Joint Public Hearing of the Salem City Council and Planning Board was held in the Council Chamber on Wednesday, May 15, 2013 at 7:00 P.M. for the purpose of discussing M.G.L. Chapter 121A designation for Salem Heights Preservation Association, Limited Partnership located at 12 Pope Street, Salem, MA and Loring Towers Salem Preservation Associates Limited Partnership located at 1000 Loring Avenue, Salem, MA. omNotice of this hearing was posted on May 9, 2013 at 6:16 P.M.
Councillors Sosnowski, Prevey and Siegel were recorded as absent. Councillor O’Keefe arrived at 7:10 PM.
Councillor Jerry L. Ryan presided.
In attendance were the following: Lynn Duncan City Planner, Deborah Jackson Assessor, and the following Planning Board Members Tim Ready, George McCabe, Dale Yale, Ben Anderson, Kirt Rieder, Randy Clarke and Beth Gerard Clerk of the Planning Board.
APPROVAL OF CHAPTER 121A DESIGNATION FOR
SALEM HEIGHTS PRESERVATION ASSOCIATION LIMITED PARTNERSHIP,
LOCATED AT 12 POPE STREET, SALEM, MA
President Ryan turned the meeting over to Lynn Duncan City Planner which she gave detailed information as to the purpose of this public hearing relative to Massachusetts General Law Chapter 121A Designation for Salem Heights. She then turned the meeting over to a representative of the Salem Heights Preservation Association he went on to say that 40 years ago they received approval of a 121A designation. The process is the same as zoning. Public hearing is required and a recommendation by the Planning Board is required to be sent to the City Council, then City Council approval and finally it is signed off by the Mayor.
Attorney Kathy Bockman – Salem Heights representative for property located at 12 Pope Street is a 283 Unit development. She stated they are looking for renewal of status. This does not mean they are exempt of paying taxes. The history of the property is that it was developed in 1974 and built on a hill which was not an easy site. By the 1990’s the site needed extensive renovation and it was decided that the building would be sold. The City stepped in and an organization was formed to keep affordable housing. The rental income was capped. Over the past 10 years many improvements were tackled but still it was a challenge to keep up with the repairs. They refinanced and got grants as resources to keep the property affordable. The application before the Council is to continue to keep the property as low income housing. The
State’s 121A program helps by annually 1% of cash
value and 5% gross income of rents. Taxes would be paid under the same formula as the Assessor provides. We are seeking a 40 year term. The statue allows a minimum of 15 years and a maximum of 40 years. The details are in the application and we are grateful for the continued support.
Councillor McCarthy - asked whey they wanted 40 years.
Attorney Bockman - stated to keep affordable for 99 years.
Councillor McCarthy - asked the Assessor Deb Jackson if 1% cash value of property is that agreed?
Attorney Bockman - said the Assessor could explain.
Deborah Jackson Assessor - stated the base line is 1% of the cash value. 5% of the gross income.
Kirt Rieder Planning Board member - asked if the staircase could be fixed
Attorney Bockman - stated Thank you for your question, it is a difficult situation. The staircase is closed off for safety. To be come handicap compliant would take many ramps and not work for affordable housing.
Kirt Rieder - responded that this bears observation by the building inspector, we don’t want to bypass the opportunity.
Attorney Bockman - stated we did look at this. A large portion of this is City owned land. Due to liability the owner and city decided it is a very difficult project.
Councillor O’Keefe - stated he believes that the paperwork has an error
Attorney Bockman - stated the documents can be corrected.
Lynn Duncan City Planner - stated she doesn’t understand the issue
Deborah Jackson Assessor – stated Councillor O’Keefe was correct the order should state 40 years.
Councillor Ryan - opened the meeting to the public for comment.
Charlie Speliotis - resident of America Way stated he was confused regarding applications. If new applications properties have to show blight. He was an advisor to Boston Planning Board on 121A applications. Nothing in statute for that usually it goes on tax rolls after the 40 years.
Attorney Bockman - stated after the original owner was ready to put on tax rolls and wanted to sell the City stepped in. Applications for projects are to prevent blight to keep it safe and affordable and prevent it from having conditions decline.
Councillor Legault - is 100 years normal thing or exception.
Attorney Bockman - stated State allows for 99 years or in perpetuity.
Councillor Legault – 40 years expired it this is not an extension is this new ground?
Attorney Bockman – 121A was first used for the Prudential Center in Boston. It was created in the 1970’s. It was a device to deal with income streams, perpetuity came later.
Councillor Legault – Is there any other housing beyond 40 years?
Attorney Bockman – stated no, we went to the State, there is no prohibition to allow for new application. Application was vetted by the State prior to coming to the City.
Councillor Turiel – Why allow it to expire and start new?
Attorney Bockman – You have to work with what the statute says. The State said to reapply.
Councillor Siegel – concerned with breaking ground, will this open the city up to liability? Concerned with a legal suit, statute says blighted area not in case of blighted area.
Attorney Bockman – It’s what we have to work with. No harm no foul, not asking to be exempt from taxes. We have new circumstances and this was written 40 years ago.
Mr. Speliotis – I was a housing director this is a perplexing situation. Renewal is not in the statute.
Councillor Turiel – I see the concern as a test case. Who would have to challenge this?
Planning Board Member – How will this renovation / maintenance benefit the tenants?
Attorney Bockman – a lot of money is going to energy costs like windows.
Alexa Daly – Preservation of affordable housing, Boston residents would see tackle energy costs and solar panels to assist heating and air conditioning. The building is 40+ years old. The Capital Plan is $250,000 this year and next year $300,000, there are concrete and plumbing issues. This is all needed to keep in good repair. Options to bring in income are limited. The property has been owned only for ten years.
Councillor Siegel - asked Ms. Daly there have been a lot of changes to the outside of the building, have there been renovations on the inside and what was done?
Ms. Daly - stated yes some apartments had new kitchens and bathrooms and new boilers.
Councillor Siegel - asked how about the other apartments.
Ms. Daly - stated upon turnover we upgrade
Michael Kane of the Mass. Alliance of Tenants - Over the years we saved apartments. The city has done a good job keeping affordable housing for 99 years. We have been working for years to save and preserve housing. He stated he is in support of the Pope Street Salem Heights.
Councillor McCarthy – stated that no one is against affordable housing, 1% cash value, no one knows what that value will be in 15 years or 40 years.
Attorney Bockman – stated she understands the fact is value and it’s based in rental income.
Planning Board Member – reading the application question 6A – can this be negotiated at a later date?
Attorney Bockman – this is in agreement now not later. This was a mechanism for certainty to have a fixed number. 6A is used to give you the cash value.
Deborah Jackson Assessor – Pequot Highlands doesn’t want to be a 121A. Their income and expenses equal to income which we are negotiating. Salem Heights is 250,000 and in 2014 will be 277,000
Councillor Siegel – do we have a figure as to what this city cost for say schools etc?
Ms. Jackson Assessor – responded she didn’t know
Tim Ready planning board member – question for Assessor Deb Jackson, a lot of big numbers, before the Planning Board deliberates can you tell us if you are in support?
Ms. Jackson Assessor - stated yes.
Councillor Siegel moved that the Hearing be closed. It was so voted.
Councillor Siegel moved the matter be referred to the Planning Board for their recommendation. It was so voted.
APPROVAL OF CHAPTER 121A DESIGNATION FOR
LORING TOWERES SALEM PRESERVATION ASSOCIATION LIMITED PARTNERSHIP,
LOCATED AT 1000 LORING AVENUE, SALEM, MA
Lynn Duncan Planner – introduced representatives for Loring Towers
Dodge McCore Representative for Loring Towers AMICO Real Estate Investment Co. is from Denver, Colorado.
Mr. McCore – stated he has had a very good experience in Salem and want to continue affordable housing.
Mr. Jeff Saxe a representative of Loring Towers project heard a lot about 121A. We discussed the application with housing prior to submitting it to the City.
Councillor O’Keefe – stated that Loring Towers Cooperative is in Ward 7, his ward.
Michael Kane – member of the Loring Towers tenant association is not in agreement with the 121A. They have negotiated improvements. A number of tenants paid rent increases. Some tenants were relocated. A negotiated agreement with the city of Salem and AMICO 40 tenants paid 30% of their income. The financial incentive was to move out. There were 80 vacancies which put the building in financial turmoil. If AMICO had cooperated the tenants could have stayed and paid less. City agreement permits AMICO to apply to state 8 project based vouchers. HUD implement AMICO legally bound to apply for maximum number of vouchers for low income tenants and would preserve housing. You should condition any approval with AMICO to be in compliance with the agreement. We will work with them.
Councillor Legault what are the maximum number of vouchers
Michael Kane stated there are 85 left
Councillor O’Keefe asked do you want this agreement ammortalized into 121A?
Mr. Kane stated get something specific or hold it up. Until you get a commitment from them.
Councillor Turiel for clarification we can only refer the matter to the Planning Board for their recommendation.
Councillor Sargent Once we close the public hearing the clock starts.
Attorney Jeff Saxe – we appreciate what’s been said we are not opposed we did seek additional vouchers. We can only apply but it is a scarce resource. We can work out the language tomorrow.
Tim Ready – will you have something for the Planning Board tomorrow?
Mr. Saxe stated yes.
Councillor O’Keefe stated hold off and work with the Solicitor about this agreement.
Lynn Duncan Planner – stated there is the timetable
Mary Dennison resident of Salem Heights – stated she had to move from Loring Towers she couldn’t afford to stay.
David Gerard resident of Loring Towers – stated he is 52 years old and is on disability. He has received notification of rent due on the 6th that notice of beginning of eviction. His disability doesn’t come until the 1st of the month. He needs assistance voucher.
Kathleen Burke 205 Bridge St. – stated she is tired of landlords and companies. When they make an agreement they don’t follow through, please don’t allow the 121A to go through unless things are worked out.
Councillor McCarthy – What does it take to get a voucher? What is the process?
Attorney Saxe – Can mean different thing, different sources Dept. of Housing, Salem Housing, HUD- Federal or DCHD
Mr. Kane stated he did approach the Salem Housing Authority but it didn’t pan out.
Deborah Jackson Assessor – clarified what taxes would be and that they are the same
Councillor Sargent stated that we bargain in good faith
Councillor O’Keefe asked do we have Attorney Saxe’s commitment to work with Mr. Kane?
Attorney Saxe stated we want to comply.
Mr. Ready Planning Board Member read a letter into the record from Eleanor Lynn.
Councillor O’Keefe moved that the hearing be closed. It was so voted.
Councillor O’Keefe moved that the matter be referred to the Planning Board for their recommendation. It was so voted.
On the motion of Councillor O’Keefe the meeting was adjourned at 9:10 P.M.
ATTEST: CHERYL A. LAPOINTE
CITY CLERK
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