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Condo development in Portsmouth gets back on track after new owner lifts age restriction
October 3, 2010

Condo development in Portsmouth gets back on track after new owner lifts age restriction

The Providence Journal / Bob Thayer

PORTSMOUTH -- Four years ago, things looked bleak for the owners of nine townhouse condominiums sold at Freedom Bay as the developers got into financial trouble, putting plans to finish the senior-living community on indefinite hold.

Instead of attractive landscaping and neat roads winding on hills overlooking the water, residents in the age-restricted (55-plus) development had views of unfinished units and overgrown weeds on abandoned lots. After a couple of winters, roads that had been only partially finished began to crumble.

But Landings Real Estate Group, a Newport development company, purchased the site earlier this year for $6.3 million from HSH Nordbank AG. Landings has resumed work on the project, renamed Prescott Point.

There is one big change. Prescott Point is not an age-restricted development, according to Landings founder and president Christopher C. Bicho.

Before proceeding with the purchase, Bicho said, Landings sought and obtained the permission of all nine owners to lift the age restriction. Bicho said the owners' unanimous consent was legally required to make the change.

The original plans for the 106-acre parcel off West Main Road, near the Middletown border, had included 149 condominiums, 44 independent-living apartments, a 54-unit assisted-living center, a fitness facility, a clubhouse with dining areas and shops, and on-site lodging for guests.

The condos were to sell for $540,000 to $735,000.

Construction had started in 2005, but by March, 2006, unpaid contractors had walked off the job. Later that year, Freedom Bay Cottages LLC and Adult Assisted Care Associates LLC, were in receivership, a form of bankruptcy in which a court appoints a trustee to either liquidate a company or sell its assets to pay the debt.

In July, 2007, Newport Superior Court Judge Melanie Wilk Thunberg approved the $24.6-million sale of the bankrupt Freedom Bay project to HSH Nordbank AG, its largest creditor.

Bicho said Landings bid on the development unsuccessfully when it was in receivership in 2007, but he was still interested when the bank put Freedom Bay on the market in December, 2009.

But Bicho said he didn't want to buy the property "unless we could get the age restriction lifted."

"The over-55 market has been decimated" by the housing market downturn, he said.

Bicho said be believed that is was necessary to have a bigger pool of potential buyers to make the project successful.

Landings is now finishing work on 17 units on the section of the property closest to West Main Road.

Portsmouth town planner Bob Gilstein said the original approvals for the project remain in effect, but Landings has indicated they will be seeking changes to the plan in the future.

Ted Hayes is a homeowner at Prescott Point, and he is also one of the former developers that lost the property to Nordbank. Although all the buyers "signed up here with the expectation of it being a 55-plus community," Hayes said, the owners came to the conclusion that no reasonable developer would proceed with the project in the current economic climate unless the age restriction was removed.

Hayes said that of all the developers who made proposals to buy Freedom Bay, Landings was the one the owners believed was the best match for the development.

"They have followed through with everything they told us was their intention," Hayes said. "They've beautified the place." At the same time, Bicho has not made unrealistic promises to the owners, he said.

Bicho said it may be four or five years before Prescott Point is completed.

Prices for the 17 units that will be completed in this first phase will start at $349,000, which Bicho said is "a sweet spot" for the Portsmouth market.

Prices for the units built closest to the water may be higher, but Bicho said the section of the property with "expansive water views" will be one of the last to be developed.

"We believe there's a lot of value there," he said.

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