Clock Shop Foreclosure Accord Reached

The current ​“redevelopers” of an old Hamilton Street clock factory are now looking to sell rather than rebuild the derelict industrial property, according to a new court-filed agreement.

That’s the latest in the years-long saga around the proposed redevelopment — and current tax foreclosure — of the former New Haven Clock Company factory complex at 133 Hamilton St.

The 150,000 square-foot former clock factory complex is owned by Taom Heritage New Haven LLC, a holding company controlled by the Portland, Oregon-based development firm Reed Community Partners, which bought the decaying post-industrial property in 2018 for $1.4 million.

According to a recent a flurry of legal filings in an ongoing tax foreclosure case that the Elicker administration first filed in state court in March 2022, that property is tentatively scheduled to get hit with a foreclosure judgment and sold on Dec. 16 thanks to a $235,710 debt stemming from four years of unpaid taxes and associated fines. 

It’ll be foreclosed upon and sold in December, that is, if the current owners aren’t able to find a new buyer first. Which, according to an April 10 court-filed stipulation signed by a lawyer representing the city and a lawyer representing Taom Heritage New Haven, the current owners are actively trying to do. If a judge approves the court-filed agreement, the city would then have the authority to sign off on such a sale deal before it goes through.

“Plaintiff acknowledges that Defendant is in the process of marketing the Premises for sale to a third-party buyer (a ​‘Buyer’),” the April 10 stipulation reads. ​“Plaintiff shall have the right to review and approve the sale of the Premises to any Buyer within sixty days of Defendant’s transmittal of a purchase and sale agreement, letter of intent, memorandum of understanding or other pre-contract term sheet (a ​‘LOI’) identifying the terms on which Defendant will sell the Premises to Buyer. The Plaintiff’s determination to approve or disapprove a Buyer shall be made, in good faith, based on the merits of the Buyer and the proposed project and not on any other considerations whatsoever.”

This proposed city-redeveloper legal agreement comes roughly five years after the Reed Community Partners affiliate first bought the still-derelict property. It also comes a half-decade after the current owner landed a seven-year tax abatement deal from the alders, won site plan approval from the City Plan Commission to convert the complex into 130 new affordable apartments (with a third to be reserved or artists), and secured $400,000 in city funds and $800,000 in city-managed federal funds and a $4 million state loan for environmental remediation at the radium-contaminated property.

The new court-filed documents in the ongoing tax foreclosure lawsuit include an April 10 five-page proposed stipulation signed by both city-hired attorney Christine Ciociola and Taom-hired attorney Jay Lawlor, as well as a motion for judgment of foreclosure by sale and an amended complaint, both of which were filed by the Elicker administration on Friday.

The April 10 filing — which has not yet been approved by the court — lays out a host of details of if and how the unredeveloped ex-clock shop factory will be sold and its tax debts discharged. Those terms include:

• A judgment of foreclosure by sale shall enter in favor of the city, with the 133 Hamilton St. property being assigned a sale date of Dec. 16.

• The amount of real-estate-tax debt on the property as of March 31 is $235,710.72. That’s thanks to unpaid taxes and accumulated interest from the 2018, 2019, 2020, and 2021 Grand Lists. The stipulation states that additional interest shall continue to accrue at 18 percent per year. ​“No payments on the indebtedness shall be tendered or accepted from this date to the date of judgment, provided that judgment enters in the ordinary course, without undue delay, regardless of cause, upon the filing of a motion for judgment to be made on or about the date of this Stipulation.”

• The fair market value of the property is set at $3,170,000. Upon completion of ​“certain environmental remediation work” at the property, that fair market value shall rise to $4,550,000.

• In addition to having the authority to sign off on any prospective sale deal between the current owners and new owners, the city shall also have the right of first refusal. That is, the city ​“shall have the right to step into the place of any Buyer who enters into a LOI as stipulated herein. If Plaintiff exercises its right of first refusal, it shall acquire the Premises on terms materially identical to the terms stipulated in the LOI.”

• If the current owner enters into a contract to sell the property to the city or to a third-party buyer on or before the Dec. 16 sale date, then the current owner may move to open and extend the sale date ​“by a reasonable period of time in order for Defendant to close on the sale of the Premises.”

• In regards to the site’s remaining needed environmental remediation, the stipulation states: ​“The Premises are in the process of being remediated for certain environmental contaminants. Plaintiff acknowledges that that work will be funded, in part, through certain funds held by the Connecticut Department of Economic and Community Development (the ​‘DECD Funds’). Plaintiff further acknowledges that the completion of that work will enhance the value of the Premises and make it more likely Defendant will be able to identify a suitable buyer for the Premises. Unless required by law, government or regulatory agency, Plaintiff shall take no actions which would adversely affect the Defendant’s access to the DECD funds. Plaintiff acknowledges that its agreement herein is a material inducement to Defendant’s willingness to enter into this Stipulation.”

In a Monday afternoon phone interview, city Economic Development Administrator Mike Piscitelli described the city-developer-agreed-upon stipulation as charting a ​“pathway forward” for this project to ultimately get built. 

The agreement ​“concerns a commitment on the part of the city to ensure that the project finds its way to a responsible developer” as well as to the ​“adaptive reuse of this distinctive” and historic property.

He emphasized that the agreement gives the city the right of first refusal for the property’s sale, and he said that the city may renegotiate some of the deals it first inked with the current owners five years ago.

From the city’s perspective, why does he think this project didn’t work out with this particular redeveloper?

“The shutdown period in the pandemic,” Piscitelli replied, as well as ​“the extended time to clean up the property to remediation standard.” He also said ​“the curing costs became very substantial” when back taxes began to pile up for the current owners.