Unclear picture at Polaroid site

The auction was held by Helaba, the German bank that holds the first mortgage on the property. Helaba ended up buying the site with a bid of $42.5 million. The only other bidder was the real estate investment firm The Bulfinch Cos. of Needham, which offered $26 million.

The 119-acre property on Route 128 was owned by Watch City Development LLC, a joint venture of Polaroid and The Related Cos. of New York, which wants to build a 1.7 million-square-foot office and retail complex at the site. Polaroid declared bankruptcy last year, and now that Helaba owns the site, it’s unclear whether Watch City will be able to work out a deal to proceed with the development.

Officials from Polaroid did not respond to requests for comment. A spokesman for Related declined to comment, as did Barry Braunstein, a lawyer representing Helaba.

Mayor Jeannette McCarthy of Waltham expressed relief that the property wasn’t scooped up by another developer.

“I was pleased that the bank is the one that got it,’’ she said. “It’s not somebody completely new.’’

McCarthy said the site is “absolutely’’ important to Waltham because of its size.

“It will have a major impact on the city no matter what goes in there,’’ she said.

Whoever develops the land, McCarthy said, should honor four commitments agreed to by Watch City as part of its proposal: to make $45 million in traffic improvements, to preserve 20 acres of forest, to convert a rail bed into a recreation trail, and to set aside part of the site for a potential direct connection to Route 128. She thinks the site can be developed as planned despite the weak real estate market.

David Begelfer, chief executive of the commercial real estate trade association NAIOP Massachusetts, believes the land could support a major development.

“Someone may choose to scale it down and just get something started, but I think it does have the potential to be as large as originally planned,’’ Begelfer said. “The market will be coming back. When it does, properties like this will be the first to be developed.’’

Begelfer said Helaba may let the property remain vacant for a couple of years until it can fetch a higher price.

“There was a hope that someone could steal this property’’ with a low auction bid, Begelfer said. “Clearly, the bank was not going to allow the property to be stolen.’’

Inge Uhlir, who lives about a mile from the site, said neighbors are happy with the development plan and would fight major changes. “If that’s ditched, there’s going to be a storm of opposition,’’ Uhlir said.