The city has asked local developers to bid on buying a troubled Dwight housing complex that a previous developer promised to save—and instead let slip further into disrepair.
The project in question is Dwight Cooperative Homes on Edgewood Avenue, an 80-townhouse complex whose rising and falling fortunes have mirrored those of a slew of idealistic New Haven experiments. It opened in 1969 as a family-owned cooperative, one of a bunch created in town with federal money and local institutional backing during the 1960s. Like the other co-ops, the complex declined amid charges of financial or board mismanagement and infighting. Just as the families were about to finish paying off the mortgage to the complex, it was foreclosed upon; like other former co-ops, it was sold to a private owner with the help of city government.
Unlike, say, Ethan Gardens around the corner on Orchard Street, Dwight Co-Ops did not recover under private ownership. The new owner, Garfield Spencer of Bridgeport, who had a checkered development history in other cities, fell behind in both taxes and repairs despite constant prodding by city government. The city has now moved to foreclose on the property; Erik Johnson, head of the Livable City Initiative (LCI), city government’s neighborhood anti-blight agency, last week threatened to take Spencer to court unless he made repairs fast. (Read about that here.)
Meanwhile, Johnson (pictured meeting last week with Dwight Co-Op tenants) confirmed that he has moved to find a new buyer to take the property off Spencer’s hands. LCI issued a request for proposals from developers, “primarily” local developers, to buy the property, Johnson said.
Johnson asked developers to produce proposals by the end of the month.
Johnson said Spencer has agreed to sell the property. (Spencer failed to return a call seeking comment.) The federal Department of Housing and Urban Development (HUD) has the right to take the property away from him for breach of contract. But everyone agreed a transfer of title would happen much sooner, with fewer problems, if the city and Spencer simply negotiate terms of a new third-party sale, Johnson said. Under the terms of his contract with the city, Spencer cannot make a profit on selling the property, so the negotiations involve calculating an agreed-upon set of costs incurred to date, according to Johnson.
The city had promised to contribute up to $1 million to Spencer’s renovation of Dwight Co-Ops. It never ended up releasing any of that money to Spencer, Johnson emphasized.
Michael Schaffer of C.A. White was one of the developers Johnson approached about submitting an RFP to buy Dwight Co-Ops. Schaeffer said he’s not sure yet if his firm will.
“We tend to be market-rate managers,” he said of C.A. White, which manages apartment, office, retail, and hotel properties. “We’re always open to looking at opportunities to see if it’s something that makes sense. I’m not sure if [this] is in our bailiwick.”
“I hope the city wisely gives this project to a local developer with extensive experience renovating community housing. The days of out-of-town operators taking advantage of New Haven have hopefully ended,” said Shmully Hecht, whose Pike International revived the former Ethan Gardens cooperative, among other complexes. Hecht said Pike “intends” to submit an RFP for Dwight.
posted by: Righteous Cyclist on March 18, 2013 8:55am
Why was the city willing to subsidize Mr. Spencer’s for-profit rehabilitation in the first place? What’s the story behind that $1,000,000.00 deal? Where did those funds come from? Were the funds part of tax incentives, or did the city offer actual cash?
posted by: Gretchen Pritchard on March 18, 2013 9:00am
Too bad they’re so ugly, like so much else built at that time with the best of intentions but crazy design ideas.
posted by: Curious on March 18, 2013 12:18pm
Probably going to end up being one studio apartment with 250 parking spaces :)
posted by: Selena Hoffman on March 18, 2013 1:04pm
Tear the whole thing down and give us a green space incorporating athletic fields and playgrounds for the several public and private schools in the immediate area.
posted by: For the Record on March 18, 2013 1:48pm
Spencer tried to “extort” a profit from everybody else who approached him about investing in the project, and he will continue to do so….
Why should anyone repay him his costs when his rents have exceeded the taxes he (didn’t) pay, and much of his “work” needs to be ripped out and done again (example: new siding installed over the rotting original siding). Why repay costs that were related to his fund-raising, his faulty architectural and maintenance work, or other soft costs (his own management)?
Play this one straight, and foreclose the guy out… even if it takes longer. He is desperate (see Judicial CT Lawsuits against him) and LCI is “crazy” if they think he will easily go away. Also, the foreclosure is probably needed to clean the title of all liens (which he allowed to accrue) ...
Make any new developer post (escrow) the $4MM - $5MM ($50,000 - $60,000 per unit) it will cost to re-hab, and post that in cash or with a firm Letter of Credit so that it isn’t “smoke and mirrors”...
Pick the best developer with a proven track record - do what’s best for New Haven - limiting this to a local developer (one could argue) encourages cronyism… If somebody has built/managed many units and posts the project costs in cash so he/she is “all in the game” isn’t that better than somebody who is selected just because they are from New Haven ??
posted by: Razzie on March 18, 2013 3:48pm
I agree with Record that the cleanest way to go is to foreclose the property, and not put their hopes on a “negotiated” buy-out of the owner’s supposed costs and expenses. I see nothing that supports the conclusion that the owner will be reasonable or timely in bringing this to a conclusion. And as long as renters’ checks and Section 8 payments are still flowing, the owner has no incentive to bring this to an end.
I disagree that LCI should expect that many developers would agree to post a $4M - $5M cash or LOC on this project. Other financing alternatives are available that provide sufficient evidence of capability and interest. Besides, if the developer is local and not an absentee developer, his/her reputation is on the line to make the project work for everybody involved.
posted by: For the Record on March 18, 2013 5:06pm
The reputation of local developers in not the issue… It 100% should be a Bonded project since the “dirt” is coming from the City. Unless that politician (or LCI) is willing to put their job on the line if the developer “blows it”, why not ask for the Bond? The so-called reputation of any specific developer is little comfort for a project this large. Why take the risk?? Anyone credible can post it, or they probably are not strong enough to be allowed to bid. A Bond can easily be arranged by that same financing entity that would be backing the developer, anyway…
For the (further) record: I believe this guy has allowed over $450,000 of liens to rack up: $200,000 for Taxes alone (check the City’s web-site), the loan from the Housing Authority (nobody has the guts to talk about that), past due water, sewer, etc… check the land records… it is appalling.
LCI (let alone any Director of that Agency) does not have the legal authority to “kill” those liens - so whomever buys out this guy has to pay those debts - maybe a side deal can be struck with NHHA (Housing) since they have ‘egg on their face too”, but the other liens are statutory. LCI knows that the economic value is barely over the liens that have accrued - so expecting an “economic” solution by buying of Spencer is absurd - there won’t be enough left over for him to make it worth his while - no incentive. Hence the requirement to foreclose him out… and time makes it worse with respect to the liens that are building
posted by: Seth P on March 20, 2013 10:21pm
Glad to know that the search is on for a more accountable landlord. In the meantime, what happens with the neglected families who still live there? Immediate action is required on the part of the city to make sure that those people are not living under such deplorable conditions.