Court Dismisses Jones Block Bankruptcy; Auction Ahead
 The Jones Block is back on the auction block next week. |
ADAMS, Mass. — A federal court has dismissed the bankruptcy claims by the owner of the Jones Block, setting the stage for a foreclosure auction in August.
MountainOne Financial, operating at the time as Hoosac Bank, filed a motion to dismiss the claim after the developer of the two Park Street buildings, Samuel Adams LLC, filed for Chapter 11 in U.S. Bankruptcy Court on Wednesday, Jan. 23. The claim was made the day before the bank had scheduled to auction the buildings. A second auction, scheduled in March, never took place.
The court dismissed the claim last week and MountainOne, the mortgageholder, has again taken possession of the properties and will auction them on Aug. 8.
"The bank has taken possession under our security option," said Robert Fraser, executive vice president of MountainOne Finance, said on Tuesday. "It's been a lengthy and ongoing process."
Fraser said Samuel Adams does still have a chance to appeal and again delay the auction but he hopes that on Aug. 8, there will be new a buyer who will finish the project.
"That's what we all want," he said.
Samuel Adams, with principal Gerardo "Gerry" Sanchez, filed to appeal the ruling on Monday.
The auction will be done by Daniel McLaughlin Auctioneers of Boston. According to court documents, the value of the two buildings is $2.125 million while $1.3 million is owed to the bank.
MountainOne says Samuel Adams LLC has not filed a plan nor made adequate payments as it was required to do during the bankruptcy proceedings.
"In fact, the debtor does not appear to have taken any material steps of any kind to address its financial situation so as to emerge from bankruptcy and does not appear to have any meaningful intention to do so in the future," the bank's motion for dismissal reads.
Additionally, the bank contends that the company had not asked consent to use the bank's collateral — in this case being rent collected from the property.
The limited liability corporation has a lengthy list of creditors, including a number of local building suppliers and services, as well as the town of Adams.
The Park Street properties have long been eyed as cornerstones of a downtown revitalization. Sanchez purchased the buildings in 2007 under the company Polonia Architectural Restorations and vowed to invest $2 million in the interior. The town leveraged another $1 million in state funding to upgrade the exterior.
Sanchez said the plan was to renovate the inside with luxury apartments and retail space. "We want to do other projects in the city so we need to prove we are the right people. We won't let you down," he said at the time.
The town held up its end of the bargain in using the state grant to complete the exterior work. In the meantime, the recession had set in across the country and the Jones Block saw just enough work being done to meet the grant requirements.
After closing out the state grant, the town had few options to force the hands of the owner. Town officials twice expressed frustration publicly that the project was not completed before Sanchez again started work on the property. The Jones Block has sat vacant with no work being done since last year.
Meanwhile, the town has continued executing its downtown revitalization plan and construction has continued on nearby buildings. The Mausert Block, for example, had just recently received a site plan approval for plans to create three commercial spaces and apartment units in that building.
Tags: auction, foreclosures, Jones Block,
