PEABODY — The sale of the Tannery I apartments to WinnCompanies will preserve a large chunk of the city’s affordable housing stock — 284 apartments to be exact.
The deal came closer to reality Tuesday night, when the city’s Community Preservation Committee approved $950,000 to go toward the $37.5 million purchase price, said Mike Schulze, the committee’s chairman.
WinnCompanies reached a purchase and sale agreement for Tannery I in October.
The real estate firm was able to match a bid for the property by another developer at a time when the complex’s affordable housing requirement was expiring. WinnCompanies has committed to keeping the apartments affordable.
The community preservation money, plus another $750,000 in inclusionary zoning funds from the city and other funds from state agencies, will pave the way for the sale to move forward with Winn, the state preferred developer.
The Community Preservation Act allows cities and towns to collect surcharges on property taxes to help fund local affordable housing, historic preservation and recreation projects.
The property at 18 Crowninshield St. was previously the A.C. Lawrence Leather Co. When the former tannery complex was converted to housing 40 years ago, the owners received a state subsidy in return for the creation of affordable housing.
With that subsidy expiring, the owners, listed in city records as Crowninshield Apartment Associates, decided last year to sell. Crowninshield Apartment Associates’ general partners are developer Philip Singleton of Lynnfield and Crowninshield Tannery I Inc., whose president is Deborah Collier-Comins.
But the state had an option to bid to preserve the affordable housing at the complex, and it chose Winn to submit a bid. But Winn’s first bid fell far short of one by another developer. Winn was given about 30 days to match that bid, with funds from the city playing a major part in helping to preserve the complex.
Ward 2 Councilor Peter McGinn, a member of the Community Preservation Committee, said the sale to Winn will preserve 284 apartments as affordable. The complex also includes some market rate apartments, but McGinn said they all count as affordable.
McGinn said the project cost, including the acquisition, will be in excess of $65 million.
Schulze said the new owners plan to rehab the mill complex, but the company is keeping mum for now.
“We look forward to discussing our plans in detail once the transaction is completed,” said Ed Cafasso, WinnCompanies senior vice president, communications, in an email.
McGinn said the money from the city prevented Peabody from backsliding on its affordable housing inventory.
If Tannery I had been sold to another developer, it would have made it much harder for the city to meet its 10 percent minimum threshold for affordable housing mandated by the state Department of Housing and Community Development. Communities that fall below 10 percent face the possibility of large, dense developments built under a comprehensive permit that can skirt most zoning rules in exchange for providing affordable housing.
About 9.5 percent of the city’s housing stock is deemed affordable, but the sale of Tannery I to a different developer could have dropped that down to 8 percent.
Schulze said there were concerns that the Community Preservation Committee not give the money directly to Winn, a private entity. Instead, the funds will go to the city, which will funnel the money to Winn. This way, Schulze said, the city maintains some control. The grant will be in two phases, $850,000 this year, and $100,000 next year.
“It’s an absolutely perfect use for that money,” said Councilor at-Large Anne Manning-Martin, who had advocated last year for Tannery I to remain affordable.
“This is all working out well and going according to plan,” she said.
Staff writer Ethan Forman can be reached at 978-338-2673, by email at firstname.lastname@example.org or on Twitter at @TannerSalemNews.