The rent control board reviewed and approved each line item in the application. Tenants of the park attended in support of the rate hike.
NORTH ADAMS, Mass. — The application for a rent increase at Wheel Estates Mobile Home was accepted Tuesday evening, paving the way for the tenants to purchase the 42-year-old park.
Some 30 or so residents of the park broke into applause after the Mobile Home Rent Control Board gave the OK to raise their rent $49 a month.
"At least things will get done now," said Dennis Campbell of Apache Drive, as his neighbors spoke up in agreement. Others hoped to see improvement not only in the park's facilities but a resurgence of pride in the lots as well.
"People will have pride of ownership," said Jeanne Geissler, who's lived in the park for 36 years.
It took three meetings and the development of a new application form to accommodate nonprofits before the board was able to give its endorsement to the 17 percent increase.
Chairman Wayne Wilkinson warned current owner Morgan Management and any other company seeking to purchase the property that the rent increase was solely dependent on the park being bought by residents.
"This vote for a rent increase is subject to the tenants actually buying the park and any other entity who thinks they're going to automatically get a rent increase is wrong," said Wilkinson, who had earlier noted a representative from Morgan Management was filming the proceedings. "It will go into effect the day you sign the papers."
The Wheel Estates Tenants Association is hoping to close by the end of the month. Waiting in the wings is Real Estate Seekers LLC, which signed purchase and sales agreement for a reported price of $2.73 million with Morgan Management. The tenants have rights to match the price but were unable to do so without a rate hike to cover the cost and another $1 million for long-awaited improvements in park.
The catch had been way the board calculates a fair rate that takes into account the expected profit for a corporation while ensuring tenants aren't overcharged. The solution had been the creation of a new application form specifically designed for nonprofits, which may well be used in the future as the state is encouraging tenants to take control of their parks.
Board member Joseph Gniadek said he did a marathon all-nighter after last week's more contentious meeting to crunch the numbers provided by nonprofit consultants Resident Owned Communities USA of New Hampshire and Cooperative Development Institute of Shelburne Falls.
"I have created a new petition that has passed the city solicitor," said Gniadek, who had the board approve each line item separately. Wilkinson confirmed that he'd also spoken with the solicitor and that the form could be used that night.
Where the for-profit application allowed for rate of return, the new form provided space for debt service, a sticking point in the deliberations of the past two meetings since the new nonprofit had to show the bank it could cover its loan debt.
The board approved recategorizing some items and made some minor changes in amounts, eliminating a built-in 3 percent "rental loss" that would cover late payments and evictions, but adding in $24,000 toward plowing based on past figures.
Gniadek suggested that the new nonprofit create a capped repair account to put money into annually as insurance for any emergency repairs.
In the end, the board approved a total assessment of $2,762,770, or 100 percent of value, and total allowable expenditures of $774,028 a year, which between the 187 occupied units accounted for the $345 a month ($4,139 a year).
All the figures used are "hypothetical" and the tenants association will have to come back before the board in a year.
The approval of the rent increase and documentation will be submitted to ROC USA; the tenants hope to have financing finalized by the end of the month. They had until March 27 for an agreement to be in place.
The park residents were confident the deal will go through and they'll be able to put their money into fixing up the deteriorated park and not, as many said, "in somebody else's pockets."
"We just want to get it back to the way it was," said Tenants Association President Sandra Overlock.