Thomas Breen file photo
275 Winchester: The rent's going ... down?
A Norwalk-based affordable housing nonprofit plans to purchase the Winchester Lofts luxury apartment complex for $32 million and turn it into a mostly below-market-rent building.
In support of that goal, an aldermanic committee voted Tuesday night to advance a 17-year tax break deal that would see the potential new owners pay the city $2,000 per unit per year — with a 3 percent annual increase — for the 120 apartments that would be set aside at reduced rents.
Frank Farricker and Suzanne Cahill of The Mary Fund, Inc. detailed those plans during a presentation before the Board of Alders Tax Abatement Committee in the Aldermanic Chamber on the second floor of City Hall.
They described how their nonprofit is under contract to purchase Winchester Lofts, a 159-unit complex at 275 Winchester Ave. that opened in 2015 as some of New Haven’s highest-profile high-end housing.
The opening of Winchester Lofts marked the first part of a long-planned resuscitation of a part of New Haven that once served as an around-the-clock mini-city composed of factories with tens of thousands of people churning out Winchester rifles. Those post-industrial sites, long empty, are now emerging as a 21st century upscale urban living and tech hub.
Farricker and Cahill said their nonprofit plans to purchase Winchester Lofts by December of this year. “Everything else is in place” except for the local tax abatement deal, Farricker told alders. “We’re ready to move forward.”
The building is currently owned by a pair of New Jersey investors, Shloime Rosenberg and Shlomo Katz, whose company purchased the property in December 2022. According to Farricker, 10 percent of the building’s apartments are currently set aside at below-market rents. The remaining units are rented out at market rates.
Farricker and Cahill said that, under The Mary Fund’s ownership, 120 of the building’s 159 apartments — or 75 percent of the whole — would be permanently set aside at deed-restricted, below-market rents for tenants making between 30 percent and 80 percent of the area median income (AMI). That currently translates to annual incomes of between $27,300 and $72,800 for a family of two.
“The current rents are on the higher end of the rental spectrum in New Haven, and rents will be rolled back between $300 and $1,100 per month depending on the unit,” Farricker wrote in The Mary Fund’s tax break application to the city.
At Tuesday’s meeting, he said that the new rents at the building will be around $1,098 for studio apartments, $1,197 for one-bedrooms, and $1,300 for two-bedrooms. That means some current residents will see a $1,000 reduction to their monthly rents once this switchover happens, he added. Rent rolls included in the tax break application show current rents ranging from as low as $858 for a studio apartment to as high as $3,475 for a two-bedroom.
“The proposed rent adjustments will be immediate upon acquisition, regardless of the tenant qualifications,” the tax break application continues. “All existing tenants will be offered income qualification to determine whether they meet either the 30%, 60%, or 80% AMI set-asides, and from this qualification we will try to accommodate all existing tenants in place.”
Tenants who do not qualify for the rent-reduced apartments will be given an opportunity to move into one of the building’s 29 remaining market-rent units, which would not be covered by the proposed tax abatement. “In the event a tenant cannot qualify based on their income levels, and there are not enough corresponding market rate slots for them to remain on site, The Mary Fund will work with the tenant to assist their move to another location within New Haven.”
Farricker told alders on Tuesday that The Mary Fund expects only “two or three people” to be displaced from Winchester Lofts after the reduced-rent conversion takes place.
Only two or three? Upper Westville Alder Amy Marx asked. She said her impression was that Winchester Lofts is a pretty “high-end” building.
That’s true, Farricker said, but “most of the tenants are income-qualified” already. “They’re certainly paying a very significant amount of income” for rent.
So there won’t be need for a “major relocation” once these new income limits are applied for a majority of the building? Marx asked.
“Not major,” Farricker replied. “We’re anticipating some.”
How many of the 159 apartments are currently occupied? Marx asked.
“Right now it is at 90.5 percent occupancy,” Farricker said.
According to the tax break application, The Mary Fund is set to acquire Winchester Lofts for $32 million, “which represents the existing debt on the property. It is additionally shouldering $1.5 million in the cost of the transaction, including reserve fees and costs, $625,000 in site work. It is investing $9 million in company cash equity to complete the transaction.”
How exactly will The Mary Fund be financing these rent reductions? Marx asked.
“We get a preferential interest rate from Fannie Mae,” currently at around 4.35 percent, which “allows us the opportunity” to permanently reduce rents for a large percentage of the units in this building, Farricker said, so long as those affordability levels are deed restricted.
Farricker also told the alders — and wrote in the tax break application — that The Mary Fund has set aside funds for the installation of air purifying equipment “to help tenants withstand any potential negative environmental impact” associated with the ongoing demolition of the dilapidated ex-factory right next door.
Cahill said that, in addition to reducing the rents for a majority of the apartments in this building, The Mary Fund is also looking to “provide services to people in a very equitable way” at this building. That would mean providing “vocational services,” bike safety resources, “emergency childcare,” and other supports in Winchester Lofts’ community room.
Ultimately, the committee alders voted unanimously in support of recommending approval of a 17-year tax break for the property.
That deal is contingent on The Mary Fund acquiring Winchester Lofts by December.
If approved by the full Board of Alders, it would require the prospective new owners to pay the city $2,000 per unit per year, with a 3 percent annual increase starting in the second year of the deal, for the 120 below-market-rent apartments.
“I’m 100 percent in favor” of this project, said Newhallville/Dixwell/Prospect Hill Alder Troy Streater, whose ward includes Winchester Lofts.
“I’m ecstatic about it,” Streater added in an interview with the Independent on Wednesday. Ward 21 needs more affordable housing, he said. “Affordable is definitely a good thing.”
Asked on Wednesday to elaborate on why The Mary Fund is interested in purchasing Winchester Lofts, Farricker told the Independent by email, “We think it’s a great project, because rents are too high and people need a break.”
Correction: An earlier version of this article stated that, under the proposed tax abatement deal, Winchester Lofts’ new owner would owe $2,000 per unit per year — with a 2 percent annual increase — for the 120 below-market-rent apartments. The annual increase rate is actually 3 percent, not 2 percent. The article has been corrected accordingly.