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Dwight Co-Op Deal Advances

by Thomas MacMillan | Mar 18, 2010 4:07 pm

(3) Comments | Commenting has been closed | E-mail the Author

Posted to: Housing, Dwight

Thomas MacMillan Photo When the feds move forward with a foreclosure on the Dwight Street co-op complex, the city is ready to buy the property—if it can find a developer for the apartments.

The City Plan Commission Wednesday night unanimously approved a deal that could transfer ownership of a decades-old Edgewood Avenue housing co-op to the city from the federal Department of Housing and Urban Development (HUD).

That assumes the city’s able to buy it first. That’s still open to question.

The city has right of first refusal on the property, and would pick it up for a dollar. But the deal will happen only if the city has closed negotiations with a developer whom it can pass the property to—and if it closes negotiations with HUD.

HUD plans to proceed with foreclosure sale in mid-May. It’s negotiating with New Haven to allow the city to buy it first. But the two sides are still trying to work out the terms, including how much of the housing has to remain reserved for low-income families, and how many million dollars of repairs the complex needs.

The Dwight Co-op Homes stand on Edgewood Avenue across from the old Dwight School. Since 1969, the 81 homes have operated as a co-op for low-income families. For decades, it ran successfully. Then things began to fall apart 10 years ago and the co-op fell into debt to HUD, which holds the mortgage on the property. Read the full story about the co-op’s decline and the current state of city-HUD negotiations here.

Now HUD has initiated foreclosure proceedings and the city has been working to preserve the co-op as affordable housing.

The co-ops are one of several 1960s-era government-backed housing experiments in town that offered safe, well-kept communities for working-class families for decades, but then fell into financial trouble and physical disrepair.

City Economic Development Director Kelly Murphy has said she hopes the Livable City Initiative (LCI)  can buy the property from HUD and turn it over to a developer to run. That developer could be a non-profit organization or a for-profit business. She’d also like flexibility to allow some of the units to be rented to middle-income families; she said mixed-income complexes are more stable.

On Wednesday evening, LCI staff Evan Trachten presented City Plan commissioners with the proposed sale plan, which needs the commission’s approval. Trachten said the city would act as a “pass-through” between HUD and a developer. The city would buy the mortgage for $1 and sell it to a developer for the same price.

The buildings are in need of a renovation of approximately $4 million, according to a City Plan report. The city is in negotiations with a developer, but no deal has been finalized, according to the report.

Trachten said the city is hoping to preserve affordable housing and to prevent the Dwight co-op from falling into private hands, as another New Haven co-op, Trade Union Plaza did. “That was horrible,” said City Plan Commission Chair Ed Mattison.

However, if the city does not have a deal with a developer by the time HUD follows through with its foreclosure, it will not buy the property, and foreclosure will occur. Contacted before the meeting, Murphy said that she couldn’t comment on the negotiations ongoing among Dwight Co-op, a developer, and HUD.

The matter will be heard by the LCI board of directors on March 31.

Thomas MacMIllan Photo

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posted by: Ben on March 18, 2010  4:56pm

It would be great if these were offered as middle income homes. New Haven needs that close to downtown more than it needs low income.

posted by: anon on March 18, 2010  9:10pm

If part of the property is eventually refurbished, this would be a good site for some small mixed-use development, perhaps on the ground floor of the property’s southeast corner.  Small-scale retail/office space activity could help pay the development costs and provide a variety of destinations in the neighborhood (both at night as well as in the middle of the day), potentially making it more walkable.  Several folks who live in this neighborhood have recently pointed that out to me as a concern.

It’s important that the elementary school located across the street is in an environment that people feel safe walking around at day and night.

Most residents in this area who I’ve known have said that they feel perfectly safe walking on any section of Chapel, Whalley, and Howe at any hour, because of the retail activity and diversity, but less so on residential-only streets like Edgewood, Dwight, Goffe, George and Elm, which can be deserted during work hours and later in the evenings.

Having these types of amenities, not to mention job opportunities, right in the neighborhood could also attract more mixed-income residents who have a choice to live anywhere in New Haven. 

It is important to have diverse, mixed-income neighborhoods and housing development, not just to accommodate all income levels / ages / backgrounds here in our city, but also because so much of people’s social support network and job opportunities come from their neighbors—and this is especially important for lower income families.  If we just zone wealthy residents into certain neighborhoods and lower-income residents into certain developments, our city will just end up being a bunch of fractured, gated communities where people are isolated from one another.

It’s a shame what happened to Trade Union Plaza, but the situation we have now where a large proportion of New Haven’s housing consists of 100% lower-income developments is probably not ideal, either.

posted by: soundview on March 21, 2010  9:46pm

Its a shame to see another coop going down the tubes, particularly because it seems the tenant/owners are to blame and not the usual coop unfriendly management.  If the repairs are really $4,000,000+ there must be an unconscionable amount of deferred maintenance.  Did this really boil down to some selfish coop members not voting to raise the minimal funds to keep the property up until the repair bills ballooned?  Where was LCI in all this?  This level of disrepair would never be allowed in a commercial rental property so how did the coop get away with it and why did it take HUD so long to notice that their equity was being drained away?  At >$50,000 per unit just for repairs plus a bunch of former owners used to paying submarket “rents” this is a pretty bad deal for a developer unless there is some financial support from the city or a bucketload of tax credits (at ALL OUR expense).  Can you imagine how many evictions/fair rent commission hearings there will be when the former owners (who, after all, did drive the place into the dirt) are (gasp!) actually asked to pay the fair market rent?  The real crime here is that the very people who made this grand housing experiment fail were shielded from the consequences of their actions by federal and city government, and to bail them out will likely require some public funding that we all pay for. OUCH!  I do feel sad for some of the long time coop members who were apparently outvoted or intimidated to the point where the property became unsustainable. 
Given the visible deterioration at one of the few (if not the last) remaining New Haven coops on Columbus Ave, I expect we’ll be reading about them in the Independent within a year…

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