New developer holds mortgage on troubled Cambridge Crossing
The auction of a stalled North Cambridge development is scheduled for Thursday, but it’s no longer a bank dealing with bankrupt real estate magnate Joseph Perroncello — now it’s another developer, Broder Properties of Boston and Weston.
Broder picked up the mortgage on the property at Yerxa Road and Rindge Avenue in North Cambridge on May 9, meaning it will benefit from from the auction if the 2.2 acres and potential 63 units. The company may not want to sell; it owns a 10-story building near Boston’s Post Office Square bought in 2007 for $19 million, and has developed condominiums in the South End’s Rutland Square.
“These guys look like real developers,” said North Cambridge resident Charles Teague, a neighborhood watchdog who has been critical the pace of Perroncello’s work on the Cambridge Crossing development and his inability or unwillingness to keep construction from bothering neighbors.
They have called the construction a six-year nightmare of mess and rats, after-hours work and cracking foundations, but complaints dropped off over the years as Perroncello was dragged into compliance with city laws or as people simply wearied of the fight. A case against him was dismissed after seven months because the morning of Dec. 21, before heading to court, he cleaned his construction site well enough to satisfy city inspectors.
He’d filed for Chapter 11 bankruptcy protection Nov. 3, offering a possible explanation for his slowness in finishing the site and contractors’ complaints they weren’t being paid. Still, he lists assets of between $50 million and $100 million on liabilities of between $10 million and $50 million, and a showdown between Perroncello and the previous mortgage holder on Cambridge Crossing — Webster Bank — was canceled because Perroncello vowed he would be able to pay either $9.3 million by March 28 or $9.9 million by May 13. The vow delayed an auction of the property a third time.
“It seems rather apparent that it is virtually impossible for the debtor to close this transaction by May 13,” said Webster Bank attorney Thomas S. Vangel, of Boston’s Murtha Cullina LLP, in a May 5 court filing.
Instead, Perroncello proposed to the bankruptcy court that day that he would transfer his interest in the property to a new company called Metric Corp. and its principal, Geoffrey Caraboolad. Webster Bank was skeptical of the deal, in part because there was no formal agreement, only “an agreement in principal,” and no paperwork showing funding from the named financial backer, Boston Private Bank.
“Webster Bank has had absolutely no interactions or prior dealings with the new entity in this matter, nor does it desire any such interactions or dealings,” Vangel wrote of Metric Corp. “It appears that the debtor is attempting to gain leverage to force an extension of the May 13 deadline, which Webster Bank is not willing to do.”
Four days later, on May 9, the bank washed its hands of the matter, selling the mortgage on the $15.5 million property to Broder.
While neighbors feared Perroncello would manage to buy back his own property when it went to auction, it’s possible now that the ones auctioning it off — at 11 a.m. Thursday at 120 Rindge Ave., through Quincy firm Daniel J. Flynn & Co. Inc. — will buy it themselves, finish the remaining two buildings on the former Catholic school and convent and begin renting.
In March, Perroncello said Cambridge Crossing was 75 percent done but needed $3.5 million more worth of work. He said he’d already put in $9 million of his own in addition to the bank’s $15.5 million.
Eric Svenson, managing and founding partner of Broder Properties, was called Tuesday for comment.