Agency in $9.7m buyback

The developer built one road, improved another, and installed lighting and utilities. But the buyback provision was not part of the original 2004 agreement it had with the agency.

The money is the first installment of an $81 million reimbursement package that the public agency quietly entered into with the developer in 2008.

Critics are asking whether the developer is getting too good a deal, and question why a public agency is paying a private developer so much for a property that was initially provided by the federal government for free.

“Developers usually have to put that stuff in, and they have to pay for it all. No developer gets their infrastructure paid for by the town,’’ said Mary Parsons, a former Rockland selectwoman who served on the base redevelopment project’s Citizens Advisory Committee until it was disbanded in 2007.

South Shore Tri-Town Development Corp. plans to issue $15.2 million in bonds, in part to buy Shea Drive and Memorial Grove Avenue from LNR Property Corp., a Miami Beach real estate company that has been working to redevelop the base since 2002.

The original agreement between South Shore Tri-Town and LNR did not specify that LNR would get reimbursed for roads and public infrastructure. But in 2008, that agreement was amended, and Tri-Town agreed to pay LNR up to $81 million for such improvements.

Kevin R. Donovan, chief executive officer of Tri-Town, said the bond offering is an important milestone in the ambitious plan to convert the former base into SouthField, a new community that would include 2,855 homes, offices, restaurants, retail shops, a golf course, turf athletic fields, an Olympic-size skating rink, and a movie studio complex.

“It shows that the credit markets are loosening up, and proves that South Shore Tri-Town has the ability to move forward with the plan,’’ he said.

The project has faced several delays, and obtaining financing has taken longer than expected. South Shore Tri-Town, which functions as the municipality at the former base, has not yet sold any bonds or notes to support the SouthField project. This offering would be the first.

Meanwhile, LNR Property Corp., the master developer, has been dealing with its own problems. Last November, Standard & Poor’s lowered its credit rating from B- to CCC. (Anything below BBB is considered a junk bond.) On Jan. 14, Bloomberg News reported that LNR had hired advisers to restructure $1 billion in debt and prepare for a possible bankruptcy filing. LNR officials declined to comment on that report, but have insisted they are committed to the SouthField project. On Thursday the firm paid $800,000 in taxes to Tri-Town, said Kevin Chase, LNR’s northeast region vice president.

Much work remains. The Navy still owns 836 acres of the base, located in Abington, Rockland, and Weymouth. LNR would like to obtain that land at no cost, then sell lots to homebuilders and developers.

Tri-Town plans to sell $15.2 million in bonds in the next few weeks, with $9.7 million going to LNR to cover the costs of building Memorial Grove Avenue and improvements made to Shea Drive, including sidewalks, landscaping, lighting, and water and sewer lines. The mile-and-a-quarter of roadway is located on property originally acquired by Tri-Town from the Navy at no cost. In 2006 South Shore Tri-Town transferred 324 acres to LNR. The price tag for the new-and-improved Shea Drive is $3.5 million, and for Memorial Grove Avenue $6.2 million, said Donovan. The rest of the money raised would be held in a reserve account and used to pay off debt service if needed.

Critics such as Parsons have questions. She said South Shore Tri-Town was created to oversee the base redevelopment and maximize the fiscal benefit to the towns of Abington, Rockland, and Weymouth. “How are they maximizing the benefit if they’re doing bonding for the developer and paying for their infrastructure?’’ she asked.