Springfield developer tries to avoid foreclosure

One of the owners of One Hundred River Street LLC said Friday he was working hard to avoid a foreclosure lawsuit filed by two banks that loaned the Springfield redevelopment project more than $3.8 million.
http://rutlandherald.com/article/20131102/NEWS02/711029952

Published November 2, 2013 in the Rutland Herald Springfield developer tries to avoid foreclosure By SUSAN SMALLHEER Staff Writer SPRINGFIELD — One of the owners of One Hundred River Street LLC said Friday he was working hard to avoid a foreclosure lawsuit filed by two banks that loaned the Springfield redevelopment project more than $3.8 million. Richard Genderson of Washington, D.C., said the project at the former Fellows Gear Shaper site was “underwater” by about $86,000, but he said he had been working with both Brattleboro Savings & Loan, as well as Mascoma Savings Bank. If late fees were not included, he said, the delinquent figure would be about $60,000. Genderson also said the company had been unable to pay off about $500,000 in liens filed against the project from subcontractors on the project. Brattleboro Savings & Loan, the lead lender in the project, filed a lawsuit last week in U.S. District Court in Brattleboro, seeking foreclosure on a 2011 loan to Genderson and his partners, John Meekin and Jonathan Genderson. All three men are from the Washington, D.C., area. Genderson said earlier Friday he expected to have reached an agreement with the banks about the delinquent amount, but later in the afternoon he said bank representatives hadn’t returned his calls. The developer said the renovation of the original Fellows Gear Shaper building was much more expensive than he and Meekin anticipated when they entered a purchase-and-sale agreement in 2008 with Precision Valley Development Corp. He said he and his partners had to spend twice what they originally expected to renovate the old industrial complex. Liens on file at the Springfield town clerk’s office indicate that the $13 million project has other financial problems, some dating back to 2011. Genderson admitted that none of the liens, totaling about $500,000, had been discharged. He and his partners are up to date on their $33,313 annual property tax bill, according to the town office. The building was sold for $1 in 2012 by Precision Valley. As a condition of the sale, the town gave the developers power rights to the Fellows dam, one of a series of small hydroelectric dams on the Black River in downtown Springfield. The liens range from more than $100,000 by Irving Oil and a subsidiary, to various amounts claimed by local plumbers, electricians, fence companies and suppliers of structural steel, windows and doors. The liens total more $500,000, and many include judgments awarded by Windsor Superior Court Judge Harold Eaton. The largest lien was for $112,000 from Branch Group, Inc., and the second largest, $101,000, came from Rexel Holdings, an electrical materials supplier. Genderson said the building had myriad environmental problems, which drove up the price of the project astronomically. And the collapse of the global economy in 2008 was also a big factor, he said. The developer said the two banks have been receiving rent payments directly from Springfield Medical Care Systems and a pharmacy that moved into the former industrial complex. Depending on other finances, he said, he was able to supplement that amount. According to the lawsuit, filed last Thursday, Genderson’s monthly payment was about $36,000. “I think we can make a deal with Mascoma. We’re not giving up on this project,” said Genderson, who runs a well-known liquor store in the Capitol district in Washington. Genderson said he had talked to Daniel Yates, president of Brattleboro Savings & Loan, who told him the S&L was “forced” into the lawsuit by its bank partner Mascoma. Bank officials and the lawyer who filed the lawsuit have not returned calls for comment. Genderson said the financial problems facing the developers would not affect the Springfield Health Center or the Springfield Medical Care Systems doctors’ offices since they have leases.