BOSTON-After mulling several options, including an auction, the lender on a stalled luxury condominium project near the city's waterfront has decided to finish the job on its own account, GlobeSt.com has learned. The 44-unit Broadluxe at 99-105 Broad St. was foreclosed on in April by TD Banknorth after the venture deteriorated into legal battles and cessation of construction. Claiming subcontractors and his firm are owed $5 million, general contractor Peter Martini says Winchester-based A.J. Martini was shut out of the project and is pursuing legal recourse after.

"It was very surprising to us," Martini says of learning that TD Banknorth has hired Union Construction Co. of Boston and is gearing up to move forward. A.J. Martini offered to finish the assignment amicably, says the company president, perhaps deferring final payments until Broadluxe sales were consummated. The $5-million tab was amassed late last year after his firm was given assurances the project would be funded, says Martini, estimating that the lender/owner is more than two months in arrears. Martini says TD's only communication for settling past bills was telling his firm to "get it from the developer," even after that group, Franklin Realty Advisors, ran out of money, according to previous published reports.

TD Banknorth spokeswoman Jennifer Carlson told GlobeSt.com that the person responsible for Broadluxe was unavailable, and declined comment on the issues related to Martini, citing the prospect of a court case. A regional institution based in Portland, ME and with a Canadian parent, TD Banknorth paid $17.5 million in April to regain control of the Broadluxe, then hired Tranzon Auction Properties, also of Portland, to secure a buyer. A source says TD Banknorth finally opted to pursue Broadluxe internally because "it was taking too long" to sort out the legal entanglements. The source also maintains that the concept is rational given the work is about 85% done. "Its not going to be a major renovation for them," says the source, who requested anonymity.

Broadluxe was expected to fetch $300,000 to $2 million per unit, having been conceived in the midst of a luxury residential building boom in downtown Boston. Across the street from the Broadluxe, a site at 80 Broad St. also produced luxury condos, with those anticipating up to $1.7 million per unit. That 96-unit project, known as Folio Boston, encountered construction woes and struggled when the housing market began to slump in early 2006. Folio's owners held an auction last October to move 34 units. The process reaped more than $24 million in a few hours after garnering much local publicity due to the unusual auction action.

Sources could not say where TD Banknorth is in the development process, but a sign had been affixed to the site as of Wednesday announcing a December completion date. Banking officials did not respond to inquiries by press deadline, while a call to Tranzon principal Thomas Saturley was also not returned. One former commercial banker now in an ancillary field offers that banks undertaking construction is "quite unusual" today, but speculates the strategy would have come only after careful analysis. Nonetheless, adds the Boston-based official, "in my experience, you recognize the loss and move on" rather than keeping the blemish on the books.