posted on August 11, 2011 15:08
www.MVTimes.com By Steve Myrick
August 4, 2011
Two parcels known as Bradley Square in Oak Bluffs, once intended for an ambitious project to create affordable housing, low-cost retail space, and to preserve a historic building, were sold at auction August 4, for $500,000.
An Oak Bluffs architect bought the land and the deteriorating building on it at a foreclosure sale. The building, known as the Denniston house, was the first African-American church on the Island. The ambitious restoration and affordable housing project backed by the Martha's Vineyard Housing Fund, formerly called the Island Affordable Housing Fund, won approval from the Martha's Vineyard Commission and town regulatory boards after more than a year of bitter neighborhood opposition, but failed when the housing fund was unable to raise $1.3 in private donations to complete the project.
The winning bidder was William "Chuck" Sullivan, according to several who know him. Mr. Sullivan is an architect involved in several high-profile residential and commercial projects on Martha's Vineyard. He once served on the town's zoning board of appeals.
Mr. Sullivan declined to comment to reporters after the auction, refusing even to confirm his identity. He did not respond to emailed requests for comment.
Mr. Sullivan was one of three registered bidders at the auction.
Matt Viaggio also registered to bid. While Mr. Viaggio did not bid, Mr. Sullivan consulted with him several times during the bidding. Mr. Viaggio was involved in extensive discussions with Mr. Sullivan and bank attorney Jane Pineau, immediately following the sale.
In 2007, four months after the housing fund bought the commercial parcel at 96 Dukes County Avenue, Mr. Viaggio bought the abutting property, a .20-acre commercial parcel at 100 Dukes County Avenue, according to town assessors' records. He still owns the property. Mr. Viaggio also declined comment.
The Martha's Vineyard Savings Bank holds the mortgage note on the property and was the only bidder against Mr. Sullivan. The bank dropped out after a bid of $495,000.
Brad Egan, executive vice-president of the Martha's Vineyard Savings Bank, was one of several bank representatives at the auction. Asked if the bank was pleased at the result of the sale.
"We're not pleased to be at an auction," Mr. Egan said. "It's an unfortunate circumstance."
Until the auction, the Martha's Vineyard Housing Fund, formerly called the Island Affordable Housing Fund, owned the property. The fund bought two parcels of land and the Denniston house, for $905,000 in 2007.
The fund stopped making payments in October 2010, once its directors decided not to move forward with the project, saying it would be irresponsible to use donations to pay the mortgage, with no viable plan for development. The property was on the market for nearly a year, but no buyers emerged.
On June 15, the Martha's Vineyard Savings Bank told the fund that the bank had begun foreclosure proceedings.
At the time of the foreclosure proceedings, the fund owed $746,789 on the mortgage note, including interest and late fees. The bank also froze about $80,000 the housing fund had in accounts with the bank. Some of the housing fund's assets were restricted by agreement with the donors for use on other projects, according to Ewell Hopkins, the fund's executive director. He said the fund has retained an attorney to get those funds released.
"We have to get past this," Mr. Hopkins said minutes before the bidding started. "If this is the step that has to be taken, so be it."
After the auction, he was distressed at the result.
"I'm amazed at that price," Mr. Hopkins said. "If the bank had let us sell it at that price, it would have been gone nine months ago. It makes no sense at all."
The housing fund still owes the Martha's Vineyard Savings Bank approximately $260,000 on the mortgage note for the Bradley Square property, as well as about $59,000 owed on the mortgage note for a house in the Jenney Way affordable housing development in Edgartown. The bank agreed to a "short sale" on that property. With market conditions pressuring sales prices downward, the housing fund accepted an agreement to sell the house for less than it owed.
Bank officials would not speak specifically about the Bradley Square auction, but said when the bank gets less than it is owed in the foreclosure process, several resolutions are possible.
In some cases, the bank does not move to collect the remaining debt and writes it off as a loss. In other cases it moves aggressively to recover the debt, seeking liens against the property owner's assets. In other cases, the property owner works out a repayment plan for some or all of the remaining debt.