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Barrington resident questions tax break for affordable housing projects

By   /   July 12, 2013  /   2 Comments

It was recently reported that some of the homes at Walker Farm Lane will be offered as rentals, since the developer was not able to sell them.

It was recently reported that some of the homes at Walker Farm Lane will be offered as rentals, since the developer was not able to sell them.

Gary Morse believes in affordable housing. He just has a problem with how it is currently being managed in this town.

The Westwood Lane resident said there are a few significant issues that concern him, including the tax break extended by the town council to the non-profit agency that built Sweetbriar in West Barrington and is planning to build the 48-unit Palmer Pointe project on Sowams Road.

“Some affordable housing initiatives make sense… I do believe in a properly managed affordable housing regime,” Mr. Morse said. “But that’s not what’s happening here.”

Mr. Morse approached the town council at its meeting on July 1 and questioned different actions taken by the board in the past. He also called a previous council’s vote to extend the tax abatement to the East Bay Community Development Corporation for Sweetbriar illegal.

The abatement allows EBCDC officials to pay property taxes that equal 8 percent of the annual rent collected at the development. A town official said the abatement subsidizes the ongoing expenses of the project, and results in tens of thousands of dollars (if not more) in tax revenue that is not collected by the town each year. 

“There are only two things that are required” in the state’s affordable housing statute, said Mr. Morse. “Every town had to write and implement an approved comprehensive plan, and two, they had to implement inclusionary zoning ordinances … once they did that, there were done.”

Mr. Morse said Barrington has exceeded the requirements of the affordable housing statute in agreeing to the tax abatement. He said the allowance adds to the already high tax bills for local residents. It’s quite conceivable that some Barrington residents who earn the same or less money than people living in Sweetbriar are in fact subsidizing those folks who live at the development.

A worker helps build one of the homes at Sweetbriar a few years ago. The town extended a tax break to the developer; a resident recently said the tax break should not have been offered by the town council.

A worker helps build one of the homes at Sweetbriar a few years ago. The town extended a tax break to the developer; a resident recently said the tax break should not have been offered by the town council.

 

Barrington Town Council President June Speakman agreed that the town was not “required” to give the abatement to new developments, adding that local officials have not decided whether the break will be extended to EBCDC for Palmer Pointe, but challenged the idea of canceling the abatement for Sweetbriar.

“I don’t think we’re legally able to visit it with Sweetbriar. I don’t know if we can do that,” she said. “With Rhode Island Housing, when I called them, they said it is their interpretation that the town is required to give the 8 percent… There are other communities that have not given it.”

Ms. Speakman said the town could run into trouble, however, if it does not extend the tax break to EBCDC. She said the developer could view the denial as an effort to stop the project, and use that as a grounds to appeal to the State Housing Appeals Board. (Ms. Speakman is a member of that board.)

The council president said the tax abatement should remain as an option for negotiation purposes. Fellow councilor Kate Weymouth agrees.

“We’ve had it recommended by the housing board to use it (the abatement) in negotiations,” Ms. Weymouth said. “(Palmer Point) is not identical to Sweetbriar, so maybe there is a way of using the 8 percent or subsidy to better serve the needs of Barrington. … If we take that off the table, it’s taking away the council’s only tool to getting a better end product.”

Ms. Weymouth was on the council during the Sweetbriar development dispute and remembers how hard the council fought to stop the project as it had been proposed. She also remembers losing that battle, and said a decisive move to eliminate the abatement could yield an adverse reaction by the developer.

“Knowing how this particular developer has worked in the past, if we say no, they will take us to court,” she said. “If we say categorically no, and they cannot make this work (financially without the abatement), we are sending a message to the state that we are not allowing for further affordable housing.”

Mr. Morse said the issue should have little to do with a message and be focused instead on doing what’s right for all parties involved. As he sees it, the council has been ignoring the impact these projects will have on the current non-subsidized Barrington residents.

“It is not the job of the residents, nor is it the jurisdiction of the town council, to make sure affordable housing is (financially) feasible. That’s the job of the developer,” he said.

EBCDC, which built Sweetbriar, is planning to turn the Sowams Nursery property into an affordable housing development called Palmer Pointe.

EBCDC, which built Sweetbriar, is planning to turn the Sowams Nursery property into an affordable housing development called Palmer Pointe.

 

Mr. Morse pointed to a project proposed in Bristol where the developer — EBCDC — did not ask the town council there for a tax abatement.

“If we include tax abatements for affordable housing on top of subsidies there is a huge incentive (for the developer),” he said. “You could even make affordable housing rental properties work in Rumstick. I’ve looked at the numbers and you could develop it and make money.”

The tax abatement topic is a surface poke at the affordable housing issue for Mr. Morse, who had projected the state’s pension crisis before many officials recognized it in Rhode Island. He said he’s been studying affordable housing for months and can see the long-term potential these properties hold for the owners. A project like Palmer Pointe, he said, would stand to be worth far more money to the developer once the 30-year deed restriction expires.

“Palmer Pointe is a gold mine for EBCDC,” he said. He then referenced an affordable housing project in East Providence which he said recently sold to an investment group for more than $19 million. “Sweetbriar now has 25 years left (until the deed restriction expires) … that’s on the radar for investment companies … people who have long investment views … they’re drooling for these places.”

Meanwhile, the nonprofit developers are benefiting from sweet deals from town councils, said Mr. Morse.

“We’re allowing (EBCDC Executive Director) Kathy Bazinet to make $130,000, earn a pension and drive a very nice car. We’re enabling a non-profit to act as if it’s a Fortune 500,” he said.

Ms. Speakman said it is completely inappropriate to question the role of the developer and the salary of its executive director — “The implication that Kathy Bazinet is getting fat and happy is offensive to me,” Ms. Speakman said. “I have not seen the books for EBCDC, but the executive directors are not wealthy.”

A tax disclosure statement from 2011 shows that Ms. Bazinet earned more than $118,000 that year.

The council president said people opposed to affordable housing will often twist a conversation to fit their argument. Under the surface, she said, some people simply don’t believe in affordable housing and certainly don’t want it built near their homes.

“I had a gentleman spend an hour telling me about high crime rates in poor neighborhoods,” Ms. Speakman said, adding that the man was trying to build an argument against Palmer Pointe. “The most horrific crimes (in Barrington) have been in the best neighborhoods.

Officials from Rhode Island Housing and EBCDC celebrate the opening of Sweetbriar a few years back.

Officials from Rhode Island Housing and EBCDC celebrate the opening of Sweetbriar a few years back.

 

“… People oppose this development for a variety of reasons … If you don’t want a project you’ll bring as many arguments as possible.”

Mr. Morse said he’s looking at the facts, and could make a case for the opposite being true. He said some officials have manipulated the language of the state’s affordable housing statute to suit their desires.

“There is nothing in the statute — there is no 10 percent mandate … it’s a goal … all they had to do is build a plan and write some inclusionary zoning. … They converted the 10 percent goal and started using the words 10 percent mandate. They subverted the language. It’s not mandated — it’s a goal,” he said.

At last check, Barrington is still far from hitting the 10 percent goal of offering that amount of the town’s overall housing stock as affordable. Ms. Weymouth said the town started the journey with less than 1 percent and currently sits at about 2.5 percent.

“It seems like they (the state) put the mandate in place with Barrington in the cross-hairs. They created the mandate with Barrington in mind,” she said.

Ms. Speakman said she believes it is time for members of the Rhode Island General Assembly to investigate the affordable housing legislation and discuss whether it needs to be altered. The current real estate market has changed significantly since the time when lawmakers decided to get involved.

“The legislation was created at the height of the housing crisis. The state took action to resolve the crisis … whether it’s working now needs to be examined,” she said.

Barrington resident Gary Morse is challenging the council on the tax abatement offered to Sweetbriar developer EBCDC.

Barrington resident Gary Morse is challenging the council on the tax abatement offered to Sweetbriar developer EBCDC.

 

Ms. Speakman added that it was not fair for the state to create the housing mandate but do nothing to assist municipalities as they struggle to implement the law and overcome obstacles tied directly to the statute.

“We’re down here at the municipal level fighting with each other because the state has made a law … it’s vague, and we receive no compensation — the state ought to help out .. it out to provide us with some impact aid,” she said.

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Barrington & Bristol Editor

2 Comments

  1. GaryM says:

    Tax breaks should be based on demonstrated need. In 2008, the Barrington Town Council did’nt bother to ask if there actually was a financial need. Since then, there has never been a review by the Council as to whether there actually exists financial need at EBCDC.

    in FY 2012, EBCDC showed revenues of $2,109,357, and expenses of $1,003,028. Not bad for a “non-profit.”

    Then there are 6 “other” EBCDC entities with $1,046,587 in unaccounted revenue / expense streams. The Sweetbriar Limited Partnership is one of the 6 entities. How does anyone figure out if there actually exists a need for a tax break?

    Transparency is long overdue.

  2. GaryM says:

    Keep in mind that Sweetbriar is a Limited Partnership controlled by a corporation that can turn around and sell the development to any private investor for a profit at any time.

    Sweetbriar does not serve the Town of Barrington in any meaningful way.

    In 2012, the 40 year old affordable housing development, Kent Farm in East Providence, was sold to a private investment company for $19.85 million. There is still 9 years remaining on the “deed restrictions”.

    The residents of East Providence were subsidizing that development as well when the Kargman family sold the place.

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