ࡱ> vxu{ ldbjbjzz 8[^^^^^rrr8f4r*"j4rrr!!!!!!!$#F&!^^!^^F!v^^!!{l[!!0*"$'~$'$'^r>,$rrr!!;rrr*"$'rrrrrrrrr $: City of Salem Joint City Council and Planning Board Public Hearing DRAFT Meeting Minutes Thursday, May 15, 2013 A special meeting of the Salem Planning Board was held on Wednesday, May 15, 2013 at 7:00 p.m. in City Hall Chambers, Second Floor, at 95 Washington Street, Salem, Massachusetts. Those present were: Tim Ready (Vice Chair), George McCabe, Dale Yale, and Helen Sides. Also present: Lynn Duncan, Director of Planning and Community Development and Beth Gerard, Planning Board Recording Clerk. Absent: Chairman Chuck Puleo and Mark George. City Council President Jerry Ryan opened the meeting at 7:06 pm. Acknowledged Tim Ready, Vice Chair, who introduced the Planning Board. Approval of Chapter 121A designation for Salem Heights Preservation Associates, Limited Partnership, located at 12 Pope Street, Salem, MA Council President Jerry Ryan turned the floor over to Lynn Duncan, Director of Planning and Community Development to review the agenda items with members of the City Council and the Planning Board. Lynn Duncan, Director of Planning and Community Development, explained that 40 years ago Salem Heights received the 121A designation and because it is up for renewal is why they are here tonight. She stated that once the City Council votes to move the decision to the Planning Board, the Planning Board will review and make a decision at the next meeting. In rendering a decision, the Planning Board will make certain findings and decision that will be reported back to the City Council before their next meeting. She thanked the City Clerk for scheduling this meeting of both the Planning Board and City Council. Atty. Katharine Bachman, representing Salem Heights Preservation Associates, LP, described the location of the property and the type of project, as well as reviewed the application. They are before the City Council this evening to seek a renewal of the Chapter 121A status, where they will continue to be required to pay taxes under Chapter 121A. She explained that the project was developed, in spite of being a hard to develop site, in 1974, under the program formally known as 236 which was enacted to create affordable housing. She noted that there are challenges at the location to this day. The original owners sought to sell property in 1990s, where at that time the property was conveyed to current owner Preserve Affordable Housing and was part of agreement to provide affordable housing for 100 years. Over the past ten years they have tackled many challenges like energy improvements and upgrades, structural maintenance, and sought and obtained grants for the project. Their continued goal is to make it a safe and affordable place to live and to have a good future. They are challenged by affordable housing restrictions, such as how does one balance unexpected cost increases with an income that is capped. She pointed out that the property pays taxes to the community as part of the state formula for 121A. They have worked closely with city and noted that their taxes are what average taxes are. Councilors Siegel and OKeefe joined the meeting. Councilor McCarthy asked about the reason for the extension. Atty. Bachman explained that for affordable housing, the ability to finance is constrained by capital gains. Councilor McCarthy then asked about the agreed on value, to which Atty. Bachman said the Assessor can respond with further detail. Councilor McCarthy asked a follow-up question about the gross income and revenue. Atty. Bachman responded that it is 5% of the gross income of the resident. Kirt Rieder asked about the staircase in relation to the process of investing, specifically how the staircase could be brought into compliance. He noted that this may be the only opportunity to provide residents easy access to Splaine Park and this may be the right time to do this if they have the ability to invest in it. Atty. Bachman stated that it is a difficult situation, as the staircase is closed off due to extreme slope of the site and in order to be compliant with the Americans with Disability Act they would need a series of ramps and to have that length of infrastructure for a affordable housing project is a huge monetary challenge. Mr. Rieder stated that as a landscape architect he understands the constraints, but feels that it is difficult to bypass this opportunity. Atty. Bachman responded that they did look at it and a lot of it is city owned, and there are liability issues, plus the property owners would have to pay taxes. It is a very steep drop and a wooded area plus it is not easy to police. She concluded stating that she understands why he raises it, but it is separate from the subject matter of this evenings application. Councilor OKeefe asked if the petition has been reviewed as the wording is not proper for Loring Avenue, even though this is Salem Heights and this should be amended. Atty. Bachman responded that everything can be reviewed and if something can be fixed they will fix it. Debby Jackson, Assessor, stated that the wording on the application may be a little confusing and read from the document. Councilor OKeefe stated that the proper documents werent presented. Atty. Bachman stated that the application reflects the 40 year status of 121A which expired in March of 2013. They have a new application and they acknowledged the expiration, which is why they are coming here as a new project, per state laws. Charlie Speliotis, 20 America Way, read about both applications and is confused by both. They both expired and if they are expired then they have to show, according to the law, an open, blighted and decadent, need for the city, for a stabilized taxability to be economical. He stated that he was the advisor to the Boston Redevelopment Authority and discussed his previous experience with Chapter 121A applications and projects. He has no problems with the sites and supports affordable housing. Usually at the end of a 40 year period, usually they go back on the tax rule and they can get subsidies. Atty. Bachman said that she holds him in the highest regard, and has previous experience with him. As a real estate expert they cannot anticipate everything that is going to happen. The original owner of Salem Heights said they were all set and this would go back to private housing when the City of Salem fought to keep it private. She went on to speak of housing cycles and changes to the housing market, where housing is seen as a community asset. The theme of the application is that this is a project to prevent blight and the goal is to keep it safe affordable and decent. Councilor Legault asked about the 100 year designation. Atty. Bachman explained the guidelines of the program and where the funding comes from to which Councilor Legault asked if this is new ground that is breaking. Atty. Bachman explained that it was first used for Prudential Center, and talked about Great Society programs in Massachusetts, concluding that this is the way they were written because 40 years seemed long. Councilor Legault asked if there are any other housing developments like this to which Atty. Bachman this would be the first. She noted that there is no prohibition to go forward, they just need the approval this evening. She concluded by stating that the application first went to the state. Councilor Turiel asked why the 15 & 25 year restrictions expired. In terms of if the application could have been submitted as an extension rather than a new application to which Atty. Bachman responded that this was exactly what she thought, specifically no statutory equipment and no prohibition. Councilor Siegel stated that he is concerned about breaking ground, and asked if approving this would open the City up to potential lawsuits. Atty. Bachman responded no. Councilor Siegel stated that his concern was that this doesnt follow the statute, as its not blighted and whether doing something could cause future law suits for the City. Atty. Bachman stated that she is a real estate lawyer, and she doesnt want this to get into court. This is what they have to work with. She further stated that what they are asking for is the ability to have a baseline for taxes. They have new circumstances with the statue that is designed to take hard geographies to make ends meet. Mr. Speliotis stated that as the housing director of BRA he thinks this is a perplexing problem as renewal is not in statute. He had previously gone to the legislature to request legislation that would include renewal in the statute, but it did not go anywhere. He concluded stating that he is all for affordable housing, but he is not sure if a Chapter 121A status is appropriate for projects that are already built. Councilor Turiel stated that he can see the concern in Salem being the test case, but asked who would have standing to challenge this, who would be harmed. Atty. Bachman concurs. Mr. Anderson asked how these major improvements to the facility would benefit a tenant. Atty. Bachman stated that a lot has gone into dealing with the energy issues and there are continued investments. Alexandra Dailey Preservation of Affordable Housing, 40 Court Street Boston, stated that the issue is of deterioration. They have already done major work at the property and added a cogeneration plan, as well as secured additional funding to put in new windows. Recently, they put up a solar panel on the south side of the building. The code dictates that air has to circulate through the building, so they secured a grant through TD Banknorth to help meet that code requirement. She stated that this is a large physical plant, where the average annual costs are $250,000 per year, and with the pipe replacements, it will exceed $330,000. Yet they are constrained due to the income and rent restrictions through program. They have spent the last ten years soliciting grants to make improvements to the property to help control the cost. She explained that the organization buys older properties and they find financing to rehabilitate the properties into good shape. It is not a gut rehab, but a moderate rehab, which is why they pay $250k per year. Councilor Siegel asked if the insides of the property has been rehabilitated, to which Ms. Dailey responded yes, specifically stating that they have completed upgrades to some kitchens, baths, hallways, a new air handler, and new boilers. Councilor Siegel asked about the repair schedule to which Ms. Dailey said they were done during turnover replacements, which happens routinely and is part of the $250,000 annual costs. Michael Kane, stated he was the one originally who worked to find the restriction to save building and to keep the tax rate low. He said that Salem Heights is an example that should be preserved and the other precedent is in Boston where their affordable housing helps the city. Councilor OKeefe asked Mr. Kane if he supports Salem Heights to which he responded in the affirmative. Councilor Furey stated that when he was growing up he and his family lived in Salem Heights and he feels that affordable housing is critical to any city. Without Salem Heights, he would not be here, thus he supports this. Councilor McCarthy stated that he supports affordable housing, but asked what the cash values of the property will be, based on how the restrictions written. He gave a scenario where the state keeps the rents at one rate, while the property taxes continue to rise, and asked how the city would afford something like that. Atty. Bachman stated that the truth of the matter is that the assessor will only assess it at what the rents it can get for the property; so while its a beautiful property, its not worth that much because it is valued by rental income. Mr. Anderson asked a question about taxation and read form section 6a. of the code. He then asked if the rates are required to be negotiated now or at a later date, to which Atty. Bachman stated that these rate would be negotiated going forward. Mr. Anderson clarified if it would have to be decided now to which Atty. Bachman said that this is the mechanism they use for income certainty. Ms. Jackson stated that she is currently negotiating another property that does not want to continue as 121A, where their expenses are about equal to income, and the values are less than what is proposed. Mr. Anderson asked what is it now for Salem Heights, to which Ms. Jackson said they are higher. Councilor Siegel asked for a figure on how much this building costs the city to which Ms. Jackson responded that she does not have it and not sure how she would calculate that. Tim Ready stated that he wants a conservative opinion, and asked Ms. Jackson if this is a good thing for the city, to which Ms. Jackson responded in the affirmative. Councilor Siegel moved to close hearing and moved that hearing be moved to the Planning Board for their recommendation. One opposition. Approval of Chapter 121A designation for Loring Towers Salem Preservation Association Limited Partnership, located at 1000 Loring Avenue, Salem, MA Lynn Duncan, Director of Community Development and Planning, introduced people to speak on Loring Towers. Dodge McCourt, from AIMCO real estate investment trust in Denver, CO, stated that they have several properties in the Boston area and in Salem and they want to stay here. They are requesting the Chapter 121A to continue providing affordable housing. Atty. Jeff Sacks, representing applicant, added that they have discussed the application with the Department of Housing, and they are seeking stability and certainty to maintain affordability of project. Councilor OKeefe stated that they have been very cooperative but he is concerned about the agreement. Michael Caine, from the Loring Towers Tenant Association, stated that the problem with AIMCO is its noncompliance with the Citys affordable housing requirements. He explained the history of the building along with AIMCOs involvement and issues that have arisen since their ownership of the building. He pointed out that a number of the tenants who paid rent have seen their rent increasing when AIMCO could have helped tenants get enhanced Section 8 vouchers to cover the increases; this would have helped the owners as well as the tenants to maximize the long-term affordability of the project. He explained that project-based vouchers assist in maintaining affordability and without the enhanced vouchers, they have seen an exodus of 80 vacancies, which then caused mortgage concerns. He said that the bottom line was that AIMCO didnt follow covenant they had with the city to provide affordable housing and he read from the covenant, specifically citing where it states that the purchaser will make all efforts to get project-based vouchers. He pointed out that due to the Merkley-Brown amendment, which allows for a provision of up to 60,000 affordable housing units, AIMCO could apply for enhanced vouchers. They believe AIMCO is legally bound to apply for the maximum vouchers, which would permanently preserve affordable housing at a deeper level of housing for 50 years. They have urged AIMCO to do the right thing and AIMCO has done absolutely nothing. They are convinced that unless the city forces AIMCO to do this as a condition of the 121A, then they will not do this. If they did this it would be beneficial to the town, better for the tenants, and make AIMCO look good and they need the support of the Planning Board and the City Council to make this happen. Councilor Legault asked what would be the maximum number of enhanced vouchers needed to which Mr. Caine responded that thee are a maximum 85 are left and there are a number of tenants who are paying over 30% of income, who would be willing to convert to an enhanced Section 8 voucher. Councilor OKeefe asked Mr. Caine how he wants them to handle this. Mr. Caine said that this is a big company based in Denver, and he recommended that they get some firm commitment from the company before giving them a break. He had hoped that they would make a commitment tonight to do this as they are very difficult to deal with. He concluded by recommending that they do not vote on this tonight and get the Planning Board to discuss it at their next meeting. Councilor Turiel reminded the City Council members that the only outcome of this hearing is for this process to go to the Planning Board who can address some of these matters. Councilor Sargent asked about the time frame after public hearing closes, and suggested keeping this topic open. Mr. Dodge responded that AIMCO is not opposed to having project based voucher, and they will move forward with the application, though they are very difficult to get and are a scarce resource. He suggested that they could work out a schedule and they will move forward with that. Mr. Ready asked Mr. Caine if he could have something for the Planning Board in writing for their next meeting tomorrow to which Mr. Caine stated that he would be tied up with a rally tomorrow. But he said that there are administrative things that could be done, such as obtaining vouchers through CTI. He said that there is a specific request for an internal waiting list and separate agreement through 8 units, and they should get them converted. Mr. Dodge stated that they are prepared to move forward on voucher-based details, but cant make commitments on those. Councilor OKeefe recommended not jumping on this so quickly and asking the city solicitor to comment on this issue. He questioned why they are here now if this expired in March. He wants to see this worked out and recommended adding language to the agreement that reflects that this will be taken care of. He concluded stating that there are poor people in the building that he is looking out for them. Ms. Duncan addressed the question on timeliness as she thinks people are confusing this with zoning requirements. She thinks that thee is no time constraint. Council President Jerry Ryan read from ordinance and Mr. Dodge said they can work with this. Randy Clarke left at approximately 8:45pm. Mary Dennison, 12 Pope Street, stated that they did away with 236s, enhanced vouchers, so now some residents are paying 90% of their income towards rent. She is concerned that AIMCO is making promises they dont follow-through with and urged the City Council to keep the public hearing open. OKeefe reviewed documents and questioned changes in documents. Ms. Duncan stated that if they are incorrect, then they will work to fix the issues. Rayna Jezzini, 1000 Loring Avenue, stated that she is concerned about people who are paying of 90% of income, as these are people who desperately need project-based vouchers. She described other problems at Loring Towers including ongoing issues with the elevators, as well as needing new washers and dryers, and because of these ongoing issues, she questions where $5 million in renovations went. She described a situation where the playground was shrunk for dog park and now there is no where for children to play. She also expressed concern for the high turnover rate for security and maintenance people. They need a lot of work done at Loring Towers, and she doesnt think a lot of people are happy with how it is run. She stressed that a lot of people need the project based voucher. Councilor OKeefe acknowledged that in most instances theyve been cooperative when speaking with the councilor, except for the elevators. He asked for patience on this issue. David Gerard, Loring Towers, stated that he is a 52 year old man on disability and recently received a notice to quit, which he finds a frustrating and intimidating tactic. When he first moved in, he received a limited voucher. Prior to the funding running out he went to Loring Towers to ask for assistance and was told that they could do nothing. He asked if he could be on an internal waiting list, and he was informed it didnt exist. He is here today to put a face on this. It is very difficult for him to do afford his rent without a project-based voucher, and while he is looking to move due to the rent burden, he would prefer to remain where he is. However, it is not possible to continue living there without assistance. He pointed out that they are slow to provide assistance to tenants with a rent burden and he would like to have legal statements from AIMCO to fulfill this need. He described his situation of having only $200 left over to pay for food and necessities after rent is leaving him barely afloat. He recommended that they should be giving a break to tenants if they are getting a break. Kathleen Burke, 205 Bridge Street, stated that she just finished a term of Salem Public Tenants, Mass Alliance of tenants, and she is tired of hearing landlords and companies saying that they need tax breaks. They spent a long time hashing this agreement out, and where the agreement is not being honored, she wants the Council and the Planning Board not to do anything until these things are worked out. When they made an agreement for people who left Loring Towers that they were going to get help, some were honored and some were not. They had been working with Jason Silva and they didnt know that he left. People need help and everyone wants their piece. She described this as low income housing not affordable housing. She asks the Council to not do anything until AIMCO steps up to the plate. Councilor McCarthy asked what it takes to get a project-based voucher to which Atty. Sacks responded stating that the Salem Housing Authority and the Department of Housing both have vouchers that they can make project based vouchers. They are prepared to go forward into the program to get more vouchers. Mr. Caine stated that he approached the Salem Housing Authority for many years about the vouchers and they said if AIMCO would ask for it they would give them. He described the rental assistance demonstration as a major initiative as a retroactive conversion for residents needing rental assistance as the statute was written so that you could go back. He emphasized that this building is eligible to apply for these vouchers. He stated that the Office of Multi-family Dwellings wants people to come in for applications and there have not been many and he has been informed that if AIMCO came in they would get them. Ms. Jackson reviewed the amounts of taxes received from Loring Towers, and prospective amounts. She stated that the tax dollars are approximately the same, meaning that the amounts are equal to what they would pay, it is income related. Councilor Sargent asked for a bargain on good faith and pointed out that an approval of one thing that was supposed to help them that didnt help. He is also concerned about them having to foreclose due to the constraints of 121A. Councilor OKeefe asked if the Planning Board and City Council have your commitment to work with the people to help resolve this matter, as he wants this addressed. Mr. Sacks responded that they want to work with this and all the interested parties. Beth Gerard, Planning Board Recording Clerk, read into record a letter from Eleanor M. Lynn, 18-2 Americas Way. OKeefe moved to close the public hearing and matter moved to Planning Board. All approved. Adjourned at 9:11pm Respectfully submitted, Beth Gerard, Recording Clerk      City of Salem Planning Board Joint Public Hearing Meeting Minutes May 15, 2013 Page  PAGE 7 of  NUMPAGES 7  PAGE   04CDYdpqr$ & 9 D E O P _ a l  % ? 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