WATERTOWN — The Watertown Local Development Corporation could end up owning the former Clueless bar on Arsenal Street if $18,808.12 isn’t paid to the city in back taxes by Monday.

The local development corporation, also known as the Watertown Trust, is a co-mortgage holder with local businessman Robert F. Vest Jr. on the property at 545 Arsenal St.

The deadline to pay the back taxes and a $9,030 workman’s compensation lien is 4:30 p.m. on Monday.

If, as expected, the back taxes are not paid, the city would then become owner of the tax sale certificate and the deed for the building and then, in turn, sell it to the Watertown Trust in a separate private sale, Mayor Jeffrey M. Smith recommends.

In what would be a complex deal, the city would be made whole for the back taxes by the Watertown Trust paying $18,802.12 for the building.

“A lot has to happen before that,” he said.

Most recently, the building housed Club No. 9, a swanky nightclub that opened in 2016 and closed about two years later.

Robert Dalton, who owns the Paddock Lounge, received a $40,000 loan for the purchase of the building in which previously housed Watertown’s first openly gay bar.

Now he’s ready to walk away from the building by allowing “a deed in lieu of foreclosure” procedure to move forward.

If Mr. Vest doesn’t pay the back taxes, the city also could sell the building through a public auction.

But Mayor Smith thinks the Watertown Trust would be in better shape to get back the $33,272 that is still owed on the loan by either marketing or redeveloping the building.

“Economic development, that’s what they do,” the mayor said.

As of Friday afternoon, the city was poised to take over the former Clueless building and 31 properties that total $381,359 in back taxes on them.

But the city isn’t expected to end up with all of them.

“A lot of people wait till the last minute to pay them,” Comptroller James E. Mils said.

Last year, the city took ownership of 11 properties once the back tax process was completed.

The comptroller’s office also is holding a public auction for tax sales certificates, the beginning of the city’s back taxes process.

The tax sale certificates for as many as 215 properties, totaling about $$375,624 in back taxes, could go up for public auction at 10 a.m. Thursday.

By the end of the work day on Wednesday, Mr. Mills expects that between 25 and 50 fewer properties will go to auction.

The city holds tax sales annually for properties that have gone one year in arrears with city, county or city school district property taxes. The city is made whole when bidders, usually investment firms, pay those delinquent taxes following tax sale auctions.

Delinquent owners have two years after a tax sale to redeem their properties before the owners of the tax sale certificates can request to take ownership of the properties.

Johnson Newspapers 7.1

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