A 3,500% net profit (SEE CORRECTION) in 6 years; Historic building sold for $100 in '98, $350,000 in '04.
The following correction was published March 25, 2007:
WORCESTER - The historic church on Summer Street was purchased in 1998 for $100 and sold for 3,500 times that amount in 2004. That sale price was 349,900 percent higher than the 1998 price. A headline in the March 18 Sunday Telegram carried the wrong percentage. The headline also incorrectly described the price differential as net profit. A city investigation into sale of the property is under way.
WORCESTER - The historic church on Summer Street purchased by a private developer in 1998 from a quasi-city agency for less than $100, with the promise to restore it and occupy office space there within a two-year deadline, was later sold for $350,000. There are no records of work done on the building.
The Mission Chapel, 205 Summer St., which was last occupied by the Second Baptist Church, remains boarded up today with no visible signs of any improvements.
The 2004 sale for $350,000, completed six years after the promise of restoration was made to the Worcester Redevelopment Authority, could have implications on the deed to the property, which the current owner is trying to sell to another developer, the Telegram & Gazette has learned.
Assistant City Manager Julie Jacobsen, who now leads the WRA through her role as the city head of economic and neighborhood development, said last week she became aware of the building's history within the last month and is researching the property's land records.
She said she is doing so to assist another developer who has interest in the property, to facilitate the redevelopment of the old church. But she also acknowledged the past sales of the property, and the failed promise to redevelop it, could taint the land's deed and the possibility of its immediate redevelopment.
"We know there are some issues that need to be looked at," Ms. Jacobsen said in response to questions about the property. "I'm just trying to get to where this whole thing started and where we are right now."
The WRA seized the Mission Chapel property by eminent domain in 1993 as part of the development of the Worcester Medical Center project. It was one of about 30 land parcels taken for the construction of the medical center.
But the chapel, built in 1854, never became part of the project, after Preservation Worcester and other historic groups argued against its demolition, citing its historical significance. In 1998, the WRA sold the chapel for less than $100 to PZP, LLC, a Worcester-based private development group that promised to restore the old chapel and relocate its office space there.
WRA officials said at the time the building needed some $1 million in repairs, which the quasi-public agency itself couldn't afford, so it was offered to PZP on the condition it be restored. The promise was entered into deed restrictions filed in the Worcester Registry of Deeds.
According to the deed, the WRA could reclaim the property if the promises to redevelop and occupy the chapel weren't kept within the two-year time frame.
In 2001, the WRA amended some restrictions so PZP could lease space to a restaurant. The agency said it would still locate its offices in the basement.
But the building remains vacant and boarded up eight years after the initial promise to the WRA was made. Within that time, PZP sold the property for $350,000, 3,500 percent more than what it initially paid. The sale occurred in 2004.
Ronald A. Panarelli, at the time of the sale a principal with PZP, which goes under the name Tristano Restoration, said last week his agency had options to sell the building along with the restrictions. He also said his company lost money on the property, spending far more on repairs than the $350,000 received in the follow-up sale.
"We put a lot of work into it. We put a lot of money into that building," he said. "All you have to do is look into it, and you'll see how much work was done.
There are no records, however, of any building inspections certifying work at the property since the WRA sold it, according to a review of city Code Enforcement Department records. In 2000, permits were issued for underground sewer work, and a rough inspection of the property was completed. But city records show no follow-up investigations to certify the work was completed, usually required in permitting procedures.
And the building remains boarded up today, with no occupancy. There have been proposals for a restaurant, but now the building is for sale again. Ms. Jacobsen said she was approached by a developer inquiring into the possibility of loosening the WRA restrictions on the property, so it could be developed for purposes other than office space or a restaurant.
But, she said, follow-up research on the property records raised confusion about the original deeds and now there are questions as to whether or not the title is still clean.
"That could be an issue, that's why we need to do this work," Ms. Jacobsen said of the further checking. "That's what we need to look into, and that's why we are looking into it." Ms. Jacobsen stressed the city wants to see the parcel developed, and a developer has showed a strong interest in the property.
"We're excited with the interest in this property and want to see it developed," she said, but again acknowledged the necessity of more research into the situation.
Complicating that research is the reorganization of the WRA seven years ago, before Ms. Jacobsen worked for the city. When the building was originally sold, the WRA was quasi-public with a five-member board that had its own executive director and staff. Michael S. Latke served as the executive director at the time, and the board members were John H. McCabe; Francis X. Sena; Linda C. Nelson; the Rev. Lee F. Bartlett; and Juan A. Gomez.
In 2000, then-City Manager Thomas Hoover reorganized the WRA so the city head of economic development would serve as executive director. The staff was dissolved, and other city agencies now conduct the work previously done by the WRA.
Ms. Jacobsen said the research into the building's history will require a more in-depth search for the old WRA records, including meeting minutes, votes taken by the WRA board, and other records when the sale was made in 1998.
"There's a lot of history here," Ms. Jacobsen said. "There are a lot of issues that need to be looked at. The chapel is listed with the Worcester Historical Commission and the national Register of Historic Places, according to Deborah Packard of Preservation Worcester. She, too, said her agency would like to see the chapel developed, as long as it maintains its historic integrity and features.
"Its location makes for a prime piece of property," Ms Packard added.
The building was erected in 1854 as a chapel for the area's then-growing immigrant population, according to Preservation Worcester records. Its founder, Ichabod Washington, paid $14,000 for construction to provide for Sabbath meetings and for scholars to conduct research. Mr. Washington was a deacon in the original Evangelical City Missionary Society.
Over time the building was used as commercial space but in 1966 the Second Baptist Church opened it as a chapel. At the time, the Second Baptist Church had the largest congregation of blacks in the city and the building began serving minority groups.
The Rev. Thurmond Hargrove, the church pastor, recalls buying the property at the time and living there. He has kept the robe he used during church meetings, and says he knows members blow a kiss whenever they pass the chapel.
The Second Baptist Church moved to 14 Hammond St. after receiving an out-of-court settlement with the WRA for the eminent domain seizure. The settlement totaled about $600,000 for the property and relocation expenses.
Rev. Hargrove said his congregation has grown accustomed to its new property, but many among his 300-member congregation still maintain fond memories of their former place of worship.
The congregation originally fought the seizure of the chapel by eminent domain.
"We stayed as long as we could," he said, citing the building's history as an evangelical chapel for immigrants and poor people.
"That's who we were," Rev. Hargrove said. "We were the poor and we bought it."
Contact Milton J. Valencia by e-mail at email@example.com.
ART: PHOTO; MAP
CUTLINE: (PHOTO) The historic building at 205 Summer St., Worcester, now boarded up, was last occupied by the Second Baptist Church. (MAP) Former 2nd Baptist Church
PHOTOG: (PHOTO) T&G Staff/STEVE LANAVA (MAP) T&G Staff/STACEY ARSENAULT
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|Publication:||Telegram & Gazette (Worcester, MA)|
|Date:||Mar 18, 2007|
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