Worcester Stands to Lose $100K More on May Street Property
Saturday, May 25, 2013
The recent bid, which hasn't yet been awarded following the May 15th close date, continues the financial troubles of the property, which was assessed at $764,000 at the February auction.
At that time, the 15,000 square foot building was transferred from 5 May Street, LLC, who had purchased the property in 2010 for $435,000, to an auctioneer, following foreclosure proceedings. The action was taken after 5 May Street, LLC failed to complete the renovation project that had been made possible by the City, who had secured more than $2.3 million in state and federal funds.
The property was assessed in February at $764,000. At the February auction, the city's bid eclipsed the $135,000 offer made by developer Russell Haims.
Developers Weigh In
GoLocal spoke with Haims this week, who said that while he went through a walk-though again at the second auction, he ultimately decided against another bid.
"Luckily, I wasn't the winning bidder back in February," said Haims. "It still presents the same issues -- lack of dumpster for trash, parking. If I couldn't meet the expectations put forth by the bid, I wouldn't want to get involved with something that wasn't successful."
Haims noted that he was in the process of completing a project in the neighborhood, in which he converted an old church into a 12 unit building. "I've worked a lot in the area, and this [church project] is a historic gem."
"Gold Star Builders may very well have a plan to turn it around, and I wish them luck," said Haim. "I know that folks will continue to watch how things develop at the property, given everything that has happened to date."
Similarly, Tony Nguyen with Gold Star Builders knows the area well, and had plans to turn the unit into low-income housing through Worcester Affordable Housing Rentals.
When asked if he was surprised to be listed as the only bidder, Nguyen said, "Yes." Nguyen hadn't been part of the auction process in February, just the recent round, he said.
"I expect that we will have to put around $450,000 to $600,000" to renovate the building, Nguyen said, which was the reason why his bid was at the level he proposed.
Affordable Housing to Be Considered by Council
Next month, the Worcester City Council's Economic Development Committee is expected to take up affordable housing reports by consultants undertaken last year.
"The 5 May Street issue had everything to do with bad management by [5 May Street LLC], not the city," said Worcester City Council Member Frederick Rushton, who noted that Council would be looking closely at ways to address housing issues in the city next month, starting at the Committee level.
"There's not a one-size fits all approach," said Rushton. "We'll hear from people that want housing to be market rate only, those who want an increase in affordable housing. There will be a number of views voiced, and we'll work towards crafting the best policy for Worcester."
"The idea is to bring this study in front of the Council and residents. The folks that did the study will be doing a presentation on their findings. That's when we'll start to have an idea of where we're going, to speculate now would be premature."
City Council Member Konstantina Lukes, who did not want to comment on the current situation facing 5 May Street, did say that housing issues in the city needed to be addressed.
"As you know, the housing study will be taken up at the committee level next month. The process ought to be reviewed, especially for more checks and balances," said Lukes.
In a letter presented along the initial study findings to the City Council last fall, City Manager Michael O'Brien wrote, "Our revitalization efforts must be undertaken in a much bolder, strategic way through unprecedented public-private partnerships – in a block by block, street by street, house by house manner. These efforts will require us to re-direct Federal, State and City resources and private dollars must be brought to bear to address entire streets at one time. We must use this opportunity to revisit our existing policies and funding priorities."
- NEW: Worcester Scores $560,000 for Vacant Public Housing
- NEW: MA To Invest $67 Million in Over 1,300 Housing Units Statewide
- NEW: RE/MAX New England 2013 Housing Forecast Projects Growth
- NEW: Rhode Island Housing Market Looking Up
- Housing Advocates Say Settlement is Not Enough
- Mass Housing Market Still Attractive Despite Foreclosures