MERIDEN — A New York bankruptcy court judge approved an auction set for Dec.15 for the sale of properties at 9-11 and 13-17 Colony St.
The two buildings have fallen into disrepair and are delinquent on taxes, water and sewer bills and maintenance liens owed to the city. The property owner and debtor CBD Colony Street LLC formed the new entity and filed for bankruptcy on the eve of a foreclosure auction brought by the city in May.
The city fought the bankruptcy filing and CBD Colony Street’s motion to appoint an auctioneer to market and sell the two buildings. According to records in the New York Southern District Bankruptcy Court, the city has a qualified bid of $153,000 should it wish to bid on the property. CBD has claimed the properties are valued at $300,000.
City Manager Timothy Coon said this week the city has no interest in purchasing the property, which is why it attempted to hold its own auction last spring. The property is considered prime downtown real estate and could be an asset to revitalization in the hands of the right owner, city officials said.
Bankruptcy court Judge Sean Lane laid down some guidelines for the auction which could be on the premises or virtual based on pandemic restrictions determined by the auctioneer and decided no less than one week before the auction.
According to court filings, Auction Advisors shall immediately prepare and install custom signs at the properties. The auctioneer shall also immediately conduct a print media campaign in local and regional papers and will also post notice of the auction on open as well as subscriber-based websites, including premium postings on all the major commercial real estate websites, such as Costar, Loopnet, CREXI, and others as the auctioneer deems appropriate.
The auctioneer will create a custom webpage and marketing materials, as well as set up an online data room. The auctioneer will also launch a social media campaign utilizing Facebook, LinkedIn and Google Adwords to market the auction. The auctioneer shall identify and target buyer brokers, and a co-broker will be offered. The auctioneer will prepare and circulate a press release with the expectation of getting editorial coverage.
Physical inspections/showings of the property will be scheduled by the auctioneer who will also prepare a direct email solicitation to go out to several thousand in the market buyers and investors. Lastly, the auctioneer with implement a direct marketing campaign by reaching out to its industry contacts, investors and other potential buyers, according to the judge’s ruling. City has say
The city opposed the auction because it wanted more control to vet the financial stability and redevelopment plans of any successful bidder. Lane addressed the issue in his ruling.
“The debtor together with the city of Meriden shall jointly determine whether a submitted bid is a qualified bid,” Lane ruled. “The debtor shall designate the successful bidder and backup bidder at the conclusion of the auction, which designation shall be subject to the consent of the city of Meriden, giving due regard to the financial and other suitability of the successful bidder and back-up bidder to remediate and otherwise develop the properties and maintain them in compliance with state and local law.”
The city and CBD must come to an agreement over qualified bidders and any disputes must be brought to the bankruptcy court. A post-auction court hearing to discuss a pending sale is set for Dec. 9.
City officials refused to comment on the pending auction and referred questions to the city legal department.