A high-stakes South Boston land fight will now play out on the sidewalk in front of the property, right on St. Patrick’s Day. Judges have cleared a foreclosure auction for roughly six acres along Dorchester Avenue, lifting a last-minute legal block and keeping the on-site sale on track for March 17. The rulings shut down a flurry of filings from developer Andrew J. Collins and several investors who warned the sale would wipe out their claims. Whoever comes out on top will walk away with a coveted, development-ready stretch of Dot Ave. that has been eyed for labs and housing.
In written and oral rulings, Suffolk Superior Court judges said the mortgage holder’s rights have to be satisfied before other creditors, undercutting the injunction sought by two California investors, according to The Boston Globe. Judge Robert B. Gordon wrote that the mortgagee’s “pre-existing loan rights and secured interest” must be paid first, and that judgment creditors can only collect from any sale surplus. Court filings show the debt on the properties has ballooned as the legal fight has dragged on.
The auctioneer J.J. Manning is advertising a mortgagee foreclosure sale of 10 parcels, including the former World Seafood plant at 400 Dorchester Ave., with an on-site start at 11 a.m. on March 17, according to J.J. Manning. The property information packet states the lot will sell “in the entirety only,” requires a $500,000 nonrefundable initial deposit and sets a May 1 closing deadline for the buyer. It also gives the winning bidder an exclusive option to purchase an adjacent Parcel 7 that is not part of the foreclosure sale.
Collins has fired off multiple suits and emergency motions to stop the sale, accusing the mortgage-holder and its partners of misconduct, but a judge recently denied a temporary restraining order, allowed Registry notices to be filed and set a March 23 hearing on whether to issue a preliminary injunction, as reported by Universal Hub. Collins’ complaint alleges an orchestrated effort to wrest control of the assemblage, and he and his attorneys say they will keep pressing their challenges in court.
Legal stakes for investors
Two California investors, Divas Pant and Dhiraj Bora, hold an $8.6 million judgment tied to some of the parcels, while J.T. Magen and Extell contend the LLC that held the properties owes them more than $150 million, a figure that filings say is growing by roughly $57,000 a day, according to The Boston Globe. Suffolk Superior Court Judge Gordon concluded that Pant and Bora’s judgment does not supersede the mortgage holder’s superior, pre-existing rights, which means any payout to judgment creditors would likely come from whatever is left after the mortgage is satisfied.
Why developers are watching
The assemblage sits across Dorchester Avenue from a city-approved, roughly 1.1-million-square-foot life-science and residential campus, the multi-building “Iron Works” project that BPDA officials have cleared, which helps explain why deep-pocketed firms have shown interest in the Dot Ave. parcels, according to Boston City Properties. That backdrop has turned what were once under-the-radar industrial lots into a prize for builders hoping to stitch together lab, office and housing space near the Andrew and Broadway Red Line stops.
Bidders who prevail must put down the nonrefundable deposit and hit tight closing deadlines spelled out in the sale packet, which notes the properties are sold “as-is” and subject to prior liens and encumbrances. With a March 23 hearing on a preliminary injunction still on the calendar and multiple appeals pending, title and distribution of proceeds could continue to be litigated even after a sale, leaving the Dot Ave. assemblage’s future uncertain, as reported by Universal Hub.
