West Stockbridge — The Select Board is under fire from The Residences on Mill Pond LLC following a May 8 decision by the group—sitting as the West Stockbridge Rent Control Board—to increase the monthly rent for tenants of the mobile-home park by $1.44, a far cry from the triple increase petitioned by the property’s owner in November. That uptick would have taken the monthly fee from $241 to $797.51.
In its May 24 appeal from the decision, attorney Robert Kraus, Kraus & Hummel LLP, on behalf of the park and its owner Tom Lennon, alleged that the Rent Control Board incorrectly valued the park and the amount of land on its tract and didn’t appropriately consider the investment made by Lennon in the project or the expenses Lennon incurred for the project’s benefit. Additionally, the document alleges the park’s “fair net operating income” wasn’t calculated correctly, with all those issues provided as support for a court to render the board’s decision void and validate the large rent increase initially requested by Lennon.
At the May hearing, town counsel Tim Zessin proposed a formula to determine the maximum allowable rent for park tenants: multiplying the fair-market value of the park by an annual rate of return and adding in reasonable annual expenses before dividing that tally by the 35 units in the community and again by 12 months in a year.
Following three contentious hearings, the Rent Control Board determined the fair market value of the project to be $178,800 per the town’s assessed value, denying the $1.78 million proposed by Lennon according to a professional appraisal he produced. That town value didn’t include a $700,000 assessment for the site’s outbuildings since those facilities weren’t available to tenants. At 8.5 percent, the annual rate of return wasn’t contested. However, the board denied numerous proposed expenses cited by Lennon: $13,800 for a dumpster rental, $18,728 for property management, $10,000 for park reserves and all capital expenditures, including the repair of the community’s water system. The group also decreased landscaping and snow-removal charges as well as legal/professional expenses proposed by Lennon. Those changes resulted in the board’s final accounting of $86,628 for operating expenses.
The appeal states this decision “adversely affects the substantial rights” of Lennon, “is unsupportable,” and is contradictory to town regulations. “The Board clearly failed to apply its own bylaws in deciding that at least the minimum rent of $325 was appropriate for the Park,” the pleading provides, adding that that measure alone would make the decision unenforceable.
The case was not only brought against the town but included as defendants individual board members Kathleen Keresey (who was the group’s chair at the time of the decision), Andrew Potter, and Andrew Krouss. The board has until August 22 to respond to the allegations.
In a June 13 email response to The Berkshire Edge’s request for comment, Potter, as the board’s current chair, stated the “Town of West Stockbridge would like to assure the public that we stand by the integrity of our process.”
“Although the Town has not yet been formally served with the complaint, we are confident in the process, procedure and outcome of the Rent Control Board’s decision,” he stated. “This decision faithfully followed the West Stockbridge Rent Control By-law, ensuring fairness and due consideration for all parties.”
Potter stated West Stockbridge will be represented in the matter by town counsel and is prepared to defend the May 8 decision. “We remain committed to upholding the principles of our Rent Control By-law and serving the best interests of our community,” he stated.
The West Stockbridge Select Board June 10 Special Executive Session Meeting included a strategy discussion relevant to the appeal.
