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Watertown Trust talked to a developer about Mercy Care

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Still facing the daunting process of gaining control of the mammoth Mercy Care complex, the Watertown Local Development Corp. has started marketing the soon-to-be-vacant nursing home on Stone Street.

Donald W. Rutherford, CEO of the economic development organization, recently had a preliminary discussion with a developer to entice interest in the property, which will become vacant next March when Samaritan Medical Center opens its 288-bed assisted-living and skilled-nursing facility off outer Washington Street.

Mr. Rutherford also has been working with the city Planning Department on putting together marketing materials that will be used to get developers interested in the site, possibly for multifamily housing.

On another front, he also said he has persuaded an unidentified contact at GE Capital, the building’s lienholder, to help him gain control of the complex.

“I had a lengthy conversation with him and GE Capital is willing to work with us and come up with an exit strategy,” he said.

The WLDC, also known as the Watertown Trust, and city officials said they believe GE Capital holds the key in acquiring the 420,000-square-foot complex. They said that going directly to GE Capital and persuading the mortgage holder to begin foreclosure proceedings against Mercy’s owner, MGNH Inc., could prove to be a successful strategy.

Earlier this month, Mr. Rutherford suggested GE Capital might be interested in unloading the property through foreclosure since it seems highly unlikely it will ever get its financial return. The giant lending firm then would be compensated for the foreclosure expenses and be provided “a minimal incentive” to complete the transaction.

The GE Capital representative also would provide critical information about the owners of the property, Mr. Rutherford said. City officials have said it’s been difficult to find out whom to deal with because the principal partner, Anthony Salerno, died in 2008 and the city does not know whether MGNH continues to be an entity.

In the past, city officials have talked about obtaining the complex through the cumbersome tax sale process, which could take three years. In October, Samaritan, which occupies part of the complex, paid the $211,159 in back property taxes on the nursing home, so it is now current.

City officials and business leaders are concerned about what will happen once Samaritan vacates the complex and it becomes dormant.

Meanwhile, Mr. Rutherford also plans to talk to Michael Cucchiara, a National Development Council staff member who has worked with GE Capital on projects in the past and could help move the process along. The NDC, the oldest national nonprofit community and economic development organization in the country, is a national investment house that has worked with the Trust and Neighbors of Watertown Inc. on the refurbished Franklin Building.

Mayor Jeffrey E. Graham said the city might have an easier time acquiring two nearby parking lots owned by MGNH. Saying “they have a lot of potential,” the two parking lots could be the site of in-fill housing or some other development. There also would have to be an effort to find public funding for the demolition of unusable sections of the Mercy complex and for asbestos removal, Mr. Rutherford said.

The mayor also credited Assemblywoman Addie J. Russell, D-Theresa, for holding a series of brainstorming sessions about what can be done with Mercy Care. The idea to contact GE Capital directly came up during a recent session.

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