Williamstown CPC Fails in Bid to Lower Cable Mills Bond
|The town will have to borrow about $1.1 million to keep its commitment to the Cable Mills project, which will include market-rate and affordable housing.|
WILLIAMSTOWN, Mass. — The Community Preservation Committee last week was thwarted in two attempts to lower the size of the bond the town will need to pay its remaining commitment to the Cable Mills renovation project.
Town meeting in 2007 committed just more than $1.5 million of Community Preservation Act funds to support the project, which has been delayed by — among other things — an economic downtown and the death of its principal developer.
Current developer Mitchell Properties began construction on the project this fall and hopes to have the former mill building ready for residential occupation about a year's time. That means it is time for the town to make good on the remainder of its commitment.
Some CPA funds already have been transferred to support predevelopment work. The CPC has earmarked some more money to pay down the principle. But the committee is looking at a $1.1 million bond to pay the rest.
"That means paying $150,000 of our annual revenues for the next 10 years to pay principal and interest," committee member Jeffrey Thomas said at the Dec. 16 meeting. "That is more than 50 percent of our [annual] revenue based on the last five years. We're trying to figure out how to get a smaller bond so we could have more flexibility to fund other projects."
To that end, the CPC asked Mitchell Properties to delay its request for a portion of the town funds for another year and asked the town's Affordable Housing Trust to give back some of the money in its treasury, which has been funded with CPA money over the last three years.
The committee heard "No" from both bodies at its most recent meeting.
The developer was asked to lower its "ask" by $200,000, allowing the town to reduce the bond by that amount and the CPC to ask town meeting for a separate $200,000 appropriation in May 2015.
"The town has waited seven years for this project," CPC Chairman Philip McKnight told the developer on Tuesday. "All this committee might ask of you is to defer the acceptance of the last $200,000 into FY16. The thought was that in a $27 million project, surely there are $200,000 that could be found from other resources."
Mitchell Properties Director of Development David Traggorth appeared before the committee to explain that the town's contribution to the $27 million project is important, if modest, in the overall funding picture.
"We certainly understand and appreciate and share the interest of saving the town as much as possible," Traggorth said. "At the same time, we want to get the project done, and I think the town wants to get the project done.
"The difficulty in saying, 'Let's put off contributions from the town to further fiscal years,' … is every single dollar has to be secured and committed with legal documents that come in upon formulaic events.
"If there is any chance that those commitments will not be made and there's not a legal recourse to get them, the deal won't close. It won't move forward."
Town Manager Peter Fohlin, who sits on the CPC, said that 2007 town meeting vote authorized the town to borrow up to the $1.525 million. If the CPC wanted to borrow less than that because "we just found a half million bucks under the table," it could, in theory do that. What the committee could not do is promise a grant of $200,000 in FY2016; that would need to be authorized at the 2015 annual town meeting.
Traggorth told the committee that entire balance of the $1.525 million is needed to keep financing on track for the project.
"What we've been doing for, obviously a long time, is finding a construction lender and pulling all those pieces together," Traggorth said. "That sequence is incredibly important and required to get a construction loan. If we don't have that — if we have something contingent on a town vote, something essentially out of the control of the developer, we can't go forward.
"As much as we would like to help, we really, really do need these commitments and need these funds when they're scheduled to come in."
After explaining why Mitchell Properties cannot comply with the request, Traggorth brought the committee up to speed on the latest timetable for the project. In May, the developer plans to announce rents for the initial leases on the 61 units at the site, and he expects to have model units available for marketing by midsummer.
Traggorth said Mitchell Properties is confident about the demand for the units.
"No one is pretending that 61 units is not a lot of units coming online for Williamstown, but we've done this before," he said, referring to other historic renovations in similar markets. "There are not a lot of other projects that look a lot like Cable Mills that people can point to and say, ‘That's what this is.' But that's part of what makes it exciting."
The committee's other prospect for help in lowering the amount of the bond was the Affordable Housing Trust, with which McKnight and Thomas met to discuss the prospect on Nov. 24.
At that meeting, it was clear that the trust had some misgivings about the proposal, and last Tuesday, its Chairman Thomas Sheldon appeared before the full Community Preservation Committee to tell it that the trustees decided they could not consider it.
Sheldon explained that the trust is moving forward with its Mortgage Assistance Program, having just approved the first applicant for a $15,000 grant, and is in the beginning stages of possibly acquiring land for a partnership between the town and a non-profit like Habitat for Humanity.
"The trust, considering everything we know, unanimously and fairly strongly would not like to give back money, understanding these were CPA funds that we deeply appreciated," Sheldon said. "We did not feel it would be consistent with our charge as the trust board to reduce our treasury in the amount being asked."
"I think in my analysis and discussion of this idea, I developed a better understanding of the trust's perspective," he said. "In keeping with their mission, they ought to preserve their money and spend it on other projects. That makes sense to me."
Tags: affordable housing, affordable housing trust, Cable Mills, community preservation, CPA,