Groton Council Excludes Blue Lotus from Mystic Oral School Mediation

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GROTON — Blue Lotus Group, the real estate group that agreed to buy Respler Homes LLC, will be excluded from mediation sessions concerning the Mystic Oral School development agreement between the town and Respler Homes. 

That was the decision, by consensus, of the Town Council Committee of the Whole on Tuesday night during a two-hour-plus executive session. 

“Just to [give] a quick update to the public about where we’re at concerning the Mystic ed center, there was consensus, unanimously, to consider to continue mediation, but to not allow Blue Lotus to continue in those mediation sessions,” said John Burt, town manager, after the council returned to regular session. 

The town initiated mediation proceedings with Respler Homes LLC last October to terminate the development agreement with the developer to build 750 housing units plus commercial spaces in “Mystic River Bluffs” at 240 Oral School Road. Jeff Respler, principal of the company, later purchased 16 adjacent acres and increased the housing units to 931. 

The state owns the 77-acre site — 40 of which are developable — and Respler had an option to buy the property for $1, but the state did not renew the lease.

Respler needed a zoning change providing substantially increased density to build the apartments, but the Planning and Zoning Commission reached a consensus in June that only moderate density, at the most, would be allowed. 

The town claims that Respler did not provide a development plan and architectural renderings showing locations of proposed buildings, parking areas, sidewalks and utilities, nor the needed changes to public roads. 

Respler’s attorney disputed the town’s claims and said the developer had fulfilled the obligations of the agreement and was waiting for the zoning change to proceed. 

The shift in the development agreement to Blue Lotus Group as the buyer of Respler Homes as of January — without the state vetting process — was a “significant departure from the proposal we received from Respler Homes, LLC, in response to our 2018 Request for Proposals,” said David Lehman, commissioner of the Department of Economic and Community Development, in an April 22 letter to Respler. 

Lehman said the diversion from the original Request for Proposal response was “concerning” and that the state agencies needed for approvals may not “accept a new set of principals and a project not reviewed or vetted through the RFP process when and if approval is sought.”

In an April 30 letter to the Town Council, the attorney for Mystic Oral School Advocates, a group of neighbors who are concerned about the potential development, said it was “beyond comprehension that the town is now engaged in a process that effectively will allow Respler to select the exclusive development of the property.” 

Attorney Edward Moukawsher said that the town had abandoned the terms of the development agreement and the most logical, appropriate and legal process of seeking a new developer and project through a request for proposals…”

“We request the Town Council to direct the Town Manager and attorneys representing the town to cease their dalliance with Blue Lotus Group and any other entities as a substitute for Respler and confine their efforts to Respler’s default and termination,” he wrote. 

At Tuesday’s meeting, town attorney Eric Callahan said the mediation sessions began in March and the next one is on May 27. 

Town Manager Burt asked the council if they wanted to continue mediation and whether Blue Lotus should continue to be allowed to participate. 

During discussion, Councilor Rachael Franco asked about the potential liability to the town of abandoning mediation. 

Callahan advised the Council that the development agreement contained a provision requiring the completion of mediation before other measures could be taken. 

“You can’t prematurely just elect to terminate that process because there’s a contractual duty to participate,” he said, adding that negotiation and strategy could be discussed in executive session but not publicly. 

Franco expressed concern about transparency and said it was nearly impossible to make a decision without full information. 

“This is unprecedented on what the council has ever done. When the attorney comes to us and says we need to go into executive session for negotiation and strategy and we are here to protect the taxpayers in our town against litigation — and we’re not even getting all of the information and we’re going to make decisions.” 

After an initial vote not to go into executive session to discuss the matter, the council voted to proceed into executive session.