The developer who designed a six-story condo complex for S. Donald Sussman is suing the fabulously wealthy hedge fund manager and Maine media mogul, as well as the attorney representing Sussman in the deal, on grounds that he’s been stiffed for work he did on the project before Sussman pulled the plug on it in January.
Kevin Bunker, of the Portland-based firm Developers Collaborative, is seeking more than a half million dollars for work he did on The Newbury Lofts, a project planned for the India Street neighborhood at the foot of Portland’s Munjoy Hill, where Sussman and his wife, Democratic U.S. Rep. Chellie Pingree, have a residence.
Neither Bunker nor Tom Federle, the attorney Sussman hired to represent him in the development deal, returned my calls seeking comment. Bunker’s attorney, Chris Chandler, declined to elaborate on the case.
Documents on file in Cumberland County Superior Court reveal that Sussman’s approach to the $8 million project was remarkably cavalier. In a nutshell, Sussman allowed the Newbury Lofts condos to be designed, vetted by neighbors, approved by the city, listed for sale and reserved, with money down, by more than a dozen hopeful homeowners without having a signed agreement to actually build them or a determination that the project was even worth building.
In the meantime, Federle and Bunker haggled over fees, and Sussman threw wrenches into the plans — dithering over whether to “fast track” the project and courting a new architect in the middle of the process, while keeping one eye on other development opportunities in the area.
In addition to the half million or so Bunker is seeking, court documents include invoices for more than $525,000 due to others who worked on the project, including approximately $275,000 to Archetype, the Portland architecture firm. There is no indication any of those bills have been paid. Archetype principal David Lloyd, whom Sussman seemed willing to ditch in favor of an architect pal who expressed a passing interest in moving to Portland, did not return my call, either.
According to court documents, Federle asked Developers Collaborative to create a proposal for the project in November of 2011, and the parties signed a letter of intent to work together last March. Bunker claims his firm finished “pre-development” work on the project by May, including an analysis of its financial feasibility, and that Federle gave the project a green light based on that work. Federle denies knowing the pre-development work was done or approving the project based on a feasibility analysis, but — amazingly — he didn’t put the brakes on it, either.
In an email to Federle last June, Bunker wrote that though they had initially agreed to “speculate” on one another while they “built up a relationship,” he added, “I think we’ve done that, so it is not appropriate for me to be still ‘working on spec’ for much longer.”
“I don’t think your risk is beyond negligible,” Federle replied, “as neither Donald nor I would leave you in the lurch.”
So Bunker kept working on the project last summer, without a signed contract. As detailed in emails and text messages contained in the court filing, Bunker and Federle bickered during those months over how much each stood to make on the deal and how much risk each was shouldering. Bunker claims that Federle insisted he accept a deferred development fee “at the low end” of the “acceptable range” (5 percent of the development costs) so Federle could make a profit, too. Federle denies this.
“I have no interest in being at risk if you aren’t,” Bunker wrote in an email to Federle in August. “That was what made a ridiculous request [for a deferred fee] palatable in the first place.”
When the Portland Planning Board approved the condo project last September, Bunker submitted an invoice to Federle for $175,000. But Bunker still had no signed contract, and as far as Federle was concerned, it had still not been determined that The Newbury Lofts were worth building. Sure enough, Sussman subsequently shelved the project, though court documents contain nothing to indicate why he or Federle believed it would not be successful.
This summer will mark five years since Sussman bought a residence in the India Street neighborhood and turned it into a luxury crash pad for he and Pingree to use when they’re in town. Meanwhile, most of the other properties he bought in the neighborhood remain vacant and dumpy.
Sussman is behaving like an absentee slumlord. He needs to either get serious and build his condo project or sell his empty buildings to homeowners who would gladly fix them up and live there. Money is obviously not an obstacle.