Lender keeps Old Port buildings in foreclosure auction in Portland

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PORTLAND — About 30 people milled about the Havana South restaurant on Wharf Street last Friday morning, awaiting the foreclosure sale of six high-profile buildings in the Old Port.

Real estate brokers and potential investors exchanged small talk in a bright glass-walled room, where tables had been cleared out for the auction.

The anticipation in the room increased as the advertised 10 a.m. start time came and went.

It seemed everyone was eager to know who would end up with the buildings at 432, 434, 436 and 446 Fore St. and 42 and 50 Wharf St., which were purchased in 2007 for $8.3 million.

The auction was delayed while a potential buyer waited for his banker to come to the restaurant and certify a $50,000 check, which was required to be able to bid on the properties.

Lee Lowry, the attorney representing the mortgage holder on the buildings, said his law office handles several foreclosure auctions a year. But this one was different.

“This auction has more interest because of the location,” Lowry said.

When the auction finally began at around 10:30 a.m., there were seven potential buyers. But only three placed bids – mortgage holder BACM 2007-3 Wharf Street, LLC; building’s owner Old Port Retail Holdings, and J.B. Brown & Sons. 

Lowry opened the bidding on behalf of the lender at $3.675 million.

John LaPlante, of J.B. Brown & Sons, bid as high as $4 million before bowing out. LaPlante said the company was looking for a good deal on the properties in the heart of the Old Port.

“We thought the properties would sit well with our other holdings,” LaPlante said.

After J.B. Brown & Sons dropped out, the lender and Old Port Retail Holdings repeatedly outbid each other by $100,000 increments.

At the end, the lender prevailed with a bid of $5.9 million.

There are several businesses in the buildings, including Gorgeous Gelato, Blazin’ Ace, Foreplay Sports Pub and Pearl on Fore Street, and Havana South and Oasis on Wharf Street.

Prior to the auction the businesses had not been told how they would be affected by the auction, if at all. Afterwards, Lowry did not respond to a request for comment about the future of the property.

Tim Soley, of East Brown Cow, was also one of the registered bidders who hoped to get a deal on the property.

Soley, who owns a large portion of the opposite block on Fore and Union streets, said the bids quickly went beyond the limits of a viable investment.

“The location is great,” Soley said. “But the condition of the buildings is not excellent.”

Although the lender is not saying what its plans for the buildings will be, Soley said he expects the property to be placed on the market soon.

“Presumably, they will hit the market, as most lenders don’t intend, or have any appetite, to hold foreclosed assets any longer than they need to,” Soley said. “I think there is more energy out there and appetite to own those properties than were even represented by bidders at the action.”

Randy Billings can be reached at 781-3661 ext. 100 or rbillings@theforecaster.net. Follow him on Twitter: @randybillings.

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