A developer bought these former Fall River schools for $15K. He just sold them for $850K.

FALL RIVER — When David Hebert convinced the City Council Committee on Real Estate to sell him the former Silvia and Lincoln schools he did it with the promise of redevelopment that included a boutique hotel, restaurant and a high-end apartment building.

Hebert, owner of Hanover Properties, paid $5,000 and $10,000 respectively for the two schools. In that presentation to the real estate committee in 2016, he also promised that he would keep preservation of the old historic schools in mind, bringing along architects with expertise in historical preservation to discuss the plans.

Neither the Silvia School on Hartwell Street nor the Lincoln School on Pine Street ever saw any sort of transformation.

In September 2020 at the Silvia School, city Inspectional Services Director Glenn Hathaway found numerous health and safety violations at the blighted three-building one-acre property and ordered it boarded up to keep squatters out of the complex.

Somerset developer buying former Fall River schools

Now Hebert is selling the two former schools to Somerset-based developer Hyde Development for $850,000.

On Tuesday, June 13, a day before Hebert was set to travel to a Boston federal courthouse to learn his sentence for the extortion conviction connected to former mayor Jasiel Correia II, the Fall River businessman signed an agreement that would steer $357,000 of the sale proceeds to the city; 42 percent of the sale price.

At the time of Hebert's purchase, Correia had just started his first term as mayor and Hebert was his friend, political supporter and eventual landlord.

Mayor Paul Coogan and his legal team have been looking into the deal essentially since he took office in January 2020.

“Since I wasn’t a party to the agreement when it was first signed, I was just perplexed why nothing was happening,” said Coogan. “That bothered me. He got a good deal on city property, he agreed to renovate the properties into something the city could be proud of.”

Corporation Counsel Allan Rumsey and city real estate attorney Matthew Thomas worked on the deal after they found the original purchase and sales agreements for Silvia and Lincoln.

Rumsey said when he started in the corporation counsel office, members of the Preservation Society began inquiring about the status of the Silvia and Lincoln schools.

Included in the agreements, said Rumsey, were deadlines and reverter clauses, meaning if Hebert didn’t' fulfill the terms of the purchase and sales agreement, the properties would go back to the city.

According to the purchase and sales agreements, Hebert was to start the renovation work 60 days after the closing date and to continuously work on the projects for the ensuing 36 months.

In January 2020, Rumsey sent a letter to Hebert notifying him that he was in breach of the agreement and went to Land Court and filed a notice of claim and rights of reverter, which essentially prevented the sale of the two schools until a resolution of the issues was reached.

“It puts any prospective buyer on notice of the city’s claim and its reverter rights,” said Rumsey.

Last February, Hebert received a notice from the city it intended to move on the reverter issue, and negotiations ensued, leading to the deal being signed on Tuesday.

Hyde Development takes over project

In the forbearance agreement with Hyde Development, owner Kenneth Mollicone agreed to provide the city with details of their schedule for projects and the terms be placed on the deeds.

Rumsey said Hyde Development agreed to a $75,000 performance bond for the two redevelopment projects. “I think it's great news for the city. We received a fair price to extend the reverter deadlines,” said Rumsey. “And more importantly, we have a purchaser to develop the properties.”

More Fall River apartments coming

A day after Hebert signed the agreement with the city on the two schools, he was sentenced in federal court on the extortion charges for his part in Correia's shakedown of marijuana vendors looking to do business in the city. Hebert was sentenced to three years probation, $25,000 fine and an order he pay $61,000 in forfeiture. A day after the sentencing, the Zoning Board of Review voted to renew an expired variance granted to the Lincoln School property in May 2018.

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Mollicone's redevelopment of the former Lincoln School after the property is transferred will reflect Hebert's original plan to create 24 units of market rate housing and one commercial space.

The variance allows for 28 parking spaces, below what is legally required under city zoning laws.

Ken Fiola, vice president of Bristol County Economic Development Consultants, spoke in favor of the renewed variance and is working with Mollicone on the project.

"I think the bottom line here is you are going to have a building that will remain in its historical context and repositioned and repurposed for market rate housing use," said Fiola.

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The new developer will likely invest $5 million to $7 million in the project, said Fiola, and construction could begin this year.

Alexander Silva, a member of the Preservation Society of Fall River, told the zoning board that while the society supported the variance, they urged the city to remain vigilant in the progress of the project, noting Hebert's failure to abide by the terms of the purchase and sales agreement with the city.

Silva noted that Hebert had put the Lincoln School on the market for $795,000 in September 2020, which would have amounted to a nearly 8,000 percent profit margin.

Fiola said that while the state and federal preservation tax credits will be transferred with the Lincoln School, the new owner will have to ask for a new tax abatement agreement from the city’s Tax Increment Financing Board.

In February 2019, Hebert was granted a 10-year agreement from the TIF board that included the property would have been exempt 80 percent in the first five years, then down to 20 percent exemption in the last five years with an estimated savings of $175,916.

Jo C. Goode may be reached at jgoode@heraldnews.com. Support local journalism and subscribe to The Herald News today!

This article originally appeared on The Herald News: Jasiel Correia co-conspirator David Hebert sells former Fall River schools