Nehemiah digs in

The performance hall at the Green Street Arts Center was packed with dignitaries for Monday's groundbreaking ceremony for the North End Home Ownership project. After remarks by no less than 15 politicians and stakeholders in the project, the crowd moved outside for a golden shovel ceremony. The developers, Nehemiah Housing and Broad Park Development Corp, note that actual construction is slated to begin in late summer, with the first of the 15 units available by October 2010.

Readers of the Eye have been treated to many, many articles about the long process of finding funding and getting approval from the Redevelopment Agency and Common Council for the home-ownership condos. Compromises between the developers and the preservation community led to the decision to rehabilitate three of the Ferry houses that were originally to be demolished. The January 2008 move of the former Methodist Church on Liberty Street to a new site on Rapallo Avenue added further complexity to the project, resulting in a plan to create 4 units in the renovated building. The difficulties of the current economy and real estate market required the developers to trim the original 7 sites to 6 -- the Habitat for Humanity duplex on Ferry Street will have to wait.

Although there are a number of funding sources (including some $700,000+ from the City), the project ultimately received its green light with the recent agreement by the state's Department of Economic and Community Development to provide $3 million in grants to fill the gap in the approx. $7 million budget. In exchange, the developers are required to sell the homes at below-market prices to households within targeted income categories -- most are for families with up to 80% of median income, and two units are reserved for families with up to 50% of median income.

In this architectural rendering you can see:
1 Top right corner: two new duplexes will replace two houses on the south side of Green Street which are currently vacant and condemned. These units are priced at $124,000 to $148,000.
2. Top left corner: the planned facade of the former Methodist Church. This elevation will face Rapallo Avenue, and the building will house four units which are priced at $93,970 to $124,000.
3. Bottom row: Three existing houses on the south side of Ferry will have condos priced from $138,000 to $168,000.

Many of the speakers at the groundbreaking praised the partnerships that brought this project to fruition, as well as the investments of Wesleyan University, the City and private developers in the North End. In her remarks, Jackie Clegg Dodd (wife of Senator Chris Dodd) noted the progress that Middletown has made in recent years. We now know, she said, that the North End was lucky to escape the wholesale redevelopment that other towns experienced, and the resulting construction of buildings in the "Early Ugly" style. Instead, the North End still has "good bones", and a strong base of dedicated people who care enough to work at creating a stable community.

As the final speaker, Izzi Greenberg, the executive director of NEAT and a contributor to this blog, noted that this is a very exciting step for residents of the North End -- the culmination of a neighborhood redevelopment effort that began in the late 1990's. Ever practical, she also noted that NEAT and Liberty Bank have been cooperatively offering financial literacy workshops to educate families that might be eligible to purchase the homes.

North End Home Ownership Groundbreaking This Morning

North End Homeownership, a partnership between Nehemiah Housing Corporation and the Broad Park Development Corporation will break ground on fifteen units of affordable homes this Monday, June 22^nd, at 11:00 am.

In the fall of 2006, Nehemiah Housing Corp and Broad-Park Development Corporation of Hartford agreed to implement the home-ownership component of the North End Redevelopment plan. The development will provide 17 scattered-site units for home owners. All the properties will target households whose income is below 80% Area Median Income (AMI), or approximately $60,000 for a family of four. Nehemiah has secured funding for 15 of the 17 units. The remaining two units will be developed by Middlesex Habitat for Humanity to serve households below 50% area median income.

This project is a critical piece of the North End’s continued revitalization. It is the culmination of many years of work for residents, non-profits and community stakeholder groups to improve the living conditions, safety and long-term success of Middletown’s North End. Homeownership is a critical component to stabilizing the neighborhood and has been the focus of neighborhood advocates for many years. This project is long in the making and promises to be an exciting next step.

The groundbreaking event will include:

• Jackie Clegg Dodd, representing Senator Chris Dodd
• Department of Economic and Community Development’s Commissioner: Joan McDonald
• Middletown Mayor: Sebastian Giuliano
• Middlesex Chamber of Commerce: Larry McHugh, President
• Liberty Bank: Chandler Howard, President & CEO
• Connecticut Housing Finance Authority: Diane L. Smith
• Local Initiatives Support Corporation: Lesley Higgins-Biddle
• Department of Housing and Urban Development: Julie Fagan
• State Senator: Paul Doyle
• State Representative Joseph Serra
• Nehemiah Housing Corporation: Michael Taylor
• Broad-Park Development Corporation: Raquel Rivera
• North End Action Team: Izzi Greenberg
  

The event will take place on Monday, June 22^nd at 11:00 am in the parking lot of 47 Rapallo Ave, Middletown with a rain location of the Green Street Arts Center, 51 Green Street, Middletown.

Positive funding news for North End Housing

Supporters of the long-awaited North End Home Ownership project heard some good news at Tuesday's Redevelopment Agency meeting.

The project, which has been in the planning phase for several years, will construct 17 home-ownership units on Ferry, Green and Rapallo in the North End, in a combination of new and rehab construction. The units will be targeted to first-time home buyers, and should be eligible for a number of subsidies to make the purchase affordable. The construction of the units, however, will cost considerably more than the purchase prices, and a complex network of grants, loans and city funds are filling the gap.

(If you'd like to know more about the history and financing of this project, click on the label "Nehemiah Housing" below this post, and you'll see a listing of the Eye coverage over the past year.)

Michael Taylor of Nehemiah Housing and David Berto of Broad Park Development Corp. reported that a critical grant of HOME funds from the state's Department of Economic and Community Development (DECD) has entered the final phase of review and should close within the next two or three months. Once the DECD funds are secured, they expect to finalize a construction loan from Liberty Bank. That's a big step for these developers, who struggled to assemble the financing for this deal even before the economy began to crash. One of the recent compromises in the plan was to segregate one of the properties, 25 Ferry Street, which is slated for development as a duplex by Habitat for Humanity, so that the construction on the other properties could proceed more quickly. As the project moves forward, other funding will be sought to complete that property.

If all goes as planned, there will be a ground-breaking ceremony in late June, followed by the start of construction in August.

In other business, the Redevelopment Agency considered the possibility of adding the fledgling streetcar project to their agenda. After a debate on how this project fits in with Redevelopment's responsibilities, it was agreed that the Agency should take a closer look because the streetcar might improve the connection between the North End and the rest of Main Street.

True Confessions: In case any readers of the Eye don't know, I'll confess that I am a longtime member of the Redevelopment Agency. I'm writing about meetings in which I participate and therefore can't claim a shred of journalistic detachment.

Nehemiah and Broad Park Still Short On Development Funds

The current economic climate, particularly the downward spiral of the real estate market have not been kind to plans for creating 17 units of affordable owner-occupied housing in Middletown's North End, East of Main Street.

Tuesday evening David Berto of the Broad Park Development Corporation, and Michael Taylor of Nehemiah made another presentation to the Redevelopment Commission indicating, once again, that they have not been able to obtain the necessary financial backing to proceed with construction and renovation of the housing units.

The funding plan is complex, mixing federal dollars with state, local and private money, but each loan or grant is contingent on the next. So when federal dollars are pulled back, as they were recently, or when local banks lower the percentage of finished market cost they are willing to finance, it puts the entire plan in jeopardy.

Progressing on the current path, the partnership would have to wait until a new federal application is available in June, with funding not secured until September. In another scenario, Berto explained that federal stimulus dollars might be available, and a relatively small grant of approximately $600,000 would allow construction to begin. Both Taylor and Berto explained that the project truly was "shovel ready" and encourage all commission members to make contact with state and federal legislators to promote the plan.

Taylor said that in a worse-case scenario, the partners would stagger construction and development of housing units, but that the approach would sacrifice cost savings for bundling the construction.

Berto and Taylor promised to create a list of the kinds of officials who would be the most influential in deciding where stimulus dollars would be assigned, so that Redevelopment Commission members could direct their comments effectively.

New Chair at Redevelopment

Tuesday night marked the first meeting of the Redevelopment Agency under new chairperson Shannon Brown. At the last meeting, Gerry Daley stepped down as chair after many years.

Tonight's meeting offered news of some progress for the North End Home Ownership project, and a split vote on a proposal for the Miller/Bridge Street neighborhood.

The meeting began with an update from Nehemiah Housing's Michael Taylor and Broad Park Development's David Berto. Their project to provide 17 home-ownership units in the Ferry/Green/Rapallo neighborhood has made slow progress over the past few years, but tonight we learned of a new funding source for the project. Michael and David were joined by Andrea Pereira from the Local Initiatives Support Corp. LISC was an early supporter of the project, with a loan to assist with acquisition and development. Now, as members of Community Development Financial Institutions (CDFI) they have helped secure a $425,000 "forgivable loan" for the project. That means that after five years, the loan is forgiven and essentially becomes a grant.

Nehemiah is still on the waiting list for funding from the Federal Home Loan Bank's Affordable Housing Program, but may be eligible for funding as early as next month. The all-important appraisal of what these homes might sell for is expected by the end of March, which has the potential to unlock both a construction loan from Liberty Bank and millions in HOME funds from the state's Department of Economic Development. If all those pieces fall into place, assembling the approximately $7 million necessary for the project, then Nehemiah could begin abatement and demolition of the properties in question as soon as this May. If that timeline holds, the proposed homes would be sold and occupied by Thanksgiving 2010. For more background on the North End Home Ownership Project, the Planning department has all the drawings on its excellent webpage.

In other business, Redevelopment heard a proposal from Planning Director Bill Warner to purchase and demolish a blighted building on Bridge Street. The proposal generated much debate, including that from yours truly who would rather see Middletown work a little harder to find alternate uses for historic houses -- this one was built in 1865. The proposal did pass, with five commissioners in favor, four against, and two abstensions for unknown reasons. Now the proposal moves to the Common Council for their consideration and funding.

The discussion on Miller and Bridge street made it clear that Middletown is no closer to solving the terrible access problem for this neighborhood. The City cannot afford to purchase and demolish all the homes, nor can it afford to connect the neighborhood with a new road to North Main Street. A bill has been proposed to the state by our legislators for $3 million to solve this problem. The much less costly and much quicker option of negotiating the opening of the Portland Street railroad crossing is apparently off the table. And so the residents of Miller and Bridge are not likely to see changes any time soon, except perhaps the removal of one vacant, historic house.

Redevelopment

The Redevelopment Agency met on Tuesday for an hour or so at City Hall.

Nehemiah's Michael Taylor spoke about the progress of the North End Homeownership project. At this point, Nehemiah and Broad Park are still trying to assemble the funding to build 15 home-ownership units on Ferry, Green & Rapallo (another 2 will be built by Habitat for Humanity). They have pursued a number of funding possibilities, which I have detailed ad nauseum in other EYE posts, here and here, which are contingent on receiving a construction loan from Liberty Bank. In October, Nehemiah notified us that Liberty will not loan the money for the construction unless they believe that there is still a market for these homes, so they are requiring an "after-rehab" appraisal, and a study to estimate how long it will take the homes to sell (we all know how much that ballgame has changed since this project began a few years ago, when real estate was selling like hotcakes.)

Astute readers of the EYE will notice that this is exactly where we stood a few months ago. Unfortunately, the appraisal has not begun because of some sort of internal snafu (it's not entirely clear where) that will require Nehemiah to pony up $4,000 before the appraisal will be done. Hopefully by this writing, Nehemiah has mustered up the funds to take this next step. It is, after all, an expected cost that a developer will face, and one which could be covered by the CDBG* funds that the City has already allocated for this project. But, as I believe is common with CDBG funding, the developer is expected to pay the cost up front and then get reimbursed after the paperwork is all signed, sealed and delivered.

Speaking of cash flow, David Bauer raised the question of how much it is costing Nehemiah for each month that the project delays. Although Michael will bring firmer figures to our next meeting, he estimated that it takes $5,000 to $6,000 monthly to keep this project on hold, including interest payments on the properties they bought, and utilities. He reassured the agency that these costs and his administrative time do not add to the cost of the project -- they are covered through the "Developer's Fee", which is recouped at the end of the project, when the properties are sold and the loan is paid off.

Other Redevelopment Agency members pushed for more of a timeline from Nehemiah. After the appraisal, it looks like the next hurdle is February, by which time they should learn whether they will be moved up from the waitlist for the Federal Home Loan Bank funds or whether they should make a March application for a June award from those same funds. Nehemiah has named next June as a critical juncture -- if funding is not in place by then, they will look at phasing the project, although that would create a large amount of extra paperwork with DECD.

Hopefully, they will receive good news over this winter. Also, Michiel Wackers dangled the hope that this project might be eligible in case the new administration in Washington, DC releases any "New Deal" type grants for local projects. This one is all approved and "shovel-ready" as they say.

But there's no question that the Redevelopment Agency is getting antsy as the months go by.

* CDBG is short for "Community Development Block Grant" funds, which is federal money from HUD (Housing and Urban Development) which goes to cities and towns with "urban" problems. Middletown gets a pot around a half-a-million each year, some of which goes to the operating budget of social service programs in town, and most of which helps with various bricks and mortar projects. Decisions about where to spend CDBG funds are made at the local level by the CAC (Citizen's Advisory Council) and the Common Council. Put that in your alphabet soup!

Redevelopment Re-Run

If you were at tonight's Redeveloment Agency meeting, you would be forgiven for thinking you've already seen this movie.

The same two issues were on the agenda:

-Miller & Bridge Street: Nothing new to report.

-Home Ownership in the North End: Not too much change here either.

As he did at last month's meeting, Michael Taylor from Nehemiah gave us an update on the $7 million plan to build 15 units of home-ownership (plus 2 to be developed by Habitat for Humanity) on Ferry/Green/Rapallo. As we know, 10% of the funding for this $7 million project has been secured (that's the City's contribution to the project). The remaining 90% is pending, with much hanging on the upcoming appraisal by Liberty Bank of the after-rehab value of the units. With a favorable appraisal, Michael says they are on target to unlock about $3 million in a DECD HOME grant, and another $2.5 million construction loan from Liberty Bank. There were two new pieces of information about the project funding. We learned of the "wait-list" status of Nehemiah's application for about $400,000 with the Federal Home Loan Bank of Boston. Also, Nehemiah has learned of a potential new source for about $425,000, which might replace their plans to apply for $500,000 in State Tax Credits next August (they were denied for those funds in the August 2008 cycle). Michael confirmed that they will wait to sign the construction contract with the contractor until "all the funding is in place", though they may start sooner with a smaller portion of the work, to get the environmental and demolition work going. At the request of Joe Tine (and pending adequate funding), Nehemiah offered a best-case construction schedule that might begin around April and end about a year later.

In other news, we had a visit from Michael Arafeh, who owns the Coffehouse Recording Studio, which is located at 510 Main Street behind La Boca. Michael and I are both part of the Chamber of Commerce "Creative Juice" council for arts/creative businesses. {Before the meeting, Michael mentioned to me that he's been working with a group of kids from Harford for a hospital holiday album -- sounds like a great project, and I think we are lucky to have this resource in our downtown.}

So what brought Michael Arafeh to Redevelopment? The same thing that brought him to countless downtown meetings over the last several years of North End redevelopment -- concern that construction noise would interfere with his sound-sensitive business. He made the reasonable request that he be notified of certain kinds of construction activities (like jack-hammering) so that he could re-arrange his recording schedule. During the construction of the Wharfside Commons project (by the Richman Group), Michael says that about 60 sessions were impacted by construction noise, which could have been avoided with better communication. I hope that Nehemiah can keep him in the loop on their construction!

Perhaps the liveliest part of the meeting came when David Bauer questioned whether Redevelopment should continue to use its meetings to review the North End Home-Ownership project, since the City has already committed funding for its 10% of the project -- and without many contractual benchmarks or timelines that the City could enforce -- and so it could be argued that we no longer have a dog in this race. This question prompted more discussion than any other issue, as several members voiced their various opinions about the oversight of this project, and the future of redevelopment in general. And if you, dear reader, have an opinion on this subject, I invite you to add a comment on this post!

I haven't got much objectivity on this issue -- I hope that we continue to monitor every step of the project, since we have invested $720,000 of city CDBG funds, and should be the first to know if the project hits any new delays or roadblocks. Also, though it's not perfect, we provide a forum where citizens can learn about the project and register any complaints. But I'd also love to see a higher standard of accountability in the Memorandums of Understanding that our City signs.

And now, a note to any followers of the Redevelopment Agency: in the future, we will meet at 5 pm, not 5:30. Still the Third Tuesday of the Month -- see you then.

Report on Redevelopment

The Redevelopment Agency met last night -- that's the citizen committee, appointed by the mayor, which is in charge of the official redevelopment projects of the City.

There are two primary projects we are working on.

There's nothing new to report about the Miller & Bridge neighborhood, which I wrote about here and here. Relief for this neighborhood will have to wait until the City can convince the State (through our legislators) to supply the approx. $3 million to implement either Plan A or Plan B. And now you'll just have to click on my old posts to see what those options are.


The other issue is the North End home-ownership initiative. The developers are Nehemiah Housing of Middletown and Broad Park Development Corp of Hartford -- I'll call this partnership "N-BP". The plan is for N-BP to create 17 home-ownership condos on Ferry, Green & Rapallo by doing rehab on a few historic houses, and demolishing two others and building new construction. The condos would be sold to people who fit certain income categories, and not on the open market (2 of the units would be developed by Habitat for Humanity). The City appointed N-BP as the developer on this project, which is intended to compliment the 96 subsidized rental apartments which have already been constructed on Ferry Street by the Richman Group.

It's been a long time in coming, but it seems that N-BP is getting closer to completing their financing for the project. I'll bore you with the details.

There are 5 sources of income for the $7 million project (this project costs more than $400,000 per unit.)
-There's a proposed grant from the state's Department of Economic Development, for about $3 million in HOME funds. It is in the final stages of approval and is supposed to be implemented within 90 days or so.
-There are proposed Housing Tax Credits from the State for about $500,000. The N-BP application for these credits was denied last August. They will have another opportunity to apply next August.
-The City has already committed $720,000 to the project. Most of that was done through the purchase of 2 properties, which the City gave to N-BP, along with the relocation of those tenants and various other items. The last 10% of the City's committment will be transfered to N-BP through Community Development Block Funding at the November Common Council meeting. I should note that CDBG funds come from the Federal government through HUD, and they are awarded to Middletown and other cities based on the number of low-income residents.
-The Federal Home Loan Bank in Boston is listed as a source for about $400,000,and a decision on this funding is expected in November.

-The developer is anticipating that these condos, when complete, will sell for about 2.5 million. Since those funds won't be realized until the end of the project, N-BP has applied to Liberty Bank for a construction loan, which is awaiting an "after-rehab" appraisal of the likely selling prices of the future condos, which is expected within the next 3 months.

Of these five sources, the City's portion is the only fully committed source, but the others are moving closer to reality and the next 3 months are critical to the future of this project. For cash-flow purposes, N-BP has also taken out some loans so that they could get to this point with the project, and those loans will be paid back through some of the above sources. N-BP has noted that if one of their funding sources ultimately denies them, they will look for other sources. (Note: all this data comes from the reports by Michael Taylor of Nehemiah during the Redevelopment meeting, and if I've got it wrong, I hope someone will correct me!)

One unusual event at the meeting last night was the appearance of four of the landlords in this neighborhood (in spite of all the publicly-financed properties, there are still some independent homes and small rental properties on these streets.) These landlords, with Connie Piacenta as their spokesperson, were making the rounds of various city committees concerning planning, health, safety and anywhere they could find an ear. They wanted to express their concerns about how long it is taking for the N-BP project to move forward, and about the condition of these buildings in the meantime. They also had a long list of issues about parking, garbage and the condition of the small City playground which has been vandalized. And they voiced concerns about the maintenance of the new Wharfside Commons (the Richman Group apartments).

Although the Redevelopment Agency is not in charge of some of the issues that they raised, I was very glad that they came and expressed their opinions so that we can monitor the situation more closely. The squeaky wheel gets the grease, and their approach of appearing before multiple committees is already working - they noted that some clean-up had already begun. As a volunteer on the Redevelopment Agency, it is always helpful to hear from citizens -- not just from the professional developers, City officials and other "regulars".

If you are still reading, then you must have an unusual tolerance for City business! Consider offering your services to the Mayor the next time an opening occurs on Redevelopment, or just come down, on the 3rd Tuesday of every month (time TBA) to watch the proceedings.