Published: June 24, 2007Dennis Stackhouse
Stackhouse
Developer's record marred by missteps
The developer who promised a biotech park in Liberty City has a record of foreclosures, defaulted loans and a bankruptcy.

Dennis Stackhouse stood before the Miami-Dade County Commission, hoisting a map of Kendall Square, the Cambridge, Mass., neighborhood that is widely considered a Silicon Valley of the biotech industry.

''Kendall Square, not that many years ago, resembled Liberty City,'' Stackhouse told commissioners during the January meeting.

The 64-year-old developer was in his element -- pitching big ideas to powerful people.

Former business associates, employees and government officials who have worked with Stackhouse say the native New Englander is a gifted salesman who melts skepticism with moxie.

When approaching local leaders about the biotech project four years ago, he touted 20 years of successful developments in Massachusetts, Connecticut and even China.

Now, he has promised to transform Liberty City by creating a world-renowned biotech cluster on par with Cambridge, which is home to Harvard University and the Massachusetts Institute of Technology.

But court cases and land records from Boston show that Stackhouse's companies had a long history of financial problems.

One company had a 1991 bankruptcy that lasted three years and involved more than $20 million in defaulted loans and debts.

The roots of those troubles began in 1986 with a deal billed as a rare foreign construction project in China, a 36-story office and condo building in Shanghai called Lotus Mansion.

In one biography, Stackhouse says he ''formed a joint venture with the City of Shanghai'' to develop the $90 million building.

But the lead developer in the deal, Asian Development Corp., later sued Stackhouse and a business partner after they failed to repay a $500,000 loan for a different project.

Although Stackhouse lost the case in October 1989, it would be five more years before he would satisfy the judgment -- paying a fraction of the total debt in the course of a bankruptcy.

BOSTON BUILDING

The focal point of that bankruptcy case was a building in Boston's Roxbury neighborhood called 1010 Massachusetts Avenue, a sprawling six-story brick structure.

Stackhouse's company purchased it in 1983 with a plan to rehab the building, but six years and 11 change orders later, the project had become a financial disaster.

The company defaulted on a $15 million construction loan, failed to pay his contractor more than $1 million, fell behind on $1 million more in loans secured with the building -- including the $500,000 Asian Oceanic Development loan -- and owed the city of Boston more than $100,000 in property taxes.

Then, in 1991, Stackhouse's primary lender began foreclosure proceedings against him.

It wasn't his first foreclosure. A year earlier, another of his companies lost an office building on Summer Street in Boston.

This time, however, Stackhouse fought to keep the building at 1010 Massachusetts Ave., blaming his troubles on a banking crisis that was gripping the country at the time.

The lender dismissed his claim. ''We have been endlessly patient with Mr. Stackhouse,'' First Mutual President Gerald Mulligan told the Boston Business Journal in 1990. ``It's amazing that he can pay his [public relations] flacks, but he can't pay his bills.''

A week before the bank auctioned the building, however, Stackhouse's company filed for Chapter 11 bankruptcy, a move that allowed him to freeze the sale, restructure his debt and come up with a payment plan.

LIQUIDATION STOPPED

But Stackhouse never came up with a plan.

By June 1994, the U.S. trustee overseeing the case moved to liquidate the only asset Stackhouse's company had -- the building at 1010 Massachusetts Ave.

A month later, the developer asked the judge to dismiss the case, claiming he had found a buyer for the building and had negotiated a plan to pay his debts, which had ballooned to more than $20 million.

There was one catch, however. Although he said the building was worth $23 million when he filed for bankruptcy in 1991, he now said its value was just $6 million -- meaning that of the more than $20 million he owed, he would pay little more than 30 cents on the dollar.

The U.S. trustee objected, raising questions about the buyers and why the case was being disposed of so quickly. But the judge approved the sale.

The company that eventually bought the building was called Newmarket Realty Trust -- a firm owned by Stackhouse's wife and two others, according to court records.

Two years after the sale of the building, Newmarket deeded the office building to a Stackhouse company for $1. Four days after that, Stackhouse mortgaged the property for $10.4 million. Then, in 2000, he sold it for $20 million and passed the $10.4 million mortgage on to the buyer.

With proceeds from the sale, he set his sights on developing blighted areas in South Florida.