The owner of several large properties in downtown Ansonia has until Oct. 5 to come up with $2 million or lose two of his properties through foreclosure.
Moustapha Diakhate’s Washington Management bought roughly 10 acres of former Farrel Corp. properties on both sides of Main Street in January 2013, amid much fanfare and promises of redevelopment.
But no redevelopment plans have been submitted.
Now two of the company’s properties, 501 E. Main St. and 65 Main St., are under the foreclosure threat.
The East Main Street property is Farrel’s former process lab, while nearby 65 Main St. is a 2.65-acre complex of industrial and office space, with a 108-space parking garage underneath.
In addition to the foreclosure threat, Diakhate’s company has $3.6 million in blight fines pending against it from the City of Ansonia, where officials claim he’s done little to fix the long-dilapidated property at 501 E. Main St.
Shaw Growth Ventures, a Jericho, NY-based mortgage lender, sued Washington Management April 23, saying Diakhate has defaulted on a $2 million loan he signed when he bought 501 E. Main St. and 65 Main St.
“Subsequent to the sale of your loan we have determined that your loan is severely past due and an outstanding balance in the amount of $2,396,459.59 through 4/1/15 is due and payable immediately,” a letter from the company read.
Shaw Growth Ventures took over Diakhate’s mortgage from his initial lender in March.
The lawsuit sought possession of the two properties.
On Aug. 24, Judge John Moran granted Shaw’s foreclosure request, setting Oct. 5 as the last day Diakhate can “redeem” his interest in the properties by paying back the debt owed.
Appraisals filed in the case value 65 Main St. at $820,000 and the process lab at $210,000.
The Valley Indy left messages Thursday for Shaw Growth Ventures, as well as the lawyer representing them in the foreclosure lawsuit.
The Valley Indy also sent an email to Diakhate asking whether he has any plans to try to stave off the foreclosure.
City officials said Thursday they’re taking a wait-and-see attitude.
“It’s a new face at the table,” said John Marini, the city’s corporation counsel. “We don’t really care who is the owner as long as the owner is interested in developing the property.”
Meanwhile, Ansonia Aldermen may strike a deal to redevelop two long-vacant downtown properties next to Diakhate’s holdings as early as next month, according to city officials.
Mayor David Cassetti gave updates on several projects in works during the Board of Aldermen’s monthly meeting Tuesday (Sept. 8).
He said his administration is working with Woodbridge developer Jerry Nocerino on a “due diligence agreement” regarding a pair of downtown buildings — the “ATP” and “Palmer” buildings at 497 E. Main St. and 153 Main St., respectively.
Nocerino — who is also redeveloping several properties on the north end of Main Street with visions of downtown as a “restaurant Mecca” — wants to develop a mixed-use complex with retail space and nearly 100 apartments.
The buildings, owned by the city, have about 100,000 square feet of space.
In March the city asked interested developers for proposals to buy the two properties — two eyesores totaling about 100,000 square feet.
They received two, one from Diakhate’s Washington Management and one from Copper City Development, a limited liability corporation in which Nocerino is a partner with Shelton accountant Charles Smith.
But Diakhate’s bid was deemed “ineligible” because it was not sealed and did not include a required $10,000 deposit.
“Due Diligence” Agreement
“My staff and I have worked with the developers on a due diligence agreement and will be presenting that to you very shortly for your approval,” Cassetti told Aldermen Tuesday.
“The agreement will outline a timeline of spec conditions regarding the redevelopment of the ATP and Palmer buildings, paving the way for 90 residential units and retail space in two buildings which have sat vacant in our downtown for many years,” the mayor went on.
The land has a total appraised value of roughly $3.5 million, but Cassetti said in May he’d be open to selling it for nominal value if the deal included a “clawback” provision allowing the city to take possession if the development doesn’t move forward by a certain date.
That is precisely what happened the last time the city struck a deal to sell the buildings — in 2008, with New Jersey-based Duke Realty, which walked away from the deal in 2012.
In the time since, the city tried three times tried to sell the buildings. But no bids for the properties were received.
Marini said after Tuesday’s meeting that the “due diligence agreement” expands on Nocerino’s original proposal.
“There’s a lot of detail in terms of what we expect of the development,” he said. “There’s timetables, those are the safeguards with clawbacks that we talked about before.
“There’s basically an entire schedule leading up to a potential transfer of title, and that comes with protections built in to protect the city and to make sure the development actually occurs on a timely basis,” Marini said. “So there’s going be a lot more meat than what you’ve seen previously.”
He said officials plan to discuss the potential agreement with Aldermen behind closed doors next month, which is allowed when public agencies are mulling real estate deals.
If the Aldermen like what they see, they could approve the deal then.
Nocerino’s proposal for the properties included a budget (posted below) detailing $9 million in work they’d invest in the redevelopment.
The proposal also mentioned a possible tax abatement deal, but Marini and Sheila O’Malley, the city’s economic development director, said Thursday that the “due diligence” agreement doesn’t involve a tax abatement, discussion of which will come later in the process.