Town refutes KMO lawsuit

Fitzwilliam says firm  never filed quarry plan

KEENE — In a response to a civil lawsuit filed in May by KMO Associates LLC of Fitchburg, Mass., the town of Fitzwilliam argues that KMO has prematurely sought the court’s assistance for the removal of previously quarried granite from Webb Hill Quarry . KMO has yet to file an application with the town for a site plan review on which town officials could render a decision and, therefore, the town says it has not acted unlawfully or prevented KMO from using its property.

“KMO’s complaint is based upon allegations that the town, by its regulations and/or actions, is impermissibly standing in the way of KMO’s use of its property to remove previously mined dimension stone and then further mine dimension stone,” according to Fitzwilliam’s answer to the civil suit. “KMO’s allegations are not an accurate depiction of the facts and are misleading,” the town’s response, filed with the Cheshire County Superior Court on June 20, continues.

KMO, an investment firm owned by Aaron E. Olson of Rindge, filed suit against Fitzwilliam on May 2, after choosing not to pursue a rehearing of its petition warrant article that failed 455 No votes to 129 Yes votes at Town Meeting in March. KMO reached an agreement with the Select Board not to move forward with the rehearing, after representatives of KMO told town officials the firm had only filed the motion for rehearing in order to preserve the right to raise issues about quarry reclamation in future court proceedings.

The petition warrant article sought to make quarry reclamation a new and permitted use in Fitzwilliam’s rural/residential district, where the Webb Hill Quarry owned by the Olson family is located. The last time stone was commercially removed from the site was in the 1930s.

Representatives from KMO attended meetings with the Planning Board, Select Board, Conservation Commission and other town departments over the past year to discuss its interest in reopening the Webb Hill Quarry, but never filed an application for a site plan review or for a variance to remove the granite from the residential district. The town argues that those “informal communications” serve as the basis for KMO’s complaint to the Superior Court and its allegations that the town has acted unlawfully.

Olson is asking the court to order that the removal of previously quarried granite from the Webb Hill Quarry is not subject to town zoning. The suit alleges that town zoning contradicts New Hampshire RSA 12-E, which regulates quarry reclamation and mining, and requires state permitting to proceed with a project. If the state grants its approval for KMO to remove the stone, the suit asks the court to direct Fitzwilliam to also permit such activity.

But the town says KMO’s attempt to circumvent town zoning by only seeking state approval violates standard legal procedure . “KMO’s assertion that its proposed change in use is not subject to any local regulation ignores the statutory and regulatory requirements for site plan review when a nonresidential use is proposed,” according to the town’s response to the civil suit. Furthermore, the town’s response reads, RSA 12-E states that nothing in the statute “...shall affect any obligation of the applicant to obtain local approvals required under all applicable, lawful local ordinances not inconsistent with [RSA 12-E]...” Fitzwilliam’s zoning ordinance does not currently address mining and, therefore, KMO would be required to obtain a variance from the zoning board, according to court documents filed by the town.

In the fall of 2012, Bill Carpenter, lands administrator for the state’s Department of Resources and Economic Development, told KMO that the state would not issue the company a mining permit until the Fitzwilliam planning and zoning boards had approved the project, according to court records.

In it’s lawsuit, KMO recognizes that towns have a role in regulating mining, but not in a manner that contradicts state statute. Fitzwilliam, the suit argues, has regulated mining activities in town to prevent the removal and sale of previously quarried stone, and to prohibit future mining.

The town says it has not denied KMO the opportunity to seek a variance and site plan approval from the town, which if granted, would allow the company to seek state permitting and possibly remove the granite.

In addition to the central dispute over whether or not both town and state approval are required for KMO to proceed with its proposed project, KMO alleges that a conflict of interest exists when landowners who abut the Webb Hill Quarry also serve on town boards and discuss KMO’s interests. KMO maintains that 2012 Planning Board Chair Terry Silverman and his wife, then Select Board Chair Susan Silverman, who own property on East Lake Road, have publicly opposed the reopening of the quarry.

But the town argues that neither Terry Silverman nor Susan Silverman participated as town officials in discussions regarding the use of KMO’s property. And should a site plan application come before the Planning Board, the town said it has faith that Terry Silverman will recuse himself once again.

The Webb Hill Quarry was opened in 1849 and mined until approximately 1918, according to KMO’s lawsuit. KMO acquired the 121-acre lot that includes the quarry by deed of Elaine A. Olson and Arnold R. Seppala in September 2011. The suit claims that the quarry is home to 45 million tons of granite, which is worth “many millions of dollars.”

Since summer 2012, the Olson family and KMO have expressed interest in reopening the quarry for the purposes of removing the previously quarried granite and selling it commercially.

As KMO’s suit against the town of Fitzwilliam plays out in Cheshire County Superior Court, the company is also at the center of an ongoing state investigation that has reportedly cost investors millions of dollars and is tied to two pending lawsuits at the Merrimack Superior Court in Concord. The N.H. Bureau of Securities confirmed its investigation of Olson in April 2012. Kevin Moquin, an auditor at the bureau, said Monday that the bureau’s investigation is ongoing.

Park Construction of Fitzwilliam and its principals filed suit against Aaron Olson’s uncle, Eric Olson, and cousin, Ted Olson, in June 2012, alleging that the construction company and its owners lost more than $15 million in their investments with KMO. A settlement could be reached in early July if a “stipulation for dismissal” that was filed prematurely in March is resubmitted to the court.

The lawsuit Eric Olson filed against his nephew is scheduled for trial in February 2014.

Alyssa Dandrea can be reached at 924-7172 ext. 228 or She’s on Twitter at @alyssadandrea.

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