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New London - A New Haven businessman has backed out of his bid to buy the The Lighthouse Inn, setting up Superior Court Judge James J. Devine's decision Monday to turn over ownership of the foreclosed property to the historic landmark's mortgage holder.
The sale of the Guthrie Place property to Business Loan Center LLC for $1,247,365.73 - the amount the previous owner, McGrath Hotels LLC, owed on the mortgage - came as businessman Anthony D. Acri III withdrew his $1.25 million bid made during an April auction.
Devine ordered the return of Acri's $100,000 deposit after at least two break-ins at the inn last spring led to significant damage and the loss of personal property.
"Hopefully, we'll get this property back on the market again," Devine said, adding that he hopes someone returns the inn "back to its former glory."
Acri, reached after the 10-minute hearing at New London Superior Court, didn't discount the possibility that he might come back with another bid.
"It may not be over," he said. "We'll just have to wait and see."
Acri had hoped that his two daughters, Lauren and Lyndsay, would have significant roles at the inn, aided by a general manager who would run the day-to-day operations.
"There's been a lot of tears," he said. "It's very upsetting."
The Lighthouse Inn has been closed since the winter of 2009. Its restaurant and bar were closed in August 2008 because of health-code violations. Appraisals of the property have shown its value has declined dramatically in the time since the Lighthouse Inn closed because of a softer real estate market and a lack of maintenance.
Continuing delays of the property sale - because of the break-ins, a forced bankruptcy filing that delayed the inn's first auction and former operator Maureen Clark's claim to personal items left on site - have led to more deterioration at the landmark.
Several real-estate observers have said the property, which had been valued at nearly $3 million shortly after its closure, may not be worth the $1.25 million Acri bid for it. The most recent appraisal put the property's value at $1 million, according to a brief filed earlier this year by Business Loan Center attorney Michael Sheehan of New London.
Acri had been the only other bidder besides the mortgage holder during an auction last spring. With Acri deciding to withdraw, Devine accepted the Business Loan Center's second-highest bid as the winning sales price.
Sheehan would not comment after the court proceeding Monday about what the Business Loan Center would do with the property. But both Devine and New London attorney Narcy Z. Dubicki, committee of sale for the Lighthouse Inn, indicated the company most likely would put the property back up for sale.
"Now they've got to peddle it," Dubicki said.
The sale of Lighthouse Inn to the mortgage company gives the company firm title to the property without obligating it to pay any other claimants, Dubicki said. But it also obliges Business Loan Center to pay for any encumbrances, he said, which include at least $96,000 owed to the state and more than $120,000 to the city.
As part of a deal previously worked out in arbitration, Wells Fargo Leasing was given the right to retrieve chairs on the property, and former inn operator Clark was allowed to reclaim personal property left onsite.