Clock Shop Negotiations Tick Forward

by Mona Mahadevan The New Haven independent

Thomas Breen photo The ex-clock factory at 133 Hamilton.

A group of creditors took a brief step back from their push to seize control of the deteriorating Hamilton Street clock factory — clearing the way for the building’s owner and one creditor to negotiate a private financing agreement aimed at stabilizing the site.

That’s the latest with the ongoing involuntary Chapter 7 bankruptcy case filed by those same creditors in federal bankruptcy court against Taom Heritage New Haven LLC, a company controlled by Scott Reed of the Oregon-based Reed Community Partners. 

Taom Heritage has owned the ex-clock factory at 133 Hamilton St. since 2018, but has failed to follow through on plans to redevelop the industrial property into 130 apartments, letting it fall instead into tax foreclosure and sustained decay.

On Tuesday, the creditors behind the involuntary bankruptcy effort withdrew their motion for an interim trustee — even as they maintained their broader bankruptcy petition. 

If the court approves the bankruptcy petition, a court-appointed trustee would be able to complete a 2024 purchase-and-sale agreement with the Housing Authority of New Haven without the owner’s approval. The $4.5 million transaction for the long-vacant building has been repeatedly delayed by Taom Heritage’s failure to complete environmental remediation and secure the site.

While the involuntary Chapter 7 bankruptcy case is ongoing, during Tuesday’s proceedings, the creditors rescinded their petition to expedite the appointment of a trustee. 

That motion had been submitted on July 3 by attorney Jeff Hellman, on behalf of creditors C. William Kraus, Rescue 1 Pest and Terminate Control LLC, Decontamination Decommissioning and Environmental Services LLC, and TSJ Inc. In the request, Hellman argued the ex-factory’s rapid deterioration, given reports of squatters and multiple fires, demanded immediate intervention in the form of an interim trustee.

Judge Ann M. Nevins heard arguments about the petition last Friday, but she voiced concerns around insurance coverage, site safety, and funding availability. The parties requested a continuance to address those issues.

On Tuesday, they returned to 157 Church St., in person and over Zoom. Over 15 people were in attendance.

There, Hellman said the petitioning creditors were withdrawing their interim-trustee petition without prejudice. In return, the property’s first mortgage lender, Agnes Yagovane, would privately provide funding to Taom Heritage to secure the property. Because the court has still not decided whether Taom Heritage is bankrupt, the deal qualifies as a private transaction and does not require court approval. 

Yagovane’s daughter, Rosanne, whose father once owned 133 Hamilton St., said her mother was ​“heart-broken” after seeing pictures of the site’s deterioration. ​“What we see is devastation. People could get hurt,” she said. ​“It was a no-brainer [for my mom] to offer the funding.” 

The primary owner of Taom Heritage, Scott Reed, attended court on Tuesday via Zoom. For the first time in these bankruptcy proceedings, he showed up with legal counsel. 

His attorney, Gregory Arcaro, said he agreed to the deal ​“in principle” but needed more time to review its details. According to Hellman, Arcaro plans to contest the bankruptcy filing by a Friday deadline, which could extend the timeline for appointing a trustee. 

Also appearing for the first time in court was the Housing Authority of New Haven, represented by attorney Joseph Cherico. After Tuesday hearing, Cherico told the Independent that the agency remains very interested in purchasing the property. If the terms of the 2024 agreement, which include environmental remediation, cannot be met, he said the Housing Authority may consider striking a new deal.

According to documents shown to the Independent by Bill Kraus, a creditor who previously worked with Reed, the Housing Authority’s $4.5 million offer was the lowest of those submitted for the property. Kraus said Taom Heritage accepted the lower bid because of the agency’s commitment to the project, now underscored by its presence at Tuesday’s proceedings. 

“Everybody is in agreement, from both the unsecured and secured creditor side, that the building should be sold to the Housing Authority of New Haven,” Hellman said towards the end of Tuesday’s hearing. But disagreements remain, he continued, over how to meet the conditions of the sale and distribute the proceeds. 

The parties will be attempting mediation over the coming days.