Finance committee authorizes $25 million bond order, P&S to buy 164.6 acres and Russo water rights

The Peabody City Council Finance Committee on Thursday authorized the mayor to enter a purchase and sale agreement and approved a $25 million bond order to buy roughly 164.56 acres and associated water rights from Russo Peabody, the committee chair said. The motions passed 5-0.

Mayor Ted Beddingford called the proposed acquisition “a unique opportunity” to preserve open space, secure freshwater resources and help mitigate local flooding, and said the purchase includes an active water-management permit that allows up to about 3,340,000 gallons per day.

The committee’s authorization begins a formal due-diligence period, during which the city will complete Phase I environmental testing and any additional investigations needed before deciding whether to close. The draft purchase-and-sale agreement contains an opt-out provision, and the mayor said the city could walk away without additional cost if testing or title work raises unacceptable issues.

Why it matters: Committee members said the land and water rights could reduce Peabody’s reliance on Massachusetts Water Resources Authority supplies during peak demand, preserve contiguous open space and give the city new options for flood mitigation tied to the Goldthwaite Brook watershed.

Discussion highlights and follow-up: The mayor said Weston & Sampson, the city’s water consultant, reviewed samples and reported the water is of “good quality” and that there is potential financial benefit over the long term, though substantial infrastructure investment would be required to treat and distribute the water for drinking purposes. The mayor said a full new treatment plant could cost an estimated $20 million to $25 million, while other options such as upgrades to the Walsh Water Treatment Plant might be less expensive.

Councilors emphasized the need for further study, maintenance of existing upstream assets, and consultation with the Department of Environmental Protection on any permit increases. Councilor Turco, among others, praised the proposal and said, “I don't believe the city is at any risk here at all.”

Formal actions: Councilor Gould moved the primary authorization; the committee later amended the draft to include revised language in section 5.1.0.9 (opt-out language) provided by the mayor. A separate motion to adopt the loan/bond order for $25,000,000 was moved and approved. Each recorded roll call was 5-0 in favor.

What remains: The city will complete Phase I environmental work, review Weston & Sampson’s further analysis of water quality and infrastructure options, and negotiate final purchase-and-sale contract language with Russo Peabody. Funding for the bond is expected to be handled through the water and sewer enterprise fund, the mayor said. If testing and permitting succeed, future votes will be required to appropriate construction funds or to adopt a plan for treatment and distribution.

The committee also instructed staff and consultants to proceed with the due-diligence tasks described in the draft agreement and to report back to the council before any closing.