Great Barrington — The 100 Bridge Street affordable housing development is one step closer to becoming a reality after the developer received final approval from the state for a plan to clean up the property.
But the project also received a setback when the administration of Gov. Charlie Baker did not include it on its list of immediate funding priorities.
“It’s a very tough and competitive situation for Low Income Housing Tax Credit Projects right now — a situation exacerbated by the uncertainty that has been created at the national level,” Tim Geller, executive director of the Community Development Corporation of South Berkshire, told The Edge. “It’s not a matter of whether or not Bentley Apartments will be funded; it’s just a matter of when.”
CDC had asked for $12 million in federal and state low-income housing tax credits (LIHTC) and $3.3 million in what Geller called additional “soft debt” from multiple state sources, to fund construction of the rental units and a portion of the remediation costs.
LIHTCs are a popular form of funding for affordable housing. Since affordable housing presents an especially low rate of return for investors, Congress created the LIHTC program as part of the Tax Reform Act of 1986 to promote the construction and rehabilitation of housing for low-income families and individuals.
The tax credit enables developers to attract capital for the construction or acquisition and substantial rehabilitation of housing for low-income persons. Under the federal income tax code, investors in low-income rental housing are permitted to take a credit against taxes owed the federal government. In Massachusetts, the state Department of Housing and Community Development (DHCD) is the allocating agency for those tax credits.
According to the DHCD, this has been exceptionally challenging year thus far for many LIHTC developers. During the first six months of the year, many tax credit investors reduced equity prices and adjusted terms in response to uncertainty over federal tax reform, with potential impacts on corporate tax rates, depreciation schedules, and other factors that could affect investor interest in the credit. This has caused additional uncertainty and funding gaps.
But there has also been good news. Earlier this year, CDC, which is the nonprofit owner of the polluted site, was notified by the state Department of Environmental Protection that its Phase IV Remedial Implementation Plan (RIP) had at long last received final approval from regulators, though the approval did allow for additional public comments..
Then in March, the Berkshire Regional Planning Commission awarded CDC a Berkshire Brownfield Revolving Loan Fund Grant of $123,0000, thereby completing the funds necessary for the cleanup of the property, the site of the former New England Log Homes factory, where 45 new affordable rental units, to be called Bentley Apartments, will be built.
“This is excellent news. It demonstrably shows the redevelopment of 100 Bridge moving forward while, at the same time, allows for robust public involvement in the process,” said Geller.
Geller said the state environmental approval and the grant “definitively advances all aspects of the project, and allows us to submit critical funding applications that support this important affordable housing project.” This news, Geller added, also “helps us advance conversations we are having with potential co-developers.” More on that later.
For much of its permitting process, the project has been mired in controversy. CDC received the go-ahead from the Zoning Board of Appeals last year to build 45 affordable housing units that would be sited on two acres at the southern end of the property on the banks of the Housatonic River and next to the town sewage treatment plant. Eventually, the $40-million project is expected to add a mix of market-rate residential units and retail space.
The project also received the endorsement of the Select Board. The comprehensive permit was issued under Chapter 40b, a state law that streamlines the process and waives some of the requirements for the construction of affordable housing.
The New England Log Homes factory used chemicals to treat wood for log cabins and homes at the site. The company closed in 1994 and what was left of the factory burned in a fire in 2001.
The CDC purchased the property in 2007 and the charred factory ruins were demolished some four years later. The property had been used for industrial purposes even before New England Log Homes started its operations there.
For at least a decade, the CDC has tried to redevelop the 8-acre parcel, designated by the state as a brownfield, soon after obtaining ownership of the site that sits in a residential section of Great Barrington near downtown, bordered by the Housatonic River on one side, the town’s sewer plant on another, and homes on the other two.
In 2014, CDC began to remediate the site using a process known as bioremediation but the DEP put a stop-work order on the operation after neighbors complained about the odor during a summer of heavy rains. Eventually the department shut down the process down altogether, leaving the CDC to come up with another strategy to deal with the PCPs and dioxins left by New England Log Homes.
Of the failure of the bioremediation, Geller said, “No one is more disappointed than I.”
Geller and his board have had to battle the perception that the affordable housing portion of the project, tucked into the southern end of the property next to the sewer plant, would “ghettoize” lower-income renters. And there were complaints that the units were too tall and out of character for the neighborhood, so the three buildings were reduced from four stories to three.
Initially, CDC had proposed to remediate the site piecemeal, cleaning up portions of the property as they were being built out. But the CDC ultimately changed its strategy after being granted the comprehensive permit last year by the ZBA. The DEP finally approved the remediation plan after CDC agreed to clean up the entire site at once. Geller said the budget for the clean-up is approximately $1.4 million — with most of it spent on heavy equipment and excavation. Disposal of the contaminated soil off-site, he said, “would be prohibitively expensive,” so the DEP approved a capping strategy.
The RIP describes in detail how the polluted Bridge Street site will be cleaned up — both by removing contamination from parts of the site, and capping other portions of the site. This solution, Geller explained, “reduces the human exposure to contaminates on the site to zero, while still allows for the full redevelopment of the site.” The future portion of the site for the 45 new affordable rental units will be cleaned up to residential standards with no restrictions.
And there is another cause for concern on the property and downstream from it. A portion of the site, on which the log homes company housed its dip tanks, sits within the town of Sheffield’s Zone II public water supply. Zone II is the part of an aquifer that acts as a recharge for a well that is pumping lots of water, such as that for a main water supply. In other words, it is an indirect source of drinking water for Sheffield.
According to testing conducted by CDC’s own licensed site professional, Ransom Environmental Consultants Inc. of Byfield, that groundwater plume appears to be under control. One of Ransom’s reports, after extensive testing, said the groundwater situation held “no significant risk exists, although [the] site is mapped within the Zone II of the public water supply for the Town of Sheffield.”
According to the DEP, there are currently no known methods of remediating groundwater contaminated with PCPs. Still, Geller insists that there are not threats from the plume to the Sheffield water supply, in part because the contamination would have to migrate such a long distance — “miles away.”
“Ransom has said the probability of that ever happening is infinitesimal,” Geller said. “Previous testing has found it to be limited in scope … We’re going to repeat those tests … All of their science is reviewed by DEP.”
As for the failure — perhaps only temporary — of the project to receive funding from the state in the form of LIHTCs, all is not lost. According to Samantha Kaufman, deputy director of communications for the Department of Housing and Economic Development, it is not unusual for the department to decline to provide funding projects on the first try. She declined to comment on the specifics of the CDC’s application but encouraged another attempt.
“Every year there’s a lot of deserving projects but only so much in the way of funding to go around,” Kaufman said. “We encourage applicants to re-submit their applications.”
Geller said the next round of regularly scheduled funding will be announced in February 2018 but there will also be a DHCD “mini-competition” in October, with awards to be made before the end of the year. Geller said CDC intends to compete strongly in both rounds.
If CDC had received funding this month, construction on the affordable housing units could have started in the spring 2018. If funding is received next year, then the spring of 2019. The buildout is expected to take between 12 and 15 months from start to finish.
As for interest from other potential tenants to fill out the site, CDC has been searching for awhile. The Berkshire Co-op was in serious talks with CDC to become the anchor retailer for 100 Bridge Street but those talks stalled. Meanwhile, last year the Co-op signed a long-term lease for the new 34 and 42 Bridge Street complex, only a stone’s throw from Main Street.
Benchmark Development plans to build a three-story building that will house the new 14,500 square-foot Co-op, along with 33,900 square feet of retail space, 6,500 square feet of office space and 22 condo units. The old Co-op building will be demolished as part of the $15 million project.
Geller did say CDC has been in talks with various entities about locating at 100 Bridge Street, but “the most tangible interest from a potential anchor in the site “is currently for some kind of continuing care or assisted living facility.”
“This would be a perfect location for that,” said Geller, who declined to be more specific because of the implied confidentiality of the discussions. “We’re talking to more than one entity.”