GREAT BARRINGTON – Buyers of two condominiums in Powerhouse Square are asking the city to release them from liability for the developer’s more than $ 200,000 in unpaid property taxes, and the city refuses.
In a memorandum of understanding proposed last month, an attorney for one of the Powerhouse contract buyers is asking the city to release two of the units from liability for back taxes that then amounted to $ 232,000. The bill now stands at just over $ 214,000, after recent payments, according to city tax collector and treasurer Alicia Dulin.
The problem is delaying those two sales at the 22-unit condominium and retail complex on Bridge Street that is home to the Berkshire Food Co-op, which brought an action against Powerhouse in Berkshire Superior Court last summer. for not having kept its promises and for a construction which was a “disaster”, according to the complaint.
The proposed contract also stipulates that the proceeds of these two sales will go towards taxes. Of the two buyers who have requested compensation from the city, one is under contract for $ 385,000; the other for $ 550,000.
Dulin said that local developer Benchmark Development’s delinquency began in November 2019 and consisted of a tax bill of $ 5,780 as of 2020, and that this could enter the tax title in the coming weeks. Three 2021 tax invoices amounting to $ 208,335 cannot enter the tax title until 14 days after the sending of the notices of formal notice. The company has accumulated approximately $ 10,000 in total interest on unpaid invoices; it’s now $ 5,000.
City manager Mark Pruhenski said he refused to sign the memorandum because it does not help the city create an exemption.
“Like all owners in the city, if they go more than a year without paying, their property becomes a tax deed,” he said. “We don’t treat them any differently from any other taxpayer who owes us money.”
The developer has not approached the city to clear the back taxes, Pruhenski said.
Peter Puciloski, the lawyer who drafted the exoneration proposal, explained what this could mean for buyers. He said the developer’s bank can demand the money from these products because the bank is now in control. If the city takes back ownership, it will include the units and common areas, since the delinquency began before the condos were legally declared in March 2020.
“I’m worried about this, which is why we haven’t closed,” Puciloski said. “We will leave if there is no resolution soon. “
Still, a tax take could help buyers, who could then get the city deed, and the city would get the proceeds, he said.
Michael Charles, director of Benchmark with Brian Cohan, said they were working to pay taxes but declined to comment on the reasons the company is late. He said they are “ultimately not concerned”.
A few units are available in the building and most have been sold, Charles said. The coronavirus pandemic, while initially slowing sales in the building which was completed in 2019 and ready for occupancy in March 2020, quickly spurred sales as people moved from cities to work remotely in the Berkshires, he added.
“People who were planning to come later, to retire, came earlier and are living there now,” Charles said.
Southern Berkshire Registry of Deeds records show an increase in mortgages for units in 2021.
However, several retail and office spaces along the street are empty due to the economic downturn, Charles said. The pandemic did not stop plans for Benchmark’s second 27-unit complex on the same campus, but delayed it due to the COVID-induced lumber price spike.
The company will likely innovate at the end of this year or early 2022, he said, noting that it had “some reservations” for units.
Benchmark transformed the top of Bridge Street in 2018 by razing two buildings, creating a parking lot and sidewalks, and constructing a retaining wall at the adjacent Memorial Field. Benchmark estimated early on that revenue from the entire development, when completed, would send around $ 400,000 to city coffers.
The company was criticized last year for violating part of a larger agreement with the city – it was forged from the terms of its special permit – to install new safety net, dugout canoes and Base fence areas at Memorial Field by December 1, 2020, in exchange for using the field’s road to access the land on which it will construct the second building.
Pruhenski said the job is still not done.
The building is valued by the city at around $ 14 million; other assets forming part of the campus are valued at $ 358,500 and $ 283,200, according to the appraiser’s office.
In its lawsuit to court, the food co-op seeks double and triple damages for seven counts, including misrepresentation, implied eviction, breach of contract and breach of recognizance. The cooperative alleges long delays, construction defects that have resulted in leaks, mechanical problems and, most importantly, parking problems. The complaint calls the developers “incompetent project managers, under-capitalized developers and liars.”
Charles did not return a second call about these and other claims.