Windover disputes review of Fuller proposal

Courtesy photoAn artist’s rendering of the proposed Fuller School site development.

Windover Construction officials — driving forces behind the housing component of the $70 million Fuller School site project — are challenging several aspects of a consultant’s study that found the Fuller proposal to the city does not, in fact, pose an economic “hardship” for the builders if they were to include the required affordable housing on-site as well.

That hardship status, under the city’s housing ordinance, opens the door to alternatives to building the housing, including, as in this case, a cash payment to the city instead of the 30 affordable apartments. The current plan is for 200 market-rate units at the site, within a larger development in partnership with the Cape Ann YMCA and Sam Park & Co. The market-rate apartments — planned as eight studio units, 79 one-bedrooms and 113 two-bedrooms — would be owned and managed by the Dolben Company.

The questions expressed by Windover CEO Lee Dellicker and Peter Gourdeau, Windover’s director of project development, come on the heels of a report posted earlier this month by Lynne Sweet and her Newton-based LDS Consulting Group. The report verified many of the costs and other numbers listed by the Fuller developers, yet found no need for the city to recognize a hardship for them if affordable housing is included on the 10.6-acre site.

Under the city’s housing ordinance, any new project with more than 11 units must include 15 percent of those units as affordable residences by federal and state housing income guidelines, unless the developer can claim a hardship, which is not defined by the city.

Gourdeau challenged the LDS finding that the developers are buying the property for what Sweet termed a “low acquisition cost,” saying Sweet is not considering the overall land preparation costs. Those costs have risen since the partnership bid $5.1 million for the site in November 2015, then added $500,000 to cover an in lieu of payment for the city’s Affordable Housing Trust.

Mayor Sefatia Romeo Theken has said she would consider the sale price as $4.1 million, and the affordable housing payment at $1.5 million. The administration and Fuller partnership signed a purchase-and-sale agreement in the fall of 2016 that remains in place.

Gourdeau also emphasized that the partnership — which proved to be the only bidder for the site — made its offer based on the city’s call to “maximize” the sale price and tax revenue. And, reiterating financial analysis submitted previously from Edward Marchant, of EHM Real Estate Advisors, Windover notes that including the 30 affordable units would yield $2.57 million in operating net income but lower the overall return on investment.

It would drop the project’s revenues to a 5.6 percent return on the housing project’s total costs. That’s below the state’s recognized 6.75 percent threshold that is used to define hardships in cases of Chapter 40B housing projects.

“This (project) is not a 40B project,” Gourdeau said, “but this is the only hardship standard there is to go by, and this more than meets that standard.”

Finding sparks questions

The questions swirling around the LDS report come as the City Council’s Planning and Development Subcommittee prepares to hear from Sweet — a certified member of the National Council of Housing Market Analysts and a member of the Newton Housing Partnership — as well as the Fuller partnership at a special Jan. 29 meeting.

Ward 4 Councilor Val Gilman, who chairs the panel, said she also has “a lot of questions” about the LDS report’s finding of no hardship in the Fuller development.

“I want to be able to hear from both sides,” said Gilman. “I want to hear from the consultant, and I want to hear from the developers. Just because we have a report that says one thing doesn’t mean that’s the way we have to decide.”

The subcommittee will make a recommendation to the full council regarding the Fuller project’s permit application, which would have to be approved by the council.

Jen Holmgren, a first-year councilor-at-large who has joined Gilman and council President Paul Lundberg on the planning and development panel, said she, too, wants to hear from all parties, especially over contradictory claims between LDS and Windover.

Conflicting info

The LDS report, for instance, notes that Sweet “can reasonably assume that all site costs have been allocated to the residential phase” of the project to accentuate a hardship declaration. But figures cited by Gourdeau show that more than half the overall site preparation costs for demolition of the old school, environmental testing and asbestos removal — $6.1 million as opposed to $5.9 million — are being borne by the Y and Sam Park, not part of the housing costs.

Gourdeau also reiterated that an alternative proposed by the YMCA — to build 53 affordable units on its current 71 Middle St. site once a new YMCA opens at the Fuller site — would better serve residents because rents would be based on the city’s median household income of $67,000. But any affordable units included in the Fuller site plans would be based on the Boston area median income of $98,500.

Holmgren conceded that the Middle Street option — which is not currently tied to the Fuller application — looms as “interesting.”

“I know we have a lot of people in this community who are really struggling with housing (costs), and I think we need to seek out the options that can bring us more workforce housing,” she said. 

“That may well apply to more people who live here and need housing, but can’t find it,” Holmgren said. “We have to hear from all sides to decide the best way to go for all.”

Staff writer Ray Lamont can be reached at 978-675-2705, or via email at rlamont@gloucestertimes.com

If you go

What: Special meeting of the City Council’s Planning and Development Subcommittee to discuss permit for redevelopment of Fuller School site and consultant’s report on housing complex hardship.

When: Monday, Jan. 29, 5:30 p.m.

Where: City Hall, Kyrouz Auditorium.

Input:  Meeting is not scheduled as a public hearing, but residents are encouraged to hear presentations and let their councilors know their views.