Framingham Development On The Auction Block
PHOTO/BRANDON BUTLER
Sales and prices are up for multi-family homes in Worcester.
Alison Steinfeld, community and economic development director for the Town of Framingham, is holding out hope for a stretch of downtown that is set to be sold at auction later this month.
"It's right in the heart of downtown," she said. "It has so much potential."
Potential is about all the property has had for the last few years, however.
The planned developer of the property, Framingham Acquisition LLC, had grand plans in 2006 for an almost 50,000-square-foot commercial and residential complex named The Arcade along a one-block stretch of Frederick Street in downtown Framingham.
But the LLC declared bankruptcy last year in what one of the managers said was a move to block the property from being foreclosed.
A judge this summer, however, allowed the two banks holding mortgages on the properties, Framingham Co-Operative Bank and First Trade Union Bank in Boston, to foreclose on the properties.
Financial Concerns
Framingham Co-operative, whose officials did not return calls for this story, attempted to hold an auction last week to sell the properties, but it was postponed until later this month.
Roger Lehrberg, one of the managers of Framingham Acquisition LLC, is a Newton lawyer and said funding for the project dried up in 2008 when the economy tanked.
Despite his LLC declaring bankruptcy, Lehrberg said he's still "actively pursuing" a developer or financier to fund a scaled-down version of the original project. The property is made up of five multi-family homes and an empty lot just west of town hall.
"We're exploring every possible avenue to resolve this for everyone's best interest," Lehrberg said.
The banks, it seems, just want to rid themselves of the property.
Douglas Rowe, a Marlborough lawyer who handles real estate issues, said it's not uncommon for limited liability corporations to file bankruptcy to prevent a foreclosure.
But, he said, if the LLC does not show adequate movement toward reorganizing and advancing out of bankruptcy, the courts can give the banks the right to foreclosure anyway.
In July, that's exactly what a U.S. Bankruptcy Court judge allowed, according to court filings.
While the original auction was scheduled for Aug. 31, it never took place because of an error in advertising the auction, according to Lehrberg.
Mark Shear, a Worcester auctioneer, said each auction must be posted in public for at least three weeks before the auction. If there is a complication related to the posting, the auction can frequently be delayed.
The auction has been rescheduled for Sept. 24. It's being handled by Daniel P. McLaughlin & Co. of Framingham.
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