Neighbors of the Boston Yacht Haven marina are warily eyeing the planned sale of the troubled marina, claiming the property’s $9.9 million price tag could only be justified by the existence of secret plans to redevelop the 4.75-acre North End site.
According to a purchase and sale agreement on file with federal bankruptcy court, the site’s current owner, Northern Bank & Trust, has set a Jan. 8 closing date for the property. The buyer is Boston Boat Basin LLC. Paperwork on file with the secretary of state’s office shows Boston Boat Basin is controlled by prominent Newburyport developer Charles Lagasse. The LLC shares an address with Newburyport Development, a unit of Steve Karp’s New England Development. Neither Lagasse nor New England Development could be reached for comment.
The eye-popping sale price is nearly $2 million more than the $8 million credit bid that Northern Bank & Trust paid at bankruptcy auction in August. The $9.9 million figure is also close to the $10.1 million face value of Northern Bank’s 2005 mortgage on the 4.75-acre property. Northern Bank attempted to recoup that investment by liquidating the property at auction in August.
Last week, the marina’s neighbors at the Commercial Wharf East Condominium Association asked Yacht Haven’s bankruptcy judge to halt the planned sale while the association’s lawyers pored over the deal’s financials. In a court filing, the association pointed to financials from Yacht Haven’s previous owner, Modern Continental, showing that the operation only posted a $236,000 profit in 2004. The association later dropped that request, after bankruptcy court denied a maneuver that wuold have effectively shielded Boston Boat Basin from an ongoing lawsuit in Land Court.
"[The] use of the property as currently permitted does not support a $9.9 million valuation," the association argued, raising the prospect that the bank and Boston Boat Basin "have already engaged or explored other permitting scenarios and may have approached state or local authorities."
Northern Bank has rebutted this argument, telling the bankruptcy court that Boston Boat Basin has "repeatedly announced its intention to abide by" deed restrictions that bar the property from operating as a restaurant, bar or function hall. The bank’s counsel offered no comment to Banker & Tradesman. The Boston Redevelopment Authority has not yet been approached with a redevelopment plan, a BRA spokeswoman said.
The condo association’s filing added, "The entire $9.9 million purchase price is being financed by the Bank. There appears to be no actual equity; this deal so completely departs from any standard commercial loan transaction, especially in this market, that one can readily infer that, if the buyer does not obtain certain permits, it can walk or there will be a drastically reduced purchase price."
At the August auction, many attendees argued the marina’s former owner, Yovette Mumford, had grossly overpaid for the waterfront property. Mumford, the former sister-in-law of Congressman Ed Markey, took the waterfront gem from Modern Continental for $11.7 million in 2005. Auction attendees told Banker & Tradesman that Yacht Haven’s marina business wasn’t worth nearly that much, and that Mumford could have only justified the purchase price by redeveloping the site and operating it in violation of a series of deed restrictions.
No private bidder came close to matching the new $9.9 million sale price at auction, with most bidders quitting the action at $5 million. In 2005, a CB Richard Ellis appraisal for Northern Bank pegged the property’s market value, as an operating marina, at $6.9 million. CBRE estimated its market value as a marina and condominium complex at $14.3 million.
