GloucesterTimes.com, Gloucester, MA

October 10, 2012

'Village' owner buys Magnolia subdivision site

By Steven Fletcher Staff Writer
Gloucester Daily Times

---- — The ownership group that built the Village at West Gloucester subdivision has now bought the defunct, 50-acre Magnolia Reach property off Magnolia Avenue.

Magnolia Reach Capital LLC acquired the 50-acre property from U.S. Bank for $2.45 million in an Aug. 28 auction, City Assessor Bethann Godinho confirmed Tuesday. And the newly formed limited liability company, a division of Restoration Capital LLC, which owns the Village, is planning to pick up where the former developer Abbott Magnolia LLC left off – and fix the problems that Abbott left behind.

The purchase falls into a collection of developments that have re-started over the last year, from the Lupine Lane project in Riverdale to a four-lot development on Bass Avenue.

Abbott Magnolia, a division of Boston based Abbott Homes, started work on the site after it bought it in 2007 for just shy of $3 million. But any work on the site — which only carved out a half-finished cut into the Magnolia landscape — ceased around two years ago.

Last year, the company declared bankruptcy, saying it owed more than $10 million to S/A Group Properties, Health Care Senior Housing Properties, the city, and numerous other debts. U.S. Bank foreclosed on the site in April.

Abbott Magnolia left a mess behind at the Magnolia Reach site between Carter Hill Road and Ryan Road, said Lawrence Smith, managing director of Restoration Capital. The roadway isn’t compliant with the permit, nor is the septic system, he said, and the water retention system isn’t in place correctly.

“The former developer started running out of money and cut corners,” Smith said.

“It’s an absolute mess,” he added, “(but) that’s what we do, we fix messes. We fix nonconforming sites where the developer didn’t have the financial wherewithal to complete the site.”

Smith said his company’s plan isn’t to change Abbott’s plan, which called for 21 duplexes. He said he’ll keep the promises Abbott couldn’t and work to bring the site back into compliance with its permits. Smith said he’s still working with the city on that, and expects to be doing so for a few months.

“We pride ourselves on doing what we say we’re going to do,” Smith said. “Land development and home-building is not that complicated of a business, but you have to do everything you say you’re going to do.”

Smith said the project is relatively similar to his larger company’s Village at West Gloucester project. There, his company built 34 lots and has sold 23 of the homes and sites to date. The development has created a community geared for residents age 55 and over.

The project’s activity kindles along with several other developments in town that have been on hold for a while.

“From the perspective of permitting and new development, there does seem to be a bit of an uptick right now,” said Community Development Director Gregg Cademartori.

Along with the $2 million Lupine Lane project and Haverhill Developer Richard Cretarolo’s four-lot development on Bass Avenue, Cademartori said two other developers have sent plans to the city for projects on Whittemore Street and Essex Avenue.

Home Port development Corporation has filed a plan for 15 residential units at 160 Essex Ave., Cademartori said, and the McNiff Company LLC has filed plans for up to 10 units at the former Cape Ann Forge site at the end of Whittemore Street and Riverside Avenue.

Outside of Gloucester, development has also moved forward on the derelict Cape Ann Tool Company, Michael Rauseo’s Cape Ann Tool LLC bought the site for $1.5 million and plans to build 25 residential units on site.

“There seems to be some life in real market today, that’s what’s causing (our) investment,” said Smith.

Steven Fletcher may be contacted at 1-978-283-7000 x3455, or sfletcher@gloucestertimes.com. Follow him on Twitter at @stevengdt.