GREAT BARRINGTON — An attorney for developers of the Powerhouse Square condominium and retail complex says his clients will pay more than $200,000 of owed back taxes within the month, and the developer says town error is to blame for the delinquency.
In a letter obtained by The Eagle, Alan Righi, attorney for Benchmark Development, wrote Wednesday to lawyers who represent some condo owners and buyers, saying he is advised that his client will clear up the outstanding taxes.
Meanwhile, one buyer has walked away from a sale in the 22-unit building on Bridge Street, according to Peter Puciloski, attorney for another buyer. Puciloski says his client was “too nervous,” given what appears to be the developer’s financial shortfalls.
Puciloski had drafted a contract last month, asking the town to hold his client and buyer harmless if the tax bills go unpaid and the town were to take the property. Town Manager Mark Pruhenski refused, saying the town has to treat all taxpayers equally.
In a statement to The Eagle, Michael Charles, principal of Benchmark, said the delinquency is the town’s fault. He said the town’s tax errors are the result of “personnel issues” in the tax collector and assessor’s office, along with incorrect tax classification given the combination of commercial and residential taxes that need separating.
“While individual prospective owners may have approached the town about various possible solutions, it has been ownership’s position that the accurate bifurcation of the commercial and residential portions of Powerhouse Square is key to resolving any discrepancy relative to the tax issue,” Charles wrote. He also said “the town has indicated that such proper allocation will occur by the end of June.”
The town recently hired a new assessor and tax collector.
In an email, Pruhenski said he is unaware of a plan to pay the taxes, and that none of what Charles wrote in a larger statement about the bifurcation “should have prevented him from paying the back taxes owed.”
“This entire matter can be resolved by simply paying the outstanding tax balance to the town, hence our reluctance to negotiate any agreement,” Pruhenski said.
The tax delinquency created a tangle as condo sales at Powerhouse increased during the coronavirus pandemic, but it also potentially makes unit owners liable, since the town is refusing to hold them harmless for unpaid taxes.
As of last week, the delinquent taxes that, in part, date to November 2019 totaled about $214,000, down from more than $232,000 last month, according to Tax Collector and Assessor Alicia Dulin.
The Powerhouse condos were ready for occupancy in March 2020. Most of the units are sold, according to Charles, and he said this has brought 49 new families to the downtown. The smaller retail/office spaces remain vacant.
Benchmark reneged on an agreement regarding improvements to abutting town property, Pruhenski said. Charles said The Eagle, in earlier reporting, “misrepresented” these claims, and said the company plans to incorporate this work into construction on a second, 27-unit complex on the south side of the site, which likely will begin at the end of this year or beginning of next.
The Berkshire Food Co-op, which moved in as anchor tenant in 2019, is suing Benchmark in Berkshire Superior Court for a slew of problems that include lengthy delays, construction defects that have led to leaks, and mechanical and parking lot problems. Charles said he is confident that the issues will be resolved, and said “disagreements between tenants and landlords are not uncommon in commercial real estate.”
At its inception, the complex was hailed for its potential to generate an estimated $400,000 in revenue to the town.