Housing company faces receivership
Hedco RI Partners controls about 400 rental units in Woonsocket, Pawtucket
WOONSOCKET – Gordon F. B. Ondis of Lincoln spent decades building a massive collection of rental housing, doing business as two related companies, Hedco RI Partners and Develco RI Apartments.
When he died last summer at the age of 81, he controlled some 400 units of subsidized and market rate rental units in 62 parcels scattered throughout this city, Central Falls and Pawtucket.
Now a California bank has petitioned the two companies into receivership in Superior Court. American Colony Finance says Hedco and Develco are in default of their payments on mortgages of roughly $11 million that Ondis obtained in 2015, using the properties as collateral.
“An event of bankruptcy exists with respect to each borrower, in that the estate of Gordon Ondis has sought permission to seek receiverships for Hedco and Develco, and has represented… that Hedco and Develco are insolvent and lack current control over their respective assets and income,” papers filed in the case say.
During a recent series of hearings, Superior Court Judge Michael Silverstein appointed two well-known bankruptcy lawyers to take control of the companies, which were managed out of offices at 313 Pond St. and 50 Hedley Ave. in Central Falls.
Silverstein appointed Richard L. Gemma of the firm Wieck DeLuca & Gemma as the receiver in charge of the hard assets. Also, he appointed Richard J. Land of Chace Ruttenberg & Freedman as a “special master” to oversee Hedco Ltd, a separate but related company that was in charge of collecting rents and other day-to-day activities involved in managing and maintaining the properties.
The next hearing in the case has been scheduled for Feb. 3, when Silverstein will take up a motion to appoint the Providence real estate appraisal firm Peter M. Scotti & Associates to render an opinion on the market value of the Develco/Hedco portfolio.
In an interview, Gemma said that ultimately the goal is to sell off the properties for fair market value to one or more buyers. Gemma said the properties are generally in good condition and most of them are occupied.
Some of the tenants pay rents that are subsidized by some type of government voucher program while others pay market-rate rents without subsidies. It’s unknown whether tenants have been informed of the receivership petition, but the court action has left their rent obligations and living circumstances unchanged to date.
Gemma downplayed the notion that Hedco and Develco are insolvent, but he said a bigger problem was that Ondis died without a clear plan of succession for the control of his companies, a circumstance that also provided the lender authority to petition for receivership.
Other sources involved in the proceedings, however, say Ondis’ estate commissioned an audit of the company after his death that concluded the companies were insolvent. The audit has been placed under court seal for the time being because it contains privileged information that could affect the marketing of the companies.
Court papers indicate that Hedco had an outststanding loan of roughly $7.3 million and Develco, about $4.4 million – both with Colony American Finance of Santa Monica. Sources involved in the litigation say the company’s cash assets consist primarily of a checking account containing about $1.7 million that Ondis held jointly with Rosangeli Cruz, a management-level employee of Hedco that handled many of the company’s administrative chores.
That account is now subject to claim by the bank.
The initial petition for receivership was filed on the very date the monthly interest payments on the CAF loans were due – Dec. 9. The bank told the court that it wasn’t expecting to get paid by either borrower.
“The petitioner desires to exercise the rights granted to it under the Hedco and Develco mortgages…to have a receiver appointed to protect, preserve, maintain and manage the property that secures the debt owed to CAF,” the court documents say, “including both the real property but also all accounts, reserves, rents, income and all other property that serves as collateral for the Hedco and Develco loans.”
A Lincoln native, Ondis died last Aug. 8, according to his obituary on Legacy.com. The obit portrays Ondis as something of a renaissance man, describing him as an actor, a singer, a member of the State Ballet of Rhode Island, a decorated veteran of the Korean Conflict, an athlete, a personal chef to his family and “an unforgettable raconteur.”
Though he is described as “a real estate developer,” the obituary is silent with regard to Ondis’ ties to either Hedco or Develco. According to papers filed in court, he controlled both companies.