Great Barrington — The second of two proposals to redevelop the former Housatonic School was reviewed at the Select Board’s meeting on Monday, November 7. The elementary school building, located at 207 Pleasant St. in Housatonic, was built in 1907 and has been vacant since it was shut down in 2003.
The first of the two proposals, submitted by Arete Venture Partners LLC, was reviewed at the Select Board meeting on October 24.
The Nanuet, N.Y. company plans on building 14 residential apartments on the second and third floors of the building, including four 650-square-foot studio apartments that will be set at affordable housing rates. Additionally, the company intends on installing 5,500 square feet of open concept-commercial space.
Meanwhile, WDM Properties of North Adams and Pittsfield wants to turn the building into a 10-unit apartment complex, with rents set at $1,765 a month. At the November 7 meeting, company project manager David Carver told the Select Board that each apartment would be 1,200 square feet and include two bedrooms, a kitchen, and a washer and dryer.
“Our proposal involves creating 10 two-bedroom apartments and addresses the strong need in Berkshire County for quality market-rate housing,” Carver told the Select Board. “Over the past 50 years, the production rate of rental housing has lagged far behind and production of deep subsidy low-income housing as regulated by the federal government. This housing is generally defined by [the Department of Housing and Urban Development] as serving households with incomes below 50 percent of the area median income. We are proposing in this project to serve residential household incomes of up to but no higher than 100 percent of the median household income. This cap is offered due to the inclusion of town funds, the development budget, and the need to reserve the units for this target market.”
Carver said that the rent for the apartment units will be capped at no higher than 30 percent of the area’s median household income, including utilities. He said that HUD reports that the area median household income is $92,100, which he said would yield a maximum monthly rent of $2,300, which includes utilities. “However, to remain competitive in the rental market, and best serve the target market, we are proposing initial rents of $1,765, including heat,” Carver said. “The tenants would pay for their own electric and air conditioning which is estimated at $125 per month, for a total housing cost of $1,890 per month.”
The company is proposing to create 20 parking spaces all around the building, which is two parking spaces per apartment unit. The company’s parking proposal includes one handicapped-accessible parking unit.
Selectboard member Garfield Reed questioned Carver on whether or not any of the apartment units would be handicapped accessible. “Because there are only 10 units, it’s not required and we’re not providing that,” Carver said. “If there were 12 units or more, all of the common spaces [on each floor] would need to be handicapped accessible. If there were 20 units or more, at least one out of each 25 percent needs to be accessible. The [units] will all be a good size, but the accessibility is limited by the access to the building.”
Carver estimates that the total budget for the project would be $3,500,000. “Reusing this building will require the use of historic tax credits and the grant offered by the town in the request for proposals, in conjunction with private bank financing and developer equity,” Carver said.
To fund part of the project, the company received a proposal from Senior Vice President of Berkshire Bank D. Matthew Emprimo for a multiple advance commercial real estate mortgage loan for up to $1,500,000 for a term of 10 years.
Emprimo added in the proposal that “Berkshire Bank also has a strong interest in being the $1 million tax credit investor on this project. The tax credit price negotiation and underwriting would occur during the bank’s loan due diligence process.”
Vice Chairman Leigh Davis asked Carver about how much the company planned to apply for in historic tax credits and what the timeline for applying for the credits looks like. “That’s probably the most difficult part of putting the financials together,” Carver said. “Typically it takes so long to do that. We have found out from our consultant that projects that are ready to go and that meet the criteria move much, much faster. That’s going to be critical in this project.”
Carver said that the company could get anywhere from 20 to 25 percent of the total project cost in historic tax credits and that it would need to raise approximately $1 million from credit sources. “Are you pretty confident that you’ll be receiving these tax credits?” Vice Chairman Davis asked Carver. “And if for some reason you don’t receive them, how’s that going to work into your overall budget?”
“Admittedly, this would be a problem,” Carver said. “If the financing doesn’t come through either from our local bank or the tax credits, yes, the project is put into jeopardy.”
Vice Chairman Davis asked if the company would come back to the town to make up any shortfalls in funding the project if it does not receive historic tax credits.
“I’m not sure how realistic that is,” Carver said. “I would be very uncomfortable going to the town unless it had the pot of money to do that. I would personally feel uncomfortable asking for that.”
The Select Board is scheduled to discuss the two proposed projects at its next regular meeting on Monday, November 21 at 6 p.m.
Find WDM Properties’ proposal to redevelop the former Housatonic School here.
