posted on September 01, 2010 15:42
Investors interested in bidding on pieces of the failed downtown Arcade redevelopment project gathered yesterday on Frederick Street, but the bank holding the mortgage postponed a planned auction.
As part of foreclosure proceedings, Framingham Co-operative Bank has moved to sell five triple-deckers on Frederick Street and a vacant lot at 80 Kendall St.
Because of an advertising error, the auction was rescheduled for Sept. 24, but a small crowd of potential bidders and spectators met on the hot afternoon with the real estate auctioneer, bank president Mark Haranas and the bank's lawyer, Mark's son Peter Haranas.
The town, meanwhile, is pursuing criminal charges against Wellesley project developer Michael Perry for egregious state sanitary code violations at one of those multi-family homes. Inspectors found cockroaches, rodents and safety issues in one apartment Perry has refused to correct, according to an application for a criminal complaint on file in Framingham District Court.
The Board of Health said it has found bedbugs and other serious problems in others of Perry's Frederick Street apartments that are on the auction block.
Framingham Co-operative plans to sell the six properties either separately or bundled together.
"It's an unfortunate issue for some people, but it's an opportunity for others, as sad as it is," said potential bidder Joseph Keefe of Framingham.
The properties were part of ambitious plans for a large multi-use project approved by the town in 2004 and surrounding the historic Arcade building on Concord Street. The project collapsed before any significant progress was made, due to developer Framingham Acquisition's financial failings.
Perry declined comment on Monday and did not return a call yesterday.
"I was excited at the beginning of the project, especially for this neighborhood," said Keefe, who owns another investment property on Frederick Street. "It would have been a tremendous upswing, I think."
Mark Haranas said Perry's Framingham Acquisition obtained a mortgage through his bank for the six properties, and financing from a separate lender for the Concord Street block building.
The developer also sought financing from the independent MassHousing for its $60 million redevelopment project. Approved by the Planning Board in 2004, it called for demolition and new construction of 290 apartments, 40 hotel rooms and 50,000 square feet of commercial and office space. Amenities were to include a rooftop garden, swimming pool and six-story parking garage.
The plan was to raze the homes on Frederick Street to build the garage.
Haranas declined to say how much Perry's group owes his bank for mortgage payments. He said the bank tried to sell the properties last year, but the developer filed for bankruptcy protection. "That stopped us."
The bank has the court's go-ahead for this auction, Haranas said.
Haranas said the mortgage holder for the Arcade building block at 101-175 Concord St. has been "running silent" about any foreclosure auction plans it has.
"That's not going to be an easy thing," Haranas said.
Across from the Memorial Building, the stretch of commercial block is home to a CVS/Pharmacy, the former Sampan Restaurant, Padaria Brasil Bakery and a number of Brazilian shops, as well as vacant storefronts.
The Frederick Street parcels are at 29-31, 35-37, 39-41, 43-45 and 47-49.
The paperwork Board of Health Director Ethan Mascoop filed in district court on July 27 charges Framingham Acquisition with numerous violations of the state sanitary code at 39 Frederick St., Apt. 3.
Among them: shock hazards, the rodent and cockroach infestation, improper installations and maintenance, emergency exit issues, general disrepair, inadequate weathertightness, improper lighting and other problems.
"It was particularly egregious," Mascoop said.
He said Perry was "recalcitrant in complying with our order" to correct the violations.
A clerk's hearing is scheduled for Sept. 14.
Building Commissioner Mike Foley said his department has gone after the developer recently on other issues, including ordering Perry to replace several dilapidated porches, which he did.
Town treasurer/collector Stephen Price said yesterday Framingham Acquisition owes the town nearly $650,000 in back taxes, sewer/water utility, interest and fees dating back to 2008.
Additional interest is accrued every day.
The total includes about $125,000 for the Frederick Street and 80 Kendall St. properties that Price said would need to be paid at closing, if they sell.
On site, auctioneer Daniel McLaughlin, president of Boston-based Daniel P. McLaughlin & Co., announced the a new auction date: Sept. 24, at 2 p.m..
It will be held at 29-31 Frederick St.
(Danielle Ameden can be reached at 508-626-4416 or email@example.com.)