After months of meetings, the Board of Appeals on Zoning closed the public hearing regarding The Parc at Medfield, an 40B affordable housing project proposed off West Street.
The Board of Appeals on Zoning will meet tonight at 5:30 p.m. at the Town House to start the decision-making process regarding the project that would include four buildings of one, two and three-bedroom rental units on 9.22 acres of land near the former Potpourri building between West Street and Route 27, according to the Executive Summary of Gatehouse Group LLC's application filed with the state.
Before closing the hearing on Nov. 5, the ZBA heard from its financial advisor Michael Jacobs of MHJ Associates.
Jacobs report was to provide context to the board in its decision making. In his report, he noted the following:
- It is a tax credit project; rents would be 60% of the area median rental rate; different than Section 8 which is 30% of the area median rent
- The project falls under old regulations which were updated in April 2012
- Developers rate of return is based on total construction costs minus the mortgage
- Developer paid $1.6 million for the property appraised at $935,000
- Applicant's projected site and landscaping costs seem high, building costs are within range, construction contingency is standard
- Projected soft costs (architect, legal, etc) of $4.9 million are "not unreasonable," within that there are some line items that seem high
- Operating expenses projected at $8,500 which seem high (ZBA member Charles Peck said this number is too high)
- Debt service, proposed interest rate in application is 8% but rates are much better now (5.5% and lower)
- The project has a "very, very low rate of return" of less than 1% when including the tax credits; if the tax credits are excluded, it goes up to 12.5% which is higher than allowed by standards
- Developer makes money from the fees (developer fee is set by the state, management fee seems high but is within acceptable range)
- Developer has yet to submit final plans
In addition, Jacobs asked why this was "100 percent low income tax project and not a mixed income project."
ZBA member Charles Peck noted the town would get approximately $82,000 in tax revenue from the property but the cost of educating additional schoolchildren could go up $500,000.
"That's not supposed to help us decide to do this or not but it's something that's worthy of note," Peck said.
Peck said he had visited Gatehouse properties in Wareham and Walpole and "they are both attractive properties."
"The elephant in the room is the tax credits," said Mark Bobrowski, the town's legal consultant, noting that, if the tax credits were removed from the equation, the project would have a higher rate of return.
ZBA Chairman Robert Sylvia again expressed concerns that the project is close to the wetlands and violates town bylaws.
Monday's hearing was also the last time for residents to talk about how the project would affect them -- traffic and sidewalks, noise and light pollution/remediation, school bus stop and class size, aquifer concerns, etc.
"It's very frustrating for me," said Shawn Collins. "It's going to be great for their investors and certainly they're going to take a lot in soft costs, $4.9 million, and we as taxpayers are going to bear the cost forever."
The ZBA has 40 days from the close of the hearing to issue its decision. Their meetings will be posted and open to the public.
"Nobody in their right mind would approve this project were it not for the assistance of 40B because it is an economic nightmare for the town of Medfield, that is true," said Sylvia.
Representatives from the Gatehouse Group were present but did not speak at Monday's meeting.
- 40B Project Could Add 80 Students to School District
- Affordable Housing Project Continues to Raise Questions
- Neighbors Ask: "Is 40B Development A Duck?"
- ZBA Denies Application for Extension for Affordable Housing Project Off West Street
- A Closer Look at the Proposed Housing Complex Off West Street
- Affordable Housing Project on West Street Could Cost $15 Million to Develop
- Hundreds of Residents Seek Answers Regarding Proposed West Street Affordable Housing Project
- And more...