"New Downtown" Developers Facing $125,528 Fine From Building Department

A mixed-use development on Sparks Avenue, dubbed Nantucket’s “New Downtown,” is facing a $125,528 fine for failing to obtain required construction permits. Its developers want the Select Board to waive the fine.

According to an email from Nantucket building commissioner Paul Murphy, the fine was levied on development company Poseidon Development after it began erecting steel framing even though it had only obtained a foundation permit.

“I am required to enforce the provisions in the fee schedule which is set by the Select Board. I had no choice but to assess the fine as I have done on many prior occasions,” Murphy wrote.

Two of the men behind the project and Poseidon Development are Chris Fiumara and Daniel Najarian, the co-founders of the Boston-based Crowd Lending Inc., a commercial real estate lender. Property records show their partners include Jared Gerstenblatt and Christopher Grimaldi, managing partners of the New York brokerage firm Chimera Securities. Together, they spent $10.75 million in 2021 to purchase the property previously home to The Downyflake restaurant and three surrounding parcels on the west side of Sparks Avenue.

Fiumara, who has been the primary spokesman for the project, did not return requests for comment from the Current.

Kelly Weingold, an attorney for the project, wrote in a letter to the Select Board that the developers had applied for a permit five weeks before the fine was issued and were advised that it would be returned in about two weeks. Weingold implied that the permit was not returned in a timely fashion.

“We planned our construction schedule around this anticipated timeline, while also accounting for the affordable housing requirement to complete construction within 18 months of permit issuance,” she wrote. “Given the project’s affordable housing component and the significant financial impact of the fee, we respectfully request that the Select Board consider waiving the late filing penalty.”

Murphy claims that the developers did not wait five weeks before commencing construction, and that “had the applicant indicated to me when they filed the application that they were on a tight schedule I could have accommodated them, but they did not.”

The original permit was $31,382. The fine is set at four times that amount. According to a memo from town of Nantucket operations administrator Erika Mooney, the developers asked for the entire fine, including the initial fee, to be waived.

The request comes at an interesting moment: the Select Board has made cutting spending a top priority, going as far as to examine individual line-item capital requests from town departments, such as vehicle requisitions. Some of these expenditures are smaller than the fine Poseidon Development would have to pay. As the Select Board searches for ways to increase revenue and reduce debt, some members may be reluctant to waive the fine.

Additionally, the town has recently increased the cost of several routine fees, and there have been significant discussions around upping fines to deter noncompliance and improve enforcement.

However, the development does include eight units of affordable housing, and all 32 housing units will be restricted to year-round occupancy. Historically, affordable housing projects have been able to avoid certain fees and have often received financial support from the town. The New Downtown development itself has received millions from the town to finance the affordable apartments within the project.

In addition to the new apartments, the development plans include a restaurant and an eight-lane bowling alley.

It has been a long road for the Sparks Avenue project. After years of regulatory hearings and over a year of little more than foundation work, more substantive construction has begun. But it now appears that some of the construction may have been completed without proper permits.