PEABODY — Now what?
That’s the question being asked in the city since there were no bidders for a second time on the historic O’Shea mansion.
Mayor Edward Bettencourt Jr. has been trying to find a buyer willing to build commercial and residential space in the city-owned landmark on Washington Street.
But it appears the minimum bid of $750,000 was a deal killer.
“Over the last few years, the property has deteriorated substantially and any developer would have to spend more than $1 million to bring it back,” said Pat Todisco, owner of Todisco Properties, one of the interested buyers. “I don’t know what the right price is, but $750,000 is too high.”
The city’s interest in the building started four years ago when Empire Design & Development bought the property for $350,000. Owner Michael Corsetti planned to raze the 10,000-square-foot Colonial and its 3,000-square-foot carriage house and replace it with apartments and shops.
But the city seized the 124-year-old mansion by eminent domain in 2015 to prevent its demolition. They sought a buyer who would preserve the multi-story home and transform it into a centerpiece with office space, restaurants, and a police substation. But no one bid on the property.
The city paid Corsetti $425,000 for taking the property, $75,000 more than he paid for it. But the Gloucester developer filed suit in Essex Superior Court seeking $1.8 million in damages, alleging the city underpaid him. Last fall, the City Council approved a cash payment of $825,000. In total, the city is on the hook for $1.25 million, or more than three times what Corsetti paid for the property.
Bettencourt said the city is preparing its third Request For Proposals that should be ready soon.
Still, Todisco said the city’s plan to convert the mansion into a commercial property will not work. The best adaptive reuse is for apartments or condominiums, he said.
“The carriage house may have to be demolished because it’s in such bad shape,” he said. “The mansion is solid and is the best place for residences.”
Bettencourt said the minimum bid will likely be reduced, but he is still convinced commercial use of the property is best.
“Our first priority with imminent domain was to protect the building and its history, and we did that,” he said. “That corner of Washington and Main streets would benefit from commercial use. We are not opposed to residential, but we always imagined a bed and breakfast, a function space, or a restaurant there.”
For his part, Todisco said he would still would love to own it.
“I love history and this mansion has it all,” he said. “I’ve talked to the great, great grandchildren of the original owner and they too would love to see it preserved.”
City Councilor-at-Large Anne Manning-Martin said she thought the minimum price was too high.
“Our hope was a developer would come in and buy it at that price so we can recoup the money the city spent,” she said. “But that now seems unlikely.”
