Salem Stuck With Unsold Condo Building; Looming Foreclosure, Difficulty Dumping Units Forces Developer To Consider Conversion To Rentals

In Salem, Massachusetts, The Salem News reports:

• The first sign of trouble came in December at a lottery to select the owners of some of the new Palmer Cove Condominiums. There were 15 condos for sale, with three-bedrooms going for what appeared a bargain — $189,900. When this project was conceived, an overflow crowd of applicants was expected. Instead, there was just one.

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• A $2.2 million construction loan was due in June, and the Salem Harbor CDC, a nonprofit agency, has asked the city for permission to abandon the condo project and switch to rentals. That's the only way out of this financial mess, according to [executive director of the Salem Harbor Community Development Corp. Michael] Whelan.

For more, see Condos are on edge of foreclosure.

For 8-29-08 story update, see Rentals OK'd for ailing Point housing project.