South Woods Farm, the 90-acre Oak Bluffs property that was a key bargaining chip in the settlement of a long-running political and regulatory battle over Connecticut developer Corey Kupersmith’s failed Down Island golf course development may finally be up for auction, or change hands in a private transaction with a Connecticut bank.
The property, off County Road in Oak Bluffs, was originally envisioned as an equestrian themed subdivision with 26 homes, a central pasture, horse barn, riding area, and pond with a trail link to the Land Bank walking trail system. Construction began with two model homes, but was halted after Mr. Kupersmith’s financial foundation fell apart. The property has lain fallow for more than a decade.
The property was set for auction in April 2012, but that auction was postponed after Farlap Development Corporation, the original development company controlled by Mr. Kupersmith, filed for Chapter 11 bankruptcy.
The property was advertised for auction again this spring by JJManning Auctioneers, a real estate auction firm based in Yarmouthport. Again the auction was delayed, after Mr. Kupersmith’s estranged wife, Tara, moved to attach some of the property. The couple is engaged in a divorce case, according to court records.
On April 29, People’s United Bank, the Connecticut bank that now holds the mortgage on the development, sent a letter to potential investors, offering to sell the loans Mr. Kupersmith received to finance the development.
“This is to provide you notice that People’s United Bank (“PUB”) is inviting the submission of offers to purchase its two (2) loans made to Farlap Development Corporation with total principal outstanding of approximately $4,929,846.34. The loans will be sold together by sealed bid, for an all-cash price. PUB will not provide financing for this transaction.”
The bank letter set a date of June 23, 2014 to open the bids.
According to real estate professionals familiar with this kind of proceeding, a bidder who buys the loans would own the bank’s right, title, and interest, and assume the bank’s role in proceeding with legal action against the debtor. That would give the bank a quicker exit from the legal proceedings. Whatever happens over the next few months, the level of interest in the property indicates that the property could be sold soon, Mr. Manning told The Times.
“Someone will finish the foreclosure,” he said. “I don’t know if that will be weeks or months.”
Mr. Manning said that before the auctions were cancelled, there was substantial interest from potential bidders, and he said he believes there has been interest in the bank’s offer to sell the loans. A spokesman for People’s United Banks would say only that the case is still working its way through the bankruptcy court.
According to tax records, Farlap Development Corporation owes the town of Oak Bluffs $269,695 in back taxes.
Four lots in the development were sold to private buyers and are not listed in documents related to the bank sale.
According to land records, Robert J. Natter of Ponte Vedra, Florida, purchased lot 22 in 2006 for $328,830. Frederic Mascolo of Edgartown, who owns the Jane Brown Associates real estate firm and Trader Fred stores, purchased lot 5 for $198,850 in 2007. James Ward of Winchester and Nancy Kennison of Stowe, trustees of the Woodlands Nominee Trust, purchased lot 6 in 2012 for $184,591.
A fourth lot, according to land records, was purchased in 2008 by Mr. Kupersmith and Keith M. Crocco, as trustees of JKE Realty Trust, for $233,770.
Land Bank held the key
In March, 2005, capping years of fierce controversy over his various development proposals, that included the Martha’s Vineyard Commission’s rejection of three successive applications and numerous lawsuits filed against the commission, Mr. Kupersmith sold 190 acres of the southern woodlands of Oak Bluffs to the Martha’s Vineyard Land Bank for $18.6 million.
It was the largest purchase to that date for the public land-buying agency, in both price and acreage.
The luxury housing development was intended to bridge the financial gap between what the Land Bank was willing to pay — that is, approximately $100,000 per acre — and Mr. Kupersmith’s asking price of $26 million.
The agreement included a provision under which the Land Bank would swap a 24-acre rectangular town-owned lot, known as the “donut hole” because it was landlocked, for “more convenient acreage located elsewhere in the Southern Woodlands, contingent on town meeting approval.”
The land swap was intended to provide the town with ownership of a parcel next to the Martha’s Vineyard Arena, with frontage on Edgartown-Vineyard Haven Road. Combined with abutting land the town already owns, the swap would create a valuable parcel for the town of Oak Bluffs. And the Land Bank would still own more than 100 contiguous acres of undeveloped conservation land.
Despite a 2004 written agreement, the land swap never happened. The town ran into problems clearing title to the land. Citing cost concerns, town officials have not moved aggressively to pursue a clear title, a process that can sometimes require substantial legal work.
The potential sale of the Kupersmith development does not involve any parcels in the land swap agreement.
“Technically it shouldn’t affect it at all, because it’s not related,” James Lengyel, executive director of the Land Bank, said Monday. “I don’t know if it might spur town officials to complete the swap.”
Golf war history
For years, Oak Bluffs was one of dozens of landowners of private landlocked parcels, many with unclear titles. The key to unlocking the ownership maze was the 88-acre Webb’s Camping Area, part of approximately 400 acres of land now referred to as the Southern Woodlands.
The camping area had been for sale for years. An offer by the Martha’s Vineyard Land Bank was refused, and in 1998 a golf course development company announced that it had an option to purchase the property. The company went to work clearing titles and acquiring more parcels.
When their efforts stalled, Mr. Kupersmith, a wealthy golf enthusiast and pharmacy entrepreneur from Greenwich, Conn., took over. Mr. Kupersmith approached the town and MVC officials with a plan to develop an 18-hole golf course and offer a benefit package he thought would be eagerly embraced. At one point the development included public walking trails, payments in lieu of taxes, an offer to lease a portion of the former Webb’s Camping Area to the town at no cost, and a permanent conservation restriction over the entire property.
At the same time, two groups of rival developers were engaged in their own efforts to build golf clubs. The backers of The Meeting House Golf Club adjacent to Edgartown Pond ultimately gave up following MVC rejection of the plan and joined with backers of the Vineyard Golf Club, built on the site of a failed 148-house subdivision off Edgartown-West Tisbury Road.