The City of New Bedford is suing the private owner of the Star Store for more than $500,000 in unpaid taxes through a process that could end with the city seizing ownership of the downtown property if its tax bill remains unpaid.
The Star Store, an historic building that fills nearly a full city block in downtown New Bedford, housed UMass Dartmouth’s College of Visual and Performing Arts for 22 years until the university abruptly ended its longstanding lease at the building in September 2023.
A recent investigation by Massachusetts’ Inspector General blamed the university, the state’s property management agency and the state senator who orchestrated the campus’ creation in the late 1990s for failing to plan for the building’s long-term stewardship.
The Star Store’s private owner, Paul Downey, collected more than $60 million in public funds for what amounted to a 22-year tenancy, and walked away with permanent ownership of a building that was initially meant to pass into state ownership for the nominal fee of $1 in 2021.
The campus’ closure shocked students, residents and politicians in New Bedford, including Mayor Jon Mitchell, who made a belated offer to take ownership of the building and lease it back to UMass Dartmouth. The university declined the offer.
Mayor Mitchell’s administration has since ended a longstanding special tax deal for the Star Store, hiking Downey’s annual property tax bill from $50,000 to more than $500,000 — an amount he has refused to pay so far.
Last week, the City of New Bedford filed a tax lien complaint in the Massachusetts Land Court against Downey’s holding company, Star Store Holdings LLC, to collect $525,028 in unpaid taxes and interest, a figure that could continue to rise substantially as time passes. Attorney David E. Congdon of the law firm Louison, Costello, Condon & Plaff, LLP, will represent the city.
New Bedford is now seeking a hearing before a recorder of the Land Court, who could compel Downey to negotiate a payment plan with the city.
If the bill remains unpaid following a court order, the Land Court could eventually grant New Bedford permission to foreclose on the property and seize ownership from Downey.
A spokesperson for Paul Downey, Liz Isherwood, said he declined to comment on the tax case.
Mitchell provided a prepared statement about his administration’s decision to pursue Downey in court.
“Given the size and prominent location of the Star Store, it is incumbent upon the city not to wait indefinitely for a new owner to materialize and pay the outstanding tax bill on the property,” Mitchell said. “It is our intention that by proceeding with this action, we might hasten the property’s redevelopment.”
