Selectman Thomas Sheldon, left, and Chairman Ronald Turbin sign the grant agreement.
WILLIAMSTOWN, Mass. — The Board of Selectmen on Tuesday finalized the $2.6 million town grant to fund the Highland Woods senior housing project.
The board decided last year to commit the town to that dollar figure, which the town anticipates having at its disposal after it has met its obligations under the terms of a federal Hazard Mitigation Grant.
On Tuesday, one of the project's lead developers and its counsel appeared before the board to discuss the final grant agreement.
After a lengthy discussion that aired two concerns from Selectman Andrew Hogeland, the board voted 4-0-1 to OK the grant agreement, with Hogeland abstaining.
Hogeland was clear that he is 100 percent behind the Highland Woods project and the town's intent to contribute to the affordable housing development. His concerns were related to the specifics of the grant agreement that he thought potentially opened the town to risks.
However, he encouraged his colleagues to proceed with a vote and noted that he would not be voting against the grant, merely abstaining.
His concerns were twofold: that the contract makes reference to a project timeline that is not spelled out in the contract itself and that the town is committed to award the $2.6 million six months after Highland Woods receives a certificate of occupancy — whether or not the town has received the balance of the FEMA grant money.
"Our obligation to give $2.6 million is not dependent on the FEMA grant," Hogeland said, referring to the language of the grant agreement. "If the FEMA thing is delayed or falls apart, we don't have the money to pay this bill."
Town Manager Peter Fohlin, who negotiated the FEMA grant with federal and commonwealth authorities and Spruces Mobile Home Park owner Morgan Management, said Hogeland was correct in that conclusion but stressed that the grant agreement between the town and the Highland Woods developers was drafted to coincide with the FEMA grant timeline.
"The intersection is we are required by the FEMA grant to be finished by March 28 or 29 of 2016," Fohlin said. "This agreement [with Highland Woods] runs longer than that. ... The timing of the FEMA grant played into the three-year paragraph in this contract with the anticipation that this will come to fruition after the FEMA grant comes to fruition.
"The FEMA grant requires Morgan Management to write a check at the end. What if they don't? They've broken the contract with us, and there are a whole set of difficult situations that occur."
"That's what I worry about," Hogeland said. "Things go wrong. If everything's not on time ... we don't have the money from Morgan Management and FEMA, but we still have an obligation to these guys."
Berkshire Housing Development Corp. President Elton Ogden and attorney Donald Dubendorf told the Board of Selectmen that if the town made the $2.6 million grant contingent on actions by a third party — either FEMA, the Massachusetts Emergency Management Agency or Morgan Management — such conditions would hurt the project's position with other funders.
"If we have a conditional commitment for $2.6 million, it's treated in the financing as if it doesn't exist," Dubendorf said. "If all of it is conditioned ... it's of so much less value to us."
Later in the meeting, Dubendorf acknowledged that there is uncertainty built into the process, but the developers were not in a position to give the town all of the assurances it might want.
"I don't know of other structures available to us to to avoid those uncertainty pieces," Dubendorf said. "But we need the $2.6 million to make the project work."
As for the notion of a timeline, Dubendorf indicated a willingness to provide one and, in fact, had done so in the past. But the idea of spelling it out in the grant agreement failed to gain traction among Hogeland's fellow selectmen.
Fohlin, meanwhile, advised the board that a three-year termination date on the grant agreement protects the town from an endless commitment to the Highland Woods — similar to the one that allowed the Cable Mills developers to interminably tie up town funds.
Fohlin stressed that Berkshire Housing and its partners — the Women's Institute for Housing and Economic Development, Higher Ground and Williamstown Elderly Housing — have a three-year clock that began ticking on Monday night, and he is not interested in what milestones they hit along the way.
Attorney Donald Dubendorf, left, and Berkshire Housing President and CEO Elton Ogden address the Selectmen.
"My schedule would have one date on it," Fohlin said. "I wouldn't put milestones in.
"Just to be clear, what I did to protect the town was to say: You don't get a CO [certificate of occupancy], you don't get a dime. Secondly, you don't get it done in three years, you don't get a dime."
Fohlin was called upon once again to give a broad view of the funding under the FEMA grant. Out of $6.1 million in FEMA grant money, Morgan Management got $600,000, which it used to pay off the note on the mobile home park. After the town compensates the 66 residents who were in the park on the day the grant was received, it expects to have about $4.1 million, of which $1.5 million will be used to remove infrastructure and abandoned mobile homes and return the park to its "natural state" as required by FEMA.
That leaves $2.6 million, which the town intended from day one to go toward replacement affordable housing that could serve residents like those who lost their homes at the Spruces. That is where the Higher Ground-led coalition, working with land donated by Williams College, stepped in to conceive Highland Woods.
Ogden said the developers plan to break ground by the end of the summer, which would keep the project on track to accept residents before the March 2016 date on which the Spruces must be totally shut down.