Irish Times Headed for Auction Block
Monday, April 23, 2012
“It is one of the bigger amounts owed to the city,” Treasurer Mariann Castelli Hier said. “We usually try to target the larger amounts first for cost effectiveness. It doesn’t make sense to go to court over a small amount.”
The future of the Irish Times remains in doubt, but the city has hopes it’s going to get its money back. On May 30, Hier will lead a public auction at City Hall. While there is no official list available yet of properties up for auction, Hier confirmed the Irish Times building is among them. The auction is actually a Tax Lien Assignment Sale, she said. Mostly developers will show up and what they will buy aren’t the properties, but rather the liens. And that is good news for Worcester.
“It’s a very good thing for the city,” Hier said. “It brings revenue in. It’s good for our finances.”
More importantly, it may bring places like the Irish Times a step closer to being reused and reopened – and being put back on the city’s tax rolls. But that is a premature discussion, because first the new lien owner must either collect on the debt or settle the matter in court. Up until the auction, of course, there is still time for the current owners to pay off their debts and retain their properties.
Lien auction
Places like the Irish Times don’t just land on an auction list overnight. In the case of that property, it has been years of legal wrangling and several unsuccessful tries on the part of the city to recoup lost revenue. In this instance, with a lien against the property, the auction isn’t for the business itself, which makes it quite different than your typical event. It is also the result of much preparation.
First, the city sends out notices to the property owner, giving that person or group a chance to pay off the debt. A second batch of notices then goes out and two legal notices are posted – one in City Hall, the other in a local newspaper. Even with all that, the owner still has a chance to keep the property right up until the day of the auction. Failing that, the property is sold for nothing less than the amount owed in back taxes.
“Purchasers can come and bid to purchase the lien from the city,” Hier said. “That pays the city in full, so we’re happy. We’ve collected what was owed to us.”
Once someone buys a lien, he or she then takes over as the lien holder and can pursue the property owner for payment. It only gets more expensive for that owner, Hier said, because interest is charged at a rate of 16 percent. With a property such as the Irish Times, which is the midst of court proceedings, the new lien owner must petition the court to take the city’s place as holder of the lien.
New business
Of course, while the city gets its money back in an auction, the ultimate hope is for new development of places like the Irish Times. As Dick Kennedy knows, an empty business means no business.
“Clearly, no one likes to see empty storefronts, particularly on the first floor,” said Kennedy, president and CEO of the Worcester Regional Chamber of Commerce. “Restaurants are a very difficult business. If you catch people’s business, you can be very successful. If not, it can be extremely challenging.”
Areas such as Shrewsbury Street and the Canal District seem almost immune to the struggles some restaurants and bars endure on Main Street, something Kennedy duly noted.
“A lot of it has to do with the number of bars and restaurants that are already there,” he said. “People just seem to gravitate to that area. But late at night, that part of Main Street (where the Irish Times is located) is very active.”
He singled out venues such as The Armsby Abbey at 144 Main St. and Ritual at 281 Main St. and said the city is largely unable to dictate who will set up where.
“I don’t think you can have a particular recruiting effort,” said Kennedy. “It really all depends on who is interested in starting an establishment like that. It just takes time for places to catch on.”
In the future
The city, he acknowledged, tended to develop other parts of the area in terms of bars and restaurants “to a greater extent than the downtown area.”
“It hasn’t happened with Main Street, yet,” he said, “but I think that will come. Generally, there is a pretty thin margin in businesses like (Irish Times). Without a steady flow of customers, it’s tough to maintain your business plan.”
As for the future of the Irish Times building, what happens is anyone’s guess, but Kennedy said the options are clearly limited.
“I mean it was a micro-brewery way back in time,” he said. “You’re never going to say never, but at the end of the day, it’s so configured for that purpose, it’s hard to imagine it as something else. It’s a very tough business under the best circumstances.”
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