MERIDEN — The upcoming bankruptcy auction of two downtown properties will likely highlight the challenges of securing investment dollars in long-vacant properties.
A New York bankruptcy court moved the auction to sell 9-11 and 13-17 Colony St. to Dec. 15, giving auctioneer Joshua Olshin more time to market the properties.
Olshin, a managing partner at Auction Advisors in New York, was hired by property owner CBD Colony Street LLC to list and publicize the buildings.
The auction will be held on site, Olshin said. He has advertised the properties through the internet, print, and direct solicitations to both national and regional audiences in hopes of finding a buyer.
The bankruptcy auction aims to generate as much cash as possible to restore funds to CBD & Sons LTD, which claimed it was defrauded more than $750,000 on the properties by a former trustee. CBD Colony Street puts the value of both buildings at about $300,000 and owes the city about $98,000 in back taxes and maintenance liens.
City officials had opposed the auction due to fears the city would not have control over who may end up with the key downtown properties. But Judge Sean Lane ruled the auction could move forward and the top qualified bidder must be agreed upon mutually.
The court will intervene in the event of a conflict, according to court records.
“We are marketing the properties in line with the court order,” Olshin said in an email. “We have had some interest, though as you know downtown Meriden is a tough sell. Nevertheless, the buildings have a lot of style and are very well situated, so we hope someone will pick it up as a development opportunity.”
The properties have generated more residential interest than commercial, Olshin added, although someone suggested a restaurant on the top floor of one of the buildings with views overlooking the Meriden Green. A recent survey of downtown stakeholders reported a restaurant or a brewery would be the type of use to spur activity on Colony Street.
“We don't expect bidding to be too fierce, but at some point this will be an attractive investment,” Olshin said. “Especially, as it seems like interest in the local real estate marketplace has been picking up a little.”
Representatives from the city could not be reached for comment about the upcoming auction. Sale pending
One bright spot in the city’s downtown is the pending sale of 61 Colony St., the former home of Catholic Family Services. The 14,354-square foot former bank and office building was reduced from more than $400,000 to $329,000, according to Toby Brimberg, a vice president of OR&L Commercial.
There is a contract on the property and the sale is expected to close this month, Brimberg said. The property was on the market for three years and the new owner, Yvonne Bailey, plans to open a real estate office on the first floor and has city approval to add apartments on the upper floors.
“Colony Street is a difficult market,” Brimberg said. “People interested (in the auction) will be in the redevelopment market. My buyer is going to make some significant improvements. I think it will do pretty well. The buyer is a user who is a local resident and very familiar with the area.”
Brimberg said the train station that opened in June 2018 and the $14 million Meriden Green are positives for Colony Street.
He also agreed that a restaurant could help attract investors if there is a market of people willing to drive downtown to dine.
“I have a buyer who is going to do a mixed-use development and run her business out of there and have apartments,” Brimberg said. “That’s all positive.”
The auction of the two buildings is set for Dec. 15 at 10 a.m. on the premises.