Southbridge’s Wellsworth Hotel to be auctioned, as part of Norton bankruptcy

As the Chapter 7 bankruptcy of developer Charles “Chip” Norton plays out in federal court, the Wellsworth Hotel complex in Southbridge is set to be auctioned off in October. Paul E. Saperstein Co. of Holbrook has scheduled two auctions for Oct. 7 at the Southbridge Innovation Center, with one auction selling the 203-room hotel and conference center site, and the other involving the sale of equipment and other assets relating to the on-site power plant. Norton, developer of the Mercantile Center high-rise in Worcester and founder of Wellesley-based Franklin Realty Advisors, had been working since 2006 to redevelop the former American Optical Co. campus into the Southbridge Innovation Center. [Want more real estate news? Sign up for Real Estate Insider.] The hotel auction includes the 258,439-square-foot building and the roughly 10-acre parcel it sits on. The hotel includes 20,000 square feet of meeting and event space, as well as 72,399 square feet of office space and 416 parking spots. Amenities at the hotel include a restaurant, lounge, pool, and basketball court.  Of the on-site office space, 13,657 square feet is leased out, with 27,280 square feet of additional space set to be leased to a state agency, according to the auction notice. New York-based lender X-Caliber Rural Capital recorded an affidavit at the Worcester District Registry of Deeds on Tuesday, asserting it holds the promissory note secured by its 2022 mortgage on the hotel property. X-Caliber alleged in February that Norton embezzled more than $1 million in relation to his management of the hotel, among two other allegations of misconduct. X-Caliber has provided a $13.25-million loan made to Southbridge Associates LLC, a Norton-controlled entity. The complaint alleged Norton had agreed to a power purchase agreement for the hotel at above market prices, benefitting from this agreement while further harming the financials of the hotel. Norton denied the allegations made by X-Caliber through his attorneys. The auction related to the energy plant is limited to personal property, operational equipment, and secured collateral. Norton sold the site of the power plant for $5.5 million in 2021, according to the Worcester Telegram & Gazette.  The hotel auction is scheduled for 11 a.m. at 14 Mechanic St. within the innovation center campus, while the auction relating to the power plant property and collateral is scheduled for 12 p.m. at 60 Optical Drive. Both sales will require a $50,000 deposit from the auction winner at the time of sale. The Wellsworth Hotel’s 203 rooms make it the sixth-largest hotel in Central Massachusetts, according to information provided to the WBJ Research Department.  The hotel previously operated as the Southbridge Hotel and Conference Center before it was rebranded as The Wellsworth Hotel in 2024.  Eric Casey is the managing editor at Worcester Business Journal, who primarily covers the real estate and banking & finance industries.