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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 2, 1999
Capital Properties, Inc.
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(Exact name of registrant as specified in its charter)
Rhode Island 0-3960 05-0386287
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(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
100 Dexter Road, East Providence, Rhode Island 02914
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Address of principal executive offices) (Zip Code)
(401) 435-7171
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On December 2, 1999, the Supreme Court of Rhode Island affirmed the
judgment of the Superior Court ordering the State of Rhode Island to pay a
condemnation award owed to the Company. In addition, the Supreme Court struck
down as illegal certain tax assessments, back taxes and interest imposed by the
City of Providence based on property values determined in the condemnation
proceedings. The Supreme Court also affirmed the judgment of the Superior Court
that the Company was the lawful owner of Parcel 9 and that the City of
Providence was without authority to condemn Parcel 9.
The condemnation award relates to a 1987 condemnation by the State of
certain property owned by the Company. In 1998, the Company filed a petition in
the Rhode Island Superior Court for an increased condemnation award alleging
that the 1987 award paid by the State was inadequate. The December 2, 1999
ruling by the Supreme Court was the culmination of those proceedings and
multiple appeals. In its ruling, the Supreme Court ordered the State to pay to
the Company by December 22, 1999, 50% of the condemnation award which together
with interest thereon amounts to approximately $6,700,000.
At the time of the condemnation, the Company and the State entered into
an agreement (the "1987 Agreement") setting forth the State's obligations with
regard to the condemnation and requiring the Company to pay 50% of the
condemnation award to the State as consideration of the conveyance to the
Company of Parcel 9. Before the Supreme Court, the Company's counsel, at the
Company's direction, offered to allow the State of Rhode Island to retain the
other 50% of the condemnation award plus the interest thereon until the
Company's claims with respect thereto can be litigated. The Company believes
that the State may have breached the 1987 Agreement. The Company also contends
that interest on the condemnation award is not subject
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to the rebate requirement and disputes the adequacy of the interest. The Company
fully anticipates litigating these issues with the State of Rhode Island.
This Report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such statements represent the Company's expectations or
beliefs concerning the matters reported herein. The Company cautions that there
are uncertainties associated with the payment of the full condemnation award and
related interest.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Press Release issued on December 2, 1999
(b) Letter to Shareholders dated December 2, 1999
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SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Capital Properties, Inc.
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(Registrant)
Date: December 8, 1999 By: /s/ Barbara J. Dreyer
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Barbara J. Dreyer,
Treasurer
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EXHIBIT A
CAPITAL PROPERTIES, INC.
100 DEXTER ROAD
EAST PROVIDENCE, RHODE ISLAND 02914
PHONE: (401) 435-7171
FAX: (401) 435-7179
PRESS RELEASE
DECEMBER 2, 1999
SUPREME COURT AFFIRMS JUDGMENT
IN FAVOR OF CAPITAL PROPERTIES, INC.
FOR IMMEDIATE RELEASE
East Providence, Rhode Island: Today, Capital Properties, Inc. (AMEX: CPI)
announced that the Rhode Island Supreme Court affirmed the judgment of the
Superior Court ordering the State of Rhode Island to pay the condemnation award
owed to CPI and also struck down as illegal the higher tax assessments, the back
taxes and the interest thereon imposed by the City of Providence following the
condemnation award in 1997 based on property values determined in the
condemnation proceeding. The Supreme Court also affirmed the judgment of the
Superior Court that CPI was the lawful owner of Parcel 9 and that the City of
Providence was without authority to condemn Parcel 9.
The Supreme Court ordered the State to pay to CPI by December 22, 1999, 50% of
the condemnation award which together with interest amounts to approximately
$6,700,000. With respect to the other half of the condemnation award, during
oral argument before the Supreme Court, CPI's counsel, at the Company's
direction, offered to let the State retain that half of the judgment and the
interest thereon until CPI's claims with respect thereto can be litigated.
Pursuant to a 1987 Agreement with the State of Rhode Island, CPI agreed to remit
50% of any condemnation judgment received by it to the State in consideration of
the conveyance to CPI of Parcel 9. CPI believes that the State may have breached
the 1987 Agreement. Further, CPI contends that interest is not subject to the
50% rebate requirement and disputes the adequacy of the interest. The Company
fully anticipates litigating these issues with the State of Rhode Island.
Ronald P. Chrzanowski, President of CPI, stated "We are absolutely delighted by
the decision. It confirms what we have been saying for years, that the Company
is entitled to receive from the State the condemnation award, together with
interest, and that the City's attempts to assess these taxes and to condemn
Parcel 9 were arbitrary, capricious and illegal. The City's actions have
constituted an almost insurmountable barrier to development in Capital Center
and we are hopeful that with the final removal of this barrier development can
proceed."
CONTACT:
Barbara J. Dreyer
Treasurer
(401) 435-7171
#334866v1
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EXHIBIT B
CAPITAL PROPERTIES, INC.
100 DEXTER ROAD
EAST PROVIDENCE, RHODE ISLAND 02914
PHONE: (401) 435-7171
FAX: (401) 435-7179
December 2, 1999
To the Shareholders of Capital Properties, Inc.
Dear Fellow Shareholder:
I am pleased to report that on December 2, 1999, the Rhode Island Supreme Court
affirmed the Judgment of the Superior Court mandating the State of Rhode Island
to pay the condemnation award owed to Capital Properties, Inc. (CPI) and also
striking down as illegal the higher tax assessments, the back taxes and the
interest thereon imposed by the City of Providence following the condemnation
award in 1997 based on property values determined in the condemnation
proceeding. The Supreme Court also affirmed the judgment of the Superior Court
that CPI was the lawful owner of Parcel 9 and that the City of Providence was
without authority to condemn Parcel 9.
The Supreme Court ordered the State to pay to CPI by December 22, 1999, 50% of
the condemnation award which together with interest amounts to approximately
$6,700,000. With respect to the other half of the condemnation award, during
oral argument our counsel, at our direction, offered to let the State retain
that half of the judgment and the interest thereon until our claims with respect
thereto can be litigated. You may recall that pursuant to a 1987 Agreement with
the State of Rhode Island, CPI agreed to remit 50% of any condemnation judgment
received by it to the State in consideration of the conveyance to CPI of Parcel
9. We believe that the State may have breached the 1987 Agreement. Further, we
contend that interest is not subject to the 50% rebate requirement and dispute
the adequacy of the interest. We fully anticipate litigating these issues with
the State of Rhode Island.
I am delighted that this long and tortuous litigation has come to an end and
that we will soon be receiving the monies due to us. Additionally, the Court's
decision with respect to the Providence taxes and Parcel 9 now removes a major
barrier to further development of our property in Capital Center. We are hopeful
that this action will encourage a number of developers to proceed with their
projects.
As always, if you have any questions, you can either contact me or our
Treasurer, Barbara J. Dreyer.
Very truly yours,
/s/ Ronald P. Chrzanowski
Ronald P. Chrzanowski
President
