joseph Bevilacqua was asked by Council President Melinda Barrett if he wished to abstain from the vote because his son works for Lupoli Companies, but Bevilacqua declined to do so and voted in the affirmative. According to Secretary of State William Galvin's office, Lupoli is also listed as the Chairman of the Board for Bevilacqua's Merrimack Valley Chamber of Commerce.