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Little Neck rift may yet reach trial

Settlement challenged by group of residents

By Kathy McCabe
Globe Staff / December 25, 2011
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Residents opposed to a $32.5 million settlement that allows the sale of Little Neck, a summer cottage colony owned by a Colonial-era land trust set up to benefit the Ipswich public schools, have asked a probate court judge to block the agreement, saying it does not do enough to protect public school children.

A motion filed in Essex Probate Court in Salem, where a trial to determine if Little Neck could be sold began Dec. 12, also seeks to have the trial continue and for residents, led by Douglas J. DeAngelis, to be allowed to take part as defendants.

The School Committee, by agreeing to a settlement to end the 351-year-old land trust, did not represent the residents’ interests, court papers assert.

“Little Neck is an asset of the town,’’ Mark E. Swirbalus, a lawyer representing the residents, said in an interview. “Whatever decisions made about this land should be made with public input and public accountability.’’

If finalized by the court, the settlement would end a decade-old legal drama that has pitted town officials against the Feoffees of the Ipswich Grammar School, a board of trustees that manages Little Neck, a 27-acre peninsula dotted with cottages rising over the mouth of the Ipswich River and Crane Beach.

In 1660, merchant William Paine left the land to the town in a private trust, with instructions that it never be sold, and all proceeds collected from rent were to benefit the town’s schools.

A lawyer for the feoffees said the settlement meets the intent of Paine’s will, and provides a more stable cash flow to Ipswich schools.

“It’s great for everyone,’’ said William Sheehan. “What you’ll have now, is an endowment. . . . And there are no longer any headaches associated with the ownership of the real estate.’’

But the settlement also prompted criticism from town officials, who said the $32.5 million price tag is not enough for prime waterfront property. Separate appraisals prepared for the School and Finance committees placed the value of Little Neck land at $42 million.

“We were trying to evaluate the true value of Little Neck,’’ said Jamie Fay, a member of the Finance Committee. “It’s pretty well known that expert appraisers came back with a substantially higher value’’ than $32.5 million.

“There is no question in my mind that this asset will continue to appreciate in value,’’ said Selectman William Craft. “Now, instead of that value benefiting school children, it will be passed on to’’ Little Neck cottage owners.

The settlement also did not sit well with some parents of students.

“It’s a serious concern to many, many people in our town,’’ said Catherine Lavoie, mother of an Ipswich High freshman. “We want to take action and do whatever we can to save this [land] trust.’’

Little Neck is a community of 167 cottages owned by residents who rent the land from the trust. Since 2006, residents and the Feoffees have been in a legal dispute over how much rent should be charged. A separate lawsuit on the issue is pending in Superior Court. Since the lawsuit was filed, Ipswich schools have not received any payments from the trust.

But the settlement also would end that dispute. About $3 million in back rent, placed in escrow, was added to the sale price, boosting the original offer of $29.1 million to $32.5 million, lawyers said.

After expenses and debt, an estimated $25 million would be put into an endowment fund, the income from which would benefit the public schools. A new seven-member Feoffees board - made up of two members each from the Board of Selectmen and School and Finance committees, and one chosen by Town Meeting - would oversee the fund.

Ipswich residents also would have access to Pavilion Beach, a popular swimming spot now owned by the Feoffees.

The settlement has been approved by Judge Mary Ann Sahagian and the state attorney general’s office, which oversees charitable trusts. But it cannot be finalized until a decision has been made on the residents’ request to intervene, Swirbalus said.

“I will be seeking a hearing date soon,’’ he said last week.

Jeffrey Loeb, chairman of the Ipswich School Committee, said the settlement was the surest route to end litigation.

“We came to the conclusion that the proposal, in its entirety, was better than what we were going to end up with at the end of the trial,’’ Loeb said. “We had to get the best deal we could for the town.’’

A majority of the seven-member School Committee voted in an emergency meeting on Dec. 17 to consider the settlement. But not all members are happy about it.

“I’ve always believed that Little Neck is a town asset and that the town as a whole should determine its fate,’’ said Jan Bauman, a School Committee member elected last spring.

DeAngelis, the lead plaintiff in the motion to continue the trial, said he is determined to get a better outcome.

“It’s not over,’’ he said. “We need to get our opinion in front of the court. . . . Our primary goal has always been to get this out in the open, so that the town can decide the way forward.’’

Kathy McCabe can be reached at Follow her on Twitter @GlobeKMcCabe.

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