Without a buyer, Racquet Club of Concord could go up for auction this month
By the end of this month, the Racquet Club of Concord will have a new owner.
Who that owner will be and what will happen next to the longtime health club, however, is uncertain.
The Nelson family built the club on Garvins Falls Road in 1972. After more than 40 years of business, they are negotiating a sale with an unnamed buyer. But if they can’t close in the next three weeks, the Racquet Club will be foreclosed on and put up for auction.
And the high bidder at that July 30 auction could very well be Michael Benton, who bought the Racquet Club’s mortgage in December and who had an agreement to buy the property itself until the Nelsons walked away earlier this year.
“I’ve been left with all the headaches,” Benton said. “Could I end up as the owner of this property? Yes, I can. It’s a possibility. I have to basically passively sit back and wait to see who shows up.”
Last year, Benton had signed a purchase-and-sale agreement with the Nelsons to buy the Racquet Club from their company, Concord A.C. Tennis Division Inc. He wanted to remake the outdated health club in the image of his upper-scale Executive Health and Sports Club in Manchester. The 72,000-square-foot building would have eventually grown to more than 103,000 square feet; the plans also included 12,000 square feet of on-site medical offices.
Then in December, he said, the Nelsons came to him asking for a favor. The bank was going to foreclose on the health club, he said, and owner Debbie Nelson asked him to buy the mortgage from Citizens Bank. Nelson did not respond to multiple requests for comment.
Benton said he didn’t want to see the Nelsons take a hit from the bank; he had also put a significant amount of money toward designs and permits for the renovation.
“I had thousands of dollars invested,” Benton said.
So he stepped into the bank’s shoes, and the Merrimack County Registry of Deeds confirms the mortgage was transferred to Benton Holdings LLC on Dec. 30. The Concord Planning Board approved his renovation plans in January, and then he asked Nelson for an extension on his purchase-and-sales agreement when it was set to expire May 15.
She said no.
“In my wildest dream, I didn’t believe she wouldn’t sign all the extensions. . . . I was shocked that she didn’t sign my extension,” he said. “I figured that she would realize that if I’m going to spend the type of money to buy the first mortgage, that I’m serious about buying the property.”
The Racquet Club was listed on the open market for $1.8 million May 17. The realtor is Art Bonin of A. R. Bonin Companies LLC.
“We do have a buyer who has it under contract, and we’re waiting now,” Bonin said. “He’s doing his diligence.”
A “Sale Pending” sticker has been slapped across the “For Sale” sign outside the Racquet Club. Bonin would not name the buyer but said the Nelsons hoped to close before the end of July. They have to, because Benton has scheduled a foreclosure auction for July 30.
“I would not have foreclosed had it not been for the city sending me a demand notice that they were going to take the property,” Benton said.
According to city records, the Racquet Club was behind nearly $200,000 on property taxes since 2011. Concord gives a property owner 30 days to pay an overdue tax bill before placing a lien on that property, and if those taxes are still unpaid two years and a day later, the city can take it.
So if the Racquet Club didn’t pay its outstanding debt from 2011 by the end of last month, the city would seize the property. The bill came to about $58,000. As the mortgage holder, Benton stepped in.
“If they take the property, then guess what happens to (my investment)?” Benton said. “It gets wiped out. I had no choice.”
Benton said he paid the 2011 tax bill to stop the seizure, which is confirmed by city records. Then he sent a foreclosure notice. The Nelsons hadn’t made any payments on the mortgage since he took it over, Benton said.
“Had I not been there, the bank would have already foreclosed,” Benton said.
If the Nelsons do close on a sale before July 30, the new Racquet Club owner would be responsible for the mortgage and the taxes Benton has paid. If the deal falls through in negotiations, Benton has hired Paul McInnis Inc. to host the auction. Public notice of the sale has already appeared in the Union Leader.
As the mortgage holder, Benton said he “will follow the letter of the law.”
“My responsibility as mortgage holder is to do all I can to find the highest bidder, that will bid as high as they want on this property,” he said.
Benton would not disclose the amount of the mortgage. City records value the roughly 10 acres owned by Concord A.C. Tennis Division at about $2.4 million. The foreclosure sale would also include all of the exercise equipment in the health club.
Should no reasonable buyer come forward, Benton could be the high bidder at his own auction.
“Trust me, I am very careful here because I do not want to be accused of trying to spoil the pot here,” Benton said. “If I end up with the property, it’s because nobody showed up willing to pay the mortgage and the taxes.”
The auction has been scheduled for July 30 at 11 a.m.
(Megan Doyle can be reached at 369-3321 or firstname.lastname@example.org or on Twitter @megan_e_doyle.)