A strip of South Boston warehouses battered by recession, overrun by homeless squatters and blighted by fire will hit the auction block next week, ending a Chicago developer’s dream of turning a 2.5-acre industrial parcel into a $100 million condominium development to be called Emerald Court.
Auctioneer Paul E. Saperstein Co. is set to auction off the city block-sized parcel Feb. 26, barring a late bankruptcy filing. The site, which contains three freestanding industrial buildings at 320 D St., 307 C St. and 220 West Second St., is near the rear of the Boston Convention and Exhibition Center.
Chicago-based developer MCL Cos. secured city approvals for a 245-unit condo project at the site in early 2007. MCL spent $12.7 million assembling the site. The company envisioned charging buyers up to $600,000 per unit.
But MCL found itself in the market for a massive construction loan at a time when credit markets were beginning to seize up, and lenders who had been throwing fistfuls of cash at luxury condo developers suddenly stopped doing so. As a result, the developer let the property sit – and, apparently, stopped paying bills connected to the site.
Suffolk Construction filed a lien for nearly $100,000 in unpaid work at the site last November. According to Suffolk’s lien, MCL contracted $110,000 in work in June 2007, but had paid the Boston firm just $13,000. The City of Boston attached $52,000 worth of tax takings to the parcel two weeks ago in an effort to collect unpaid real estate taxes.
The site gained notoriety in December, when a fire in one of MCL’s warehouses revealed the existence of more than a dozen homeless squatters at the site. Firefighters rescued one homeless man from the fire.
According to a Boston Globe report from the incident, the warehouse "was sectioned off by the squatters into several illegal mini-apartments that were strewn with debris and dozens of bottles filled with urine." The Boston Herald reported that arson investigators found hypodermic needles and dishes bobbing "in a basin of dirty water."
The foreclosing party is a Natick LLC known as Cottage Emerald Square that had financed MCL’s land assemblage with a $9 million loan. According to paperwork on file with the secretary of state, Cottage Emerald Square is managed by Jay Swanson and Kevin Quinn.
Emerald Court is the second high-profile condominium development parcel to face the auction block in a month. In late January, lenders tried to seize the site of what was to have been the 242-unit Ocean Club in Revere. The Ocean Club’s developer is currently fighting foreclosure in federal bankruptcy court.
