Southwest Harbor housing property auctioned

ELLSWORTH – A new company represented by housing developer Pamela Gleichman was the high bidder Friday in the government’s foreclosure auction on one of Gleichman’s low-income housing properties in Southwest Harbor, a federal official confirmed Monday.

The high bidder, Wal-Bos LLC, filed papers Monday with the Secretary of State’s Office to form a Maine limited-liability company, a state clerk said. Until the staff processes the application, which will take up to two weeks, there is no public information available about the firm, the clerk said.

Michael Grondin, a multifamily housing specialist for the Rural Development Agency, which financed the 25-unit East Ridge Apartments project in 1988, also did not have any information on the winner.

“The deal isn’t closed yet,” Grondin said Monday. “They have 30 days to come up with the money.”

Gleichman attended the auction and bid on behalf of Wal-Bos, Grondin said. She paid the required 5 percent deposit in a certified check Friday, Grondin said. The auction was held at the Hancock County courthouse in Ellsworth.

East Ridge Associates of Portland, of which Gleichman was president and one of two general partners, owed Rural Development about $1.4 million when the agency filed its foreclosure suit last April.

Rural Development was scheduled to auction off the property last Dec. 12, but was delayed after East Ridge Associates filed for bankruptcy moments before the auction opened.

As with any foreclosure sale, the former owner is allowed to bid at auction, Grondin said. However, Gleichman’s relationship to the new firm is unknown, Grondin said.

Neither Gleichman nor her attorney, George Marcus of Portland, could be reached Monday for comment.

Grondin said Rural Development has not yet decided whether to write off the $400,000 East Ridge Associates will still owe once the sale is completed.

Under the terms of the foreclosure, the property must remain a low-income housing complex through August 2008, when the original 20-year note would have been paid off.

Grondin said a dozen bidders participated in the auction Friday. The bidding started at $270,000.

An estimated 20 to 25 bidders showed up for the originally scheduled auction last December.

The East Ridge Apartments project is only the second one foreclosed on by Rural Development in Maine, Grondin said. The first was another low-income housing complex owned by a Gleichman partnership in Washburn, which was sold at auction in 2002.

Gleichman, who forms a limited-liability company for each of her housing developments, still has almost 30 outstanding loans with Rural Development in Maine. She is considered one of the nation’s largest housing developers, with an estimated 50 projects and 5,000 units.