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THE SALEM NEWS - O'Shea fetches $1.47M at auction

June 01, 2017

By John Castelluccio Staff Writer


PEABODY - The historic O'Shea building, a cornerstone in Peabody Square, sold for $1.47 million Thursday afternoon at a foreclosure auction that attracted a crowd of interested bidders and city officials.

The high bidder, Pat Todisco of Todisco Properties, said he and his son share the mayor's vision for the square and the 9 Main St. property. They plan to gut the interior and have a restaurant on the ground floor with 21 apartments above - exactly the type of project city officials have said they hoped to see there.

"What sold me on (this) was that the mayor really has a passion for the downtown," Todisco said after putting down his $50,000 deposit and signing the paperwork.

The deteriorating conditions inside the three-story building were evident as the bidding got underway in a large, open room on the third floor that overlooks the square. No one was willing to bite at the suggested opening bid of $2 million. Bidding began at $500,000 instead and quickly escalated from there.

Todisco and the runner-up bidder got into a heated exchange afterward that lasted several minutes, causing the auctioneering staff and others to intervene.

The Todiscos first looked at the building three months ago, he said, and even tried to buy it at that time, but then decided to wait for the auction upon learning of multiple debts tied to the property.

"This is new and big to us," he said, explaining he and his son Steven have mainly taken on smaller-scale projects. Their property management company is based in Peabody and the elder Todisco has lived in the city for 30 years.

 

Bankruptcy and debt

The auction brings to a close developer Dan Bandar's troubled ownership of the downtown property. 

Bandar purchased the building in 2013 for $1 million with grand plans for a boutique hotel and upscale restaurant. Those plans slowly fizzled over the years as Bandar struggled to find investors, according to city officials.

Foreclosure proceedings were initiated this spring by Lowell Five Cent Savings Bank, which holds the mortgage, and culminated in Thursday's auction.

Bandar also filed for Chapter 7 bankruptcy in federal court on May 10. According to those documents, he owes the bank about $800,000 for the LLC associated with 9 Main St.

In addition to covering that debt, sale proceeds will cover about $33,000 in back taxes and other fees Bandar owes the city, as well as the outstanding balance on a $250,000 loan from the Peabody Community Development Authority. That amount is approximately $220,000, according to the city.

Todisco said he already discussed those details with Mayor Ted Bettencourt prior to Thursday's auction and assured him the city would get its money back "one way or the other" if he were the winning bidder.

Among the onlookers was commercial broker Brian DApice, who sold the building to Dan Bandar four years ago. He said he was interested to see who picked it up now.

Community Development Director Curt Bellavance and Building Commissioner Al Talarico were also on hand, along with city councilors Pete McGinn and Joel Saslaw. In total, the auction attracted about 30 people.


Todisco's plans

Todisco said he and his son will be financing the project with their own resources, and they plan to start work as soon as they close.

"There are no investors," he said. 

They have already had contractors, engineers and an architect walk through the building. Within 60 days, he said, a demolition crew should be on scene gutting the interior.

The facade, the most striking feature of the building, will be spruced up with exterior lighting, he said. Storefront awnings will also come down.

The O'Shea building, which contains about 30,000 square feet, is currently configured as separate commercial units on the first floor with office space and other larger rooms on the second and third floors.

Todisco said the new apartments will be mainly one-bedroom units with a few two-bedrooms. They hope to work out a parking arrangement for tenants with the city at nearby municipal lots.

The Todiscos are entering the downtown market in a big way. On March 31, they bought the building next door at 11 Main St. from developer Norman Lee and his partners for $1.75 million.

Lee bought it in 2013 and fully renovated the upstairs into 10 apartments, but didn't do anything with former Congressman John Tierney's previous district offices on the first floor.

Todisco said they plan to bring in a restaurant there as well, and will look at moving their home office from Jennifer Lane down to Main Street.