posted on February 09, 2019 05:31
WEYMOUTH — A firm that lent $60 million to the struggling developer behind a sprawling project on the site of the former South Weymouth Naval Air Station bought several dozen parcels for just more than $33 million at auction.
Daniel P. McLaughlin Auctioneers & Co. held the public auction at the development, called Union Point, for the purpose of foreclosing on 40 lots ranging in size from less than a quarter-acre to nearly 30 acres on behalf of Washington Capital Management. The land totals about 115 acres.
In a legal notice announcing the auction, Washington Capital Management said the developer, LStar, had breached the terms of its mortgage agreement with the lender.
There was one registered bidder, but he did not make a bid to top Washington Capital’s offer of $33.2 million. Bruce Barnett, an attorney for Washington Capital, said he’s “not privy” to the firm’s plans for the land.
“The lender now owns the property and will do what it can to recoup its investment,” he said.
The foreclosure auction came amid mounting legal and financial problems facing the massive mixed-use redevelopment project, which includes 1,450 acres of land in Weymouth, Rockland and Abington.
In August, a Suffolk Superior Court judge banned LStar and its chief executive officer, Kyle Corkum, from selling off any assets worth more than $25,000 as they face a lawsuit filed by a company that loaned LStar $2.5 million.
LStar managing partner Steven Vining said in a North Carolina lawsuit that Corkum breached his duty, misspent millions of dollars and meddled in the business after he was ousted. But the company has yet to completely cut ties with Corkum, which local officials have urged the developer to do in order for the project to move forward.
As a result, Weymouth Mayor Robert Hedlund announced that the town would not provide additional water or wastewater service for any new projects at Union Point until town officials felt LStar was able to carry out the project. The Southfield Redevelopment Authority’s board of directors in December determined that LStar breached the terms of the disposition and development agreement, which could result in officials terminating LStar as the master developer.
Paul Niedzwiecki, executive director of the SouthField Redevelopment Authority, said the outcome Thursday was the best one given the situation.
“This is the fastest way to get development moving and now (Washington Capital) can have discussions about partnering with developers,” he said.
The sale does not change the fact that LStar as of Thursday is still the master developer of the project, according to Niedzwiecki.
Union Point now has about 1,000 single-family homes, townhouses and apartments. The long-range development plan calls for 3,855 homes, 1,000 of which would be restricted to people age 55 and older; 8 million square feet of commercial space; 1,000 acres of open space; and 50 miles of hiking and biking trails.
By Jessica Trufant
The Patriot Ledger
Posted Feb 7, 2019 at 5:03 PM