Harp Casts Doubt On 9th Square Bailout Plea
| May 16, 2013 4:03 pm
Mayoral candidate Toni Harp questioned a developer’s argument that it needs a $10 million-plus bailout from the city to keep the Ninth Square project alive, while two of her opponents expressed support for spending some new money to preserve affordable housing there.
Harp and fellow Democratic mayoral candidates Henry Fernandez and Matthew Nemerson all said they’d like to know more details about ongoing financial negotiations, when asked how they would handle a new development dilemma that faces City Hall: How to respond to a request by a request by a private developer—a partnership of McCormack Baron Salazar and Related Companies—for a multimillion dollar bailout of its Ninth Square project.
Nemerson and Fernandez said New Haven needs to preserve a lively downtown neighborhood that has lots of low-income housing mixed in with market-rate apartments and stores and restaurants and galleries. Without the details, they say, they don’t know if they’d deal with the current developer or seek to work with a new one, but they said they’re ready to support in concept the idea of allocating more public money to keep the project viable.
“The developer doesn’t matter. What matters is that we preserve housing for working families in a neighborhood that has been stable for decades now. We can’t lose that,” Fernandez said.
Harp sharply questioned the idea that developer needs more government help, especially since it already benefits from what she described as generous federal Section 8 subsidies for low-income renters..
“I want to see what went wrong,” she said. We already paid them a lot of benefits. Why aren’t they making money? Their original projections are that they would.”
In the Ninth Square the city used public money 15 years ago to help the developer fix up historic but neglected three- and four-story brick buildings and construct some new brick ones throughout the district. The Ninth Square lies southeast of the Green and is bordered by Chapel, State, George, and Church Streets. The developer created 335 new apartments, with a mix of low-income and middle-class renters, plus 49,000 square feet of stores and restaurants and galleries. That was the start of a broader rebirth of downtown into a place where people live and hang out at night.
Fifteen years later, the developer has come back to ask its major lenders—the Connecticut Housing Finance Authority (CHFA), New Haven city government, and Yale—for help. The project is underwater, unable to generate enough money to pay off big debts and make needed repairs, the developer claimed in an April memo. The memorandum asks all the project’s lenders to refinance a total of $86 million under a new entity created by floating a new set of state tax credits for the project. It asks the city to forgive $9.9 million in unpaid interest and obtain another 15 years worth of tax breaks—allowing it to keep paying $750,000 a year in taxes rather than its full $1.218 million bill. Click here to read a previous article laying out the issue in depth.
If City Hall says yes to some form of the developer’s bailout request, it faces a hard sell in seeking approval from the Board of Aldermen in tough budget times. A full 82 percent of votes cast in a “TrueVote” readers poll in the Independent urged the city to say no to the request and “let the market find the solution.” And St. Louis-based McCormack Baron is one-third owned by the global investment firm Goldman Sachs, not exactly a popular recipient for public bailouts these days.
On the other hand, 57 percent of Ninth Square’s apartments are occupied by low-income renters—and the apartments blend in with a vibrant, attractive district that has sparked other development in nearby stretches of downtown. Policymakers worry about sacrificing that project by allowing the developers to fail. (Technically, a separate tax-credit partnership owns the Ninth Square properties; the developer is the controlling partner in that partnership.)
The Independent asked six Democratic candidates participating in a mayoral debate Monday night what they would do if they were in Mayor John DeStefano’s position right now and dealing with the developer’s request. Four said they hadn’t learned enough about the latest developments yet to offer an opinion. Harp, a state senator, who did not attend the debate, spoke in an interview between legislative meetings at the Capitol late Tuesday. Nemerson and Fernandez said they’ve done some investigating since the Independent first reported on the subject last Thursday.
“Having talked to people, my sense is when they [originally] did the deal, they were probably expecting they would not get this money repaid” when the tax breaks and loans expired in 2013, Nemerson said. “It was not a big shock” to receive the developer’s request.
Many cities in the 1980s and 1990s struck similar deals—developments that included social goods like subsidized affordable housing—with federal tax credits and government grants that were supposed to be paid off 15 or so years later. Policymakers often expected the developers to have to return at that point with new requests to refinance debt or extend tax breaks. That was considered the price of including affordable housing in urban developments. Also, the requirements for the inclusion of tax credits in some of those deals called for other government assistance to take the form of debt, not outright grants. Mayor DeStefano has suggested reexamining that approach for future developments in favor of “transparent” up-front grants rather than unrealistic debt.
Striking the original deal “was the right thing to do” because of the way “this project stabilized that whole neighborhood,” argued Nemerson, a former Chamber of Commerce president. “It changed the whole nature of that side of downtown.”
“Without having access to the books, I don’t know what happened” to the financing since then, Nemerson said. “McCormack Baron may lose the project.” But he said the city should find some way to keep the project alive.
Nemerson recalled that the original Ninth Square deal fell apart in the late 1980s. In the early ‘90s, “Yale, [then] Gov. [Lowell] Weicker, and the city were scrambling at the very last minute [to save it]. It is inevitable in those situations you create some financing instruments that have balloon payments in the future without any idea of the relative value of the property [to generate enough revenue to meet those payments]. You’re basically guessing. What you’re getting in return are hundreds of millions of dollars of improvements to the city. Those are risks you have to take. You’re making a public policy decision.”
Fernandez, a former city development administrator, struck a similar theme. He also suggested that the city might be able to negotiate a plan that keeps McCormack Baron/Related in the project under terms different from the original request.
“If a developer says the sky is falling, it doesn’t mean the sky is falling,” Fernandez remarked.
Whether or not the city reaches a deal with McCormack Baron/Related, it should find a way to keep the Ninth Square viable with affordable housing included, Fernandez said. Even if that means the government putting more money in.
The way these projects are funded, “after 20 or 30 years always end up in this situation, where they need to be refinanced,” Fernandez argued. “I’m completely comfortable with refinancing low-income housing developments that are this successful.” He ruled out the option in the TrueVote poll, “let the market find the solution.” That would mean abandoning the low-income renters, Fernandez noted. “You’re talking about hundreds of families losing their homes. The developer doesn’t get hurt.”
Harp, who as a city alderwoman participated in the original Ninth Square debates and votes of approval, offered a different analysis of the project’s funding.
The high percentage of subsidized Section 8 housing—accounting for an estimated 57 percent of the project—actually should boost the developer’s financial position, she argued. That’s because Section 8 tends to pay high rents, above market rate, she said. That in turn raises all rents in the area. She said she regularly hears from small landlords and renters in town about how Section 8 raises housing costs in a neighborhood.
“It’s really curious to me that they can’t make the project work,” Harp said. “Section 8 subsidies work. They do subsidize the cost of housing so much that it raises rents in the area.” She noted that Ninth Square apartment buildings have enjoyed high occupancy rates. That makes her skeptical of the developer’s request to the city and state, Harp said. So she said she’d need to hear a strong case before she’d consider the question “of whether or not we can afford to do it [the bailout]—and if we can afford it do it, how much we can afford.”
McCormack Baron failed to return requests for comment for this story and a previous one on the proposed bailout.
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posted by: Razzie on May 16, 2013 5:20pm
We simply can’t continue to subsidize these developers on their money grabs. 99 Edgewood was an LCI disaster and Ninth Square threatens to be the same as long as the City gets involved in the deal. Let the market take care of the problem. Because this developer demands a bailout doesn’t mean some other, more principled developer can’t make it work financially. There’s no need to throw tons more money at the problem like Fernandez and Nemerson want to do.
posted by: Bill Saunders on May 16, 2013 5:48pm
I am glad that Senator Harp is thoughtfully speaking out about this.
I was beginning to get worried about her candidacy. Out my bedroom window, I see some of her campaign signs stashed behind the neighboring house. One reads:
A Common PAST, A Common ENEMY, A Common Possibility.
I hope she doesn’t let bad sloganeering jeopardize her message.
posted by: Noteworthy on May 16, 2013 6:38pm
McCormack Baron Salazar Related are in default. They have access to capital to pay. If they choose not to pay, the decision is easy. Foreclose.
Would the city give any homeowner here time to pay on their full property taxes? No. Would the city, in appreciation of the fact that a homeowner spent $100K improving their home, is now upside down in value and unable to refinance, agree to charge that homeowner the same tax rate as was on the house 15 years ago? No.
McCormack Baron Salazar is a welcher. All these smart guys got in a room and cooked up funky, complicated financial instruments in order to max out the cash flow all these years. They used the tax credits for themselves or they sold them for cash for 70-80 cents on the dollar. Whoever bought them made at least 20% on their money. It is now time to pay. No forgiveness. No tax credits. No reduction in property taxes. None.
When I voted for market forces - I voted for foreclosure and a market resale. Under no circumstances short of McCormack paying the money owed, should a new deal be hatched with a company who welches on a deal. By the way, the idea that a city or CHFA would provide such financing with the expectation the developer would return for another handout was short sighted then. If we repeat it, it is just plain stupid. We should exert pressure on CHFA not to extend further credit to them either. In that last article, CHFA called them a quality developer. CHFA should raise its standards.
posted by: Clause on May 16, 2013 9:05pm
So happy that I live in a cramped apt far from downtown, but I get to pay taxes that subsidize others to live in spiffy downtown apts.
posted by: HhE on May 16, 2013 9:22pm
Noteworthy, while I am sympathetic to your argument, “welcher” is an ethnic slur against the people of Wales, and of Welch decent. With family names like “Ellis,” “Gwin,” and “Humphreys” in my family tree, I take exception to its use.
NHI, you would not let me self identify as a WASP as it was name calling. I put it to you, that while the origin of this slur is often unknown, it is insulting.
posted by: Noteworthy on May 16, 2013 10:45pm
welsh or welch (wɛlʃ) [Click for IPA pronunciation guide]
— vb (often foll by on )
1. to fail to pay a gambling debt
2. to fail to fulfil an obligation
posted by: TheMadcap on May 17, 2013 12:04am
If this was Britain, welcher might be offensive, but we’re not. Welcher has been a common term meaning someone who doesn’t pay debts for two centuries. I don’t think the Welsh have been discriminated against since the revolutionary days here if at all.
posted by: Xavier on May 17, 2013 12:31am
Francis Xavier, with 50% Welch stock here. Thanks you for defending our people!
Wales forever free
posted by: HhE on May 17, 2013 1:26am
Noteworthy, common use does not equate acceptable use. I have identified that it is a slur, its origin, and why I am offended.
TheMadcap, given that Welch transplants pretty much started this USA thing, along with the Scots, I would hardly describe Welch Americans as “oppressed.” I put it to you however, that ethnic slurs do not belong in polite society, nor in civic discourse.
So NHI, now what?
[Editor: I think you’ve given us all a lesson. Thank you.]
posted by: Curious on May 17, 2013 7:46am
Is there a reason the NHI wove Fernandez and Nemerson into this article, but not the rest of the mayoral candidates?
You didn’t even mention them to say they could not be reached for comment. If someone was just starting to read here, they would assume that the only people in the race are Harp, Nemerson, and Fernandez.
Is that fair and balanced? :)
[Editor: All candidates were asked for a position on this issue. The rest said they didn’t know enough about it to comment. The story did say that. Here’s the paragraph from the story:
[The Independent asked six Democratic candidates participating in a mayoral debate Monday night what they would do if they were in Mayor John DeStefano’s position right now and dealing with the developer’s request. Four said they hadn’t learned enough about the latest developments yet to offer an opinion. Harp, a state senator, who did not attend the debate, spoke in an interview between legislative meetings at the Capitol late Tuesday. Nemerson and Fernandez said they’ve done some investigating since the Independent first reported on the subject last Thursday.]
posted by: eastshore on May 17, 2013 10:02am
Thank you Toni Harp. From my point of view the election just got a whole lot more exciting. I had my doubts because I see her as a lifer-type politician, and I still do have doubts, but they are subsiding. I think it’s disgusting that a developer would even ask for such a break. Something was mismanaged, or something was pocketed, and now the taxpayers are suppose to suffer? Give me a break.
Also Hhe, you need to lighten up if you’re really taking offense to that term. I’m really not sure if you are serious. This is a big world, with a lot of words, and too much seriousness. Ease up a bit.
posted by: robn on May 17, 2013 1:39pm
The NHI should consider making polls less binary. I would have checked “don’t have enough information yet” box. Knowing what percentage of readers choose to be neutral is significant. Leaving it out is a fatal flaw.
I’m skeptical and suspect that the developer may have milked the Guernsey a bit too hard, but its worth noting that they established a conduct standard that has made a predominantly subsidized project succeed in a town where many others have failed.
posted by: Bill Saunders on May 17, 2013 2:37pm
Well, Senator Harp’s crew cleaned up the offending stashed campaign signs. An A+ for responsiveness.
Personally, Hhe, I find ” A Common Enemy” on a campaign sign much more offensive than “a welcher” on the message board.
posted by: Mark Chesler on May 17, 2013 2:51pm
The mother of a murdered 7-year-old girl has sued the Cherokee County apartment complex where her family lived, saying it hired a maintenance man with a history of crimes against children who later murdered her daughter.
Ryan Brunn confessed to killing Jorelys Rivera days after her body was found in a trash compactor at the River Ridge at Canton apartment complex.
In a lawsuit filed Thursday in Fulton County Court, Joselinne Rivera, Jorelys’ mother, says the complex failed to do an adequate background check on Brunn. Despite residents’ complaints about Brunn lingering at the complex playground watching children, the complex retained the 20-year-old, the suit contends.
A spokesman for the complex’s management firm, McCormack Baran Salazar, on Monday referred inquires about the suit to a statement…
Investigators have previously said that Brunn had no criminal history as an adult. But in a videotaped interview with GBI agents moments after being sentenced, Brunn admitted he had molested two girls while babysitting years earlier.
Jorelys was last seen alive Dec. 2 while at the playground, located across from the apartment where she lived with her mother and two younger sisters. She was reported missing later that evening.
Around midday Dec. 5, the girl’s body was found inside a trash compactor. Investigators determined she had been sexually assaulted and beaten to death.
Brunn was arrested two days later and charged with the girl’s killing, a crime he later confessed to in order to avoid the death penalty. But Brunn served only hours of his life sentence before committing suicide, hanging himself with his prison-issued sweatshirt.
Joselinne Rivera’s lawsuit, which seeks unspecified damages and requests a jury trial, also contends that the complex should have informed her that registered sex offenders were among the complex’s residents. The Rivera family no longer lives in the complex, attorney Lloyd Bell told the AJC.
posted by: Brian L. Jenkins on May 17, 2013 2:52pm
There are some that ask me, why are you so vociferous with your support of Toni Harp?
Because she stands up for the common tax payer.
Need I say anything else?
posted by: Bill Saunders on May 17, 2013 3:52pm
As a lover of words, I have done a little research at the NHPL.
I found it interesting that you can’t find the ‘w-word’ in any modern printed dictionary. But I have found some other sources.
From the Dictionary of American Slang:
“The word dates from the 19th Century, and is derived from the notion that of the Welsh being financially unscrupulous”
From Morris Dictionary of Word and Phrase Origins:
“It was the English Bookies who, having too many long-shot winners against them, fled over the border to Wales to escape irate bettors”
So characterizing the developer as a carpetbagging flim-flam man isn’t far off the mark.
Imagine my surprise as a youth when I discovered that Welsh Rarebit had not bunny in it at all, just toast and cheese. Man did I feel ripped off!!!
This is just another example of using political correctnesss to stifle discourse. We started talking about a candidate and an issue, but wound up talking about a word.
posted by: HhE on May 17, 2013 3:53pm
Xavier, if you are half Welch, perhaps you might get in touch with your Inner Celt, and support a candidate who would lead as first among equals, insteed of as a testosterone fueled, I dominate thus I lead, sort?
eastshore, offensive can mean an angry response to a perceived slight (which may or may not be justified), or it can indicate that someone takes exception to an inappropriate expression—as I did in this case. Do you know what is really offensive on both levels? Giving people imperatives like “you need to lighten up.” Indeed, the most offensive, inflammatory words in the English language are “calm down.”
NHI, I found your “I think you’ve given us all a lesson. Thank you.” a brush off.
How upset am I? Not as much as not being to go to Leffont’s Edward Green and Gaziano & Girling truck shoes this year. I thought one of their shoes would work perfictly with a mess jacket and my kilt at Gold’s Dragoons. I am also far more devistated that since we took a week at Mohonk, have our all but mandatory week in Maine, and will be going to Bermuda this summer, that I will not be able to take my children to London this year.
Yes, Bill Saunders, I find Toni Harp’s message more worrisome.
posted by: robn on May 17, 2013 4:35pm
Anyone rude enough to use the term “welcher” should be taken away in the paddy wagon. BTW, where’s that five bucks you owe me?
On subject, Harp is probably correctly identifying the reliability of Section 8 payments and I share her skepticism of the projects financial distress. Nemerson and Fernandez are correct that this area is vital and shouldn’t be abandoned, but I don’t think a default and subsequent repurchase would necessarily change the character of the neighborhood unless the new buyer was remiss in monitoring tenants conduct (self-inflicted wound), or decided to abandon the Section 8 program entirely (not sure why they would since its a reliable source of market rate rent.)
posted by: HhE on May 17, 2013 4:54pm
Bill Saunders, at the risk of beating a dead horse all the way to the glue factory, this is not an example of political correctness stifling political discourse. This is a lesson in manors that does not appear to be taking. I put it to you, the true threat to civic and civil discourse in our country today is the use of insults and put downs, typically used to deter a response, and causing a message to get lost.
Is it acceptable to use ther term W.O.P., so long as it is used thus, indicating it is an acronym for WithOut Papers (as so many Italian immigrants once were)? Do I have any business saying “I saw a documentary on HBO last light. It was called The Sopranos”.” Surely, Italian Americans are not an oppressed minority in New Haven.
Now, any chance you have a photo or two of Ms. Harp’s sign that appears to be divisive? I am prepared to accept that the one enemy might be non human, but I would need real evidence of that, and not some after the fact spin.
As to the original issue: like many of the candidates, I should like to know more. However, my first impression is this is one too many free hand outs. If the original developer cannot (or will not) make this work, then a full investigation is in order. I also opine that this is one more piece of the messy pie Mayor Destefano baked that will spend years eating.
posted by: HhE on May 17, 2013 5:00pm
Robn, can I pay you in beer? You know how we celts are; always getting a little too excited, painting our faces blue, and then mixing it with another tribe. I’m low on the blue paint, so I don’t need the beer that much.
Me thinks your second paragraph is spot on.
posted by: Bill Saunders on May 17, 2013 5:38pm
One more lash on that horse….
It’s not just about a word, but about the context it is used in, the overall tone and credilbility of the post, and the reputation of the poster. Give people their personal nuance and style.
As for the offending signage, I should have snapped a photo yesterday. Today, they are neatly ordered, and facing away. To go over there to take a picture would be trespassing.
posted by: Grasshopper on May 17, 2013 8:52pm
The knee jerk reaction is to say screw the developer and let the property get foreclosed and go back to the lender. In this case the lender is CHFA (ie you and me). To put the deal in perspective there’s $86 million in debt. if the lender took the property back and sold it at a market price (with market rents), the value of the property in rough numbers is worth $70 to $75 million. With affordable rents that are included in the project, that would lower the value. The current debt is $86 million. If the property was sold to the open market the affordable rents could conceivably go away. Thus the quandary. A successful mixed income complex could change to all market rentals.
When this project was built, the cost to build the project was probably much higher than the actual market value, thus the need for public financing. Although many projects like these fail miserably (note several deals done in downtown Hartford in the past 10 years), this by all accounts did what it was supposed to. It brought to life a part of downtown that would have taken decades longer to occur based on market forces. The loan that the city has on the project was a mortgage that never had a chance of being repaid, as it was subordinate to the first mortgage (think home equity loan). Without its original structure, again the project could never have gotten off the ground. if the property gets foreclosed, the city’s debt would be washed away as well as the value of the property is not worth the total debt. This is a typical structure for the public benefit it created.
Kudos to the candidates who withheld judgement until seeing the details. This situation is all about the details. There’s probably a structure that works that isn’t a “give away”. If we want to continue to have this property run as a mixed income complex there will have to be some incentives. The owner in this case has no equity at stake (there is none) and is in it for the fee income.
posted by: Stylo on May 17, 2013 10:46pm
Let ‘em fail. There is enough demand for housing that some other company will snatch it up.
posted by: beyonddiscussion on May 18, 2013 12:17am
Btw, Where is Toni? It’s mid-May and her campaign is nowhere to be found. I’m starting to get the feeling that she may fade out of this odd race like Keyes and others have done before her.
posted by: Mark Chesler on May 18, 2013 11:51am
Bay City News
A suspect in a string of violent sexual assaults along San Francisco’s 24th Street corridor was employed as a nutrition services worker for the San Francisco Unified School District, a school district spokeswoman confirmed Monday.
Frederick Dozier, 32, is being charged with numerous felony counts…
He is suspected of assaulting three women between June and December along 24th Street. In each instance, the victim was violently attacked and robbed, according to police.
Dozier was arrested…after investigators received an anonymous tip and were able to link him to evidence found at the sites of the assaults, which occurred on June 17, Nov. 18 and Dec. 8, police said.
He was booked into jail on suspicion of attempted murder, assault, robbery, rape and other sexual assault charges…
Dozier also worked at Green Streets, a company that manages recycling and composting, provides janitorial services and educates residents on how to reduce waste. The company operates at three low-income housing complexes in San Francisco, including Bernal Dwellings on Cesar Chavez, where Dozier was arrested…
David Mauroff, vice president at McCormack Baron Ragan, the property manager at Bernal Dwellings, said Dozier had worked for Green Streets for “going on two years.”
“It’s a real shock to find out about this,” he said.
Mauroff said Dozier sorted trash and performed other tasks as part of the program, and that he isn’t aware of any problems with Dozier while he worked for Green Streets.
Dozier spoke at a launch event for the Green Streets program in May that was attended by then-Supervisor Ross Mirkarimi. He is pictured on the organization’s website standing at a podium at the offices of the San Francisco Planning and Urban Research Association, where the event was held.
On the Green Streets website, Dozier is quoted as saying the company “gives me the opportunity to do something positive, help my environment, and become a role model in my community.”
posted by: robn on May 19, 2013 9:55am
Your logic that affordable housing makes the project an unattractive investment is flawed at its core.The section 8 program offers affordable rent to poor tenants and then subsidizes the balance up to market rate which in New Haven, is historically high.
posted by: Mark Chesler on May 19, 2013 1:11pm
Around that time, the community learned that the city was leaning toward McCormack and asked for an explanation…
In November of 2006, the city organized a meeting at Edmondson High School for community members to hear from the various companies about their proposals…
Graziano said residents living near the site strongly opposed McCormack, despite the city’s attempts to convince them otherwise.
“Frankly, I changed my mind based on that,” Graziano said. “My original recommendation was consistent with the panel, and I would have been happy with that, but the community was so adamant about it.”
Graziano said he was never asked by the mayor to change his position and that the only pressure he ever received was from the community.
Residents often express strong opinions about redevelopment plans, but this case is unusual in that the project was not expected to differ greatly regardless of which team won. The community and the city had already established the broad outline of the proposed neighborhood through a 2004 zoning plan.
Some said they objected to McCormack mainly because the city seemed so eager to use them.
“It wasn’t about their work,” said Angela Bethea-Spearman, president of the Uplands Community Association. “They appeared to the community to be pre-chosen. We wanted a fair process for everyone. [They] knew too much and [weren’t] from here. It did seem like it was set up.”
Bethea-Spearman added that the McCormack team did not provide details about its plan to use minority- and women-owned subcontractors while the Pennrose team had put together an impressive list that included many of Baltimore’s best-known minority contractors.
...the panel did not weigh heavily each team’s ability to use minority firms. Out of a possible 160 points, the panel’s scoring criteria reserved only five points for the use of minority-owned businesses.
The city’s Housing Department has declined to release the results of the scoring process.
posted by: Grasshopper on May 19, 2013 4:11pm
affordable deals are not necessarily unattractive to investors. I believe 9th square (someone here might be able to verify) has not just section 8 tenants, but a certain percentage of units that have to rent for below market rents (typically 20%) based on the CHFA financing. This is what impacts the value the most. you are correct that section 8 rents give the owner rents that add up to market,but those aren’t necessarily the issue.
The points i raise are merely to show how value is impacted versus the current debt on the property. There was a public policy reason that subsidies were given to get this deal off the ground 20 years ago and it worked. The neighborhood today doesn’t require the same type of public financing because market rents justify private development. With that said, with private development come market rents in order for them to be financially feasible. As a result, mixed income living will not occur in these private developments without public assistance. You can’t have it both ways. And this is the issue at stake for 9th square because of the debt load in place.
posted by: Grasshopper on May 19, 2013 5:22pm
i just found an interesting paper written about the the Residences at Ninth Square by a Yale law student in 2011 describing the history of the whole deal. Any candidate running should at least give it a read for interesting perspective. It is noted the project has 57% “affordable” rents.
posted by: Mark Chesler on May 19, 2013 5:32pm
Rolling Hills funding ‘alarming’
Durham News 9/28/2010
A group affiliated with the Durham Affordable Housing Coalition has produced a 60-page report highly critical of the city’s financing plan for the Rolling Hills redevelopment project.
According to the report, “What’s At Stake: Housing for Low-Income People in Durham,” the [McCormack, Baron] Rolling Hills plan would cut the number of low-cost residences the city and nonprofit agencies can build in the next decade from 812 to 197.
“This is an alarming reduction, one that none of us can settle for,” said Terry Allebaugh, director of the nonprofit Housing for New Hope.
Besides reducing future low-cost housing, the report says federal money allocated for services such as financial counseling, gang prevention and job training - $1.139 million over the past five years - would be severely curtailed.
However, the Rolling Hills financing plan was conditioned upon the project’s receiving $1.14M in tax credits from the state Housing Finance Agency. That application was denied last month, leaving the project and its financing in limbo for the time being.
“I think the pause the North Carolina Housing Finance Agency has given us, in not awarding this year the tax credits to the Rolling Hills development, gives us time as a community to reflect upon the funding plan,” Allebaugh said.
As part of the tax-credit application, the City of Durham committed $9.4 million for Rolling Hills’ first phase of construction and infrastructure improvements.
To cover that cost, the city planned to borrow against anticipated future grants from two federal programs (CDBG, and HOME), tying up all but $225,000 per year for 10 years.
Dedicating that money to Rolling Hills leaves two other depressed areas previously targeted for federal funds - Northeast Central and Southwest Central - with very little.
It also cuts nonprofit agencies that help provide low-cost housing such as Habitat for Humanity…off from an accustomed funding stream.
posted by: William Kurtz on May 19, 2013 5:53pm
“Is it acceptable to use ther term W.O.P., so long as it is used thus, indicating it is an acronym for WithOut Papers (as so many Italian immigrants once were)? “
That etymology for wop is apocryphal; it’s likely that it’s an abbreviated form of guappo, for handsome man, sometimes with the connotation of a man who’s either a dandy or a thug.