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December 8, 2008

Framingham Development Slowed Due To Bankruptcy | Virginia-based developer owes $450,000 in local taxes

A bankruptcy case and a half million dollar unpaid property tax bill have brought in to question Danforth Green, a 525-unit housing development in Framingham.

RTM Framingham LLC, the developer in question, is now in U.S. Bankruptcy Court in Boston after a creditor, BRS Partners LLC, filed an involuntary petition with the court claiming it was owed $15,000 for an unspecified contract. The petition was filed on Oct. 14, and RTM has until Dec. 8 to file a response, as the two parties continue to work on a possible agreement, according to court documents.

BRS Partners is based in Vienna, Va., and offers companies real estate development assistance and advice. It lists Steve Vento as its manager.

RTM Framingham is part of RTM Capital, also of Vienna, Va., which is involved in real estate development and investments. Its principals are Joseph M. Camarda and Bruce M. Arinaga, who declined to comment for this story. According to the RTM Capital web site, the company acquired the Framingham project for $35 million.

Framingham’s Planning Board is continuing with hearings regarding the project after a slump in the development process, according to Jay Grande, the town’s planning director. Certain revisions have been proposed including road plans and sewer details.

“It is Framingham’s first and only planned development,” he said of the large project, which has gone by several names – Sudbury Landing and the Villages at Danforth Farm – since it was first proposed in the 1990s. A planned development usually includes housing that complements each other and also has some retail or commercial development. This development has a number of types of housing as well as a small amount of retail that could include a dry cleaner and a convenience store.

Framingham’s Treasurer Stephen Price said his documents show that RTM owes the town $451,097.10 — $411,050.13 is for real estate taxes for fiscal year 2008 and the first two quarters of fiscal 2009. RTM also owes $50 in fees and $39,996.97 in interest.

Hope Floats

Despite the involuntary bankruptcy and the tax bills, Peter Barbieri, an attorney at Fletcher, Tilton & Whipple of Worcester, who is representing RTM, said the project still has legs.

“We’ll be filing a final set of plans to the town and we’ve had a couple of staff meetings with them, and they’ll be reviewing the plans,” Barbieri said.

The attorney acknowledged that RTM is speaking with its creditors, who understand that once the development plans have received a final approval, the project may be able to move forward.

“I think everyone is in agreement that the value of the property will be enhanced by the approvals, which will allow them to get bank financing for the project,” he said. If the property is approved, then Barbieri estimates it will be another 14 to 16 months after that to finish the project. It hopes to break ground on the project in the spring, he said.

The company has told the town it has no funding or partners at this point, according to town officials.

The project is along Route 126 on 170 acres that used to be the New England Sand and Gravel business, which was owned by several generations of the Generazio family.

It has been a source of controversy, with the adjoining town of Wayland suing the previous developer of the project, National Development, to block the project based on its size, which was originally 665 housing units.

The agreement between Wayland and National Development reduced the amount of housing to 525 units.

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