A Roxbury health center that was shuttered two years ago may be sold to a charter school for less than the debt it still owes to an array of creditors, government agencies, and former employees, court documents show.
A receiver overseeing the closure of the Roxbury Comprehensive Community Health Center is seeking approval in Suffolk Superior Court to sell all the center’s property to Bridge Boston Charter School. The school, now in Dorchester, would pay $3.4 million for the buildings and parcels at 435 Warren St. and adjacent parcels on Townsend Street.
The receiver, Joseph D. Feaster, was appointed at the request of former attorney general Martha Coakley to handle the shutdown of the center, the turnover of medical records, and the disposition of assets. The clinic known as “RoxComp” had provided medical services in the neighborhood for 45 years but shut down in March 2013. Its outstanding debts and claims from potential creditors now total more than $4.8 million, Feaster’s motion states.
The property sale will determine what’s left for creditors to divide. Former employees who lost their jobs at the center are considered priority creditors. However, RoxComp still owes $661,654 in mortgages, which must be paid before other obligations.
Both the US Attorney’s Office and the state Attorney General’s Office are investigating what led to the center’s demise.
The receivership itself has been a costly endeavor: The receiver and his own counsel must be paid for their service before proceeds can be distributed.
The charter school’s proposal represented “the best and highest suitable offer,” Feaster said in his motion and exceeds by $515,000 the appraisal recently given by an independent certified appraiser.
If a judge approves his motion later this month, Feaster is proposing to give creditors and other interested parties another 20 days to object.
One of RoxComp’s largest creditors is the state Department of Unemployment Assistance, owed $761,400 for employees who lost jobs through no fault of their own and sought unemployment benefits.
The center stopped paying unemployment benefits in 2010 when longtime chairman Ronald L. Walker II was still on its board, the Globe previously reported. Walker, who left RoxComp’s board in September 2011, was named state labor secretary by Governor Charlie Baker.
Former RoxComp employees, who never got paid for their last few weeks of work, are owed another $545,891 in wages and benefits, according to the motion. But 18 former employees are trying to intervene in the receivership case and hoping to recover much more. Under the Massachusetts Wage Act, they are owed three times their lost wages and benefits, including vacation time — a tally one lawyer put at $1.5 million.
A Bridge Boston official did not respond to a request for comment. The school is now doing due diligence and closing is still contingent upon winning city approval for changes in use of the property.
The sale process, which has taken longer than expected, began in July 2013, when Feaster awarded an exclusive listing to Taylor Smith Group LLC, a real estate development consulting firm led in part by Richard Taylor, another Baker appointee. Taylor resigned from Baker’s transition team after the Globe questioned him about unpaid taxes and business judgments of more than $1 million.
Taylor Smith Group will earn a 4 percent commission for the sale but agreed to contribute 15 percent of that fee to a nonprofit chosen by the receiver, according to Feaster’s motion.
While Taylor Smith Group marketed the property to other institutions, it was hamstrung by several factors, Feaster’s motion claims. Reuse as a health center was made less likely by the fact that the nearby Whittier Street Health Center, took over the federal grant on which RoxComp operated, as well as many patients. Several interested buyers found that conversion to another use would be too expensive, while others wanted only one of the three parcels.
Two slightly higher potential buyers showed no ability to finance the sale, leaving the charter school’s offer as the best on the table, according to Feaster’s motion.
Neither Feaster, nor attorneys for the former employees would comment on the case.