Allan Appel Photo
Dwight Gardens.
One of the partners in the rescue of the failed and foreclosed-upon Dwight Garden co-operative apartments on Edgewood Avenue, the Housing Authority of New Haven, will no longer play a part in the deal.
At its regularly scheduled meeting Tuesday night, the HANH board voted to terminate prior agreements with controversial developer Garfield Spencer’s First National Development Corporation. The city tapped First National to take over Dwight Garden in exchange for making $5 million in badly deferred repairs to the 1960s-era structures.
HANH, through its private developing entity Glendower Group, Inc., had advanced a first payment of $89,000 of a larger half million-dollar pre-development loan to Spencer and his company. In exchange for that investment, HANH was to have been given the right to provide 40 federal Section 8 vouchers for tenants to live there.
The pre-development loan, a common tool, was to enable First National to obtain financing and begin the relocation of the residents of the 80-unit co-op, one of several ‘60s-era not-for-profit communities that have been evolving into private complexes in the face of financial problems and poor maintenance.
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When First National could not make an initial repayment, HANH last month extended the period.
On Tuesday, however, commissioners terminated those agreements — without jeopardizing the project. That’s because First National has obtained alternative, private financing.
HANH Commissioners Bob Solomon and Jason Turner
“The development is going to proceed without HANH’s investment. HANH/Glendower, as of yesterday’s board action, no longer has a role,” said HANH’s Executive Director Karen Dubois-Walton.
That does not mean, however, that the city government itself does not have a role. City Hall’s Livable City Initiative (LCI) is still lending the developer money in a subordinate role to the main lender. It may also provide a lead-abatement grant.
LCI Executive Director Erik Johnson confirmed that the developer is close to arranging terms with its lender, “with the result that the city’s initial commitment of $1.2 million is now going to be reduced to $500,000 to $700,000.”
He added, however, that even with an absence of HANH and a diminished municipal investment, “The city is going to make sure the residents get treated fairly.”
That means LCI will monitor that the renovations follow the HUD guidelines. That means that of the 80 units, groups of 20 units must be affordable to people with varying percentages of AMI, or area median income, up to 115 percent.
That means what is shaping up is a mixed-income development with no HANH or city subsidy. However, Johnson added, ” [for] the people in Dwight co-op before the foreclosure, the developer has a responsibility to make sure the rents no way exceed 30 percent of their income pursuant to HUD guidelines.”
He added: “They can’t make the renovation and increase the rent to the level they can’t afford to live there.”
Johnson said that last week the developer held a meeting at the nearby substation explaining the changed situation and claiming a starting date of construction this summer.
When the Dwight complex was foreclosed upon in July, 52 units were occupied. To date, only 37 are. That subtraction represents those families who decided to go elsewhere as well as a number who were told to leave because they had not paid for their fees over a long period of time.
Before HUD and the city stepped in due to mismanagement, there were no rental subsidies at Dwight. By these turns of financial events, there will be no subsidies by the city or HUD in the future Dwight as well.
Johnson said that he could not reveal who is financing the project because the dotted lines have not been inked. He did indicate construction could begin in the early part of the summer.
Rember.I told all of you this was going to happen.
posted by: Threefifths on September 23, 2010 5:46pm
The commissioners voted unanimously in the positive, which in effect was a recommendation to the Board of Aldermen to accept the agreement.
Again Puppets who are control by the Crooked two party system at work.I bet you this will never get off of the ground.
And the same will happen with this crooked school reform.