Committee Report CR-2
Present at the meeting were Councillor Marjorie C. Decker, Chair of the Committee, Councillor Craig Kelley, Vice Mayor E. Denise Simmons, Councillor Minka vanBeuzekom, Mayor Henrietta Davis, Richard Rossi, Deputy City Manager, Brian Murphy, Assistant City Manager for Community Development (CDD), Chris Cotter, Housing Director, CDD, Cassandra A. Arnaud, Housing Project Planner, CDD and Interim City Clerk Donna P. Lopez.
Also present were Tom Lucey, Director of Community Relations, Harvard University, Leslie Bos, Recap Advisors for Harvard University, Peter Daly, Executive Director, HRI, Michael Johnston, Deputy Executive Director for Administration, Cambridge Housing Authority (CHA), Angelica Benzan, CHA, Susan Hegel, CSLS, Kathy Watkins and Cheryl Ann Pizza-Zeoli, Association of Cambridge Tenants (ACT), Robert J. LaTremouille, 875 Massachusetts Avenue and the following residents of 2 Mt. Auburn Street: Jeffrey Cayler, Eurene Lasley, Isabel Tellen, Mary Martell, John Van Saun, Geri Pao, Paul and Helen Black, Richard Wadman, Robert Chamberlin and Louise Phelan.
Councillor Decker convened the meeting and explained the purpose. She stated that the purpose of the meeting is to hear an update on the proposed sale of 2 Mt. Auburn Street. She outlined the format of the meeting. She would have CDD explain the sale issue, give Harvard University an opportunity to be heard and then hear from the tenants. The city's goal is to preserve the affordable housing stock and ensure long-term affordability. The City can work with the state on any aspects of housing and/or on the sale of 2 Mt. Auburn Street. Harvard is having its own meeting and CEOC will be holding a meeting on this issue for tenants. Tenants are represented by ACT. Tenants have a strong voice to discuss conditions for the sale.
Mr. Murphy presented information on 2 Mt. Auburn Street. Harvard University is the owner of 2 Mt. Auburn Street and is in process of selling the building to a select few buyers to preserve affordable housing. The City has met with Harvard to ensure maximum affordability. The building has a variance and it goes with the building. The first offer has 90 days before other offers are entertained. Harvard University has committed that the building be preserved for housing.
Chris Cotter, Housing Director, stated that HRI is looking at the building under the 40T statute. HRI has the first offer on the property. Councillor Decker stated that the state has designated HRI to be the affordable housing representative.
Tom Lucey, Harvard University, stated that Harvard is considering selling the building conditioned on affordable housing and the rent calculations will be the same. Harvard University is glad to have a public forum such as this with the City on affordable housing issues. He stated that there are 600 affordable units that have been preserved. Harvard University is seeking a preservation transaction on 2 Mt. Auburn Street. He introduced Leslie Bos, Recap Advisors, advising federal agencies on preservation of affordable housing.
Councillor Decker asked why Harvard University is selling 2 Mt. Auburn Street. Mr. Lucey replied that Harvard University's focus is teaching and is an institution of higher learning. Two Mt. Auburn Street has never been seen as university housing. Councillor Decker asked what Harvard University is trying to sell it for. Mr. Lucey responded that there is a range rather than a specific selling price. Councillor Decker asked how Harvard University places a value on housing with a variance attached. She further stated that Harvard University was given a variance to build this building and it was conditioned to house seniors at affordable rents. The City understands that the variance requires that housing be provided for low-income seniors. She stated that the city's legal opinion regarding the variances will be communicated to buyers.
What net gain is Harvard University seeking? Mr. Lucey informed the committee that Harvard University will inform potential buyers about the variance. Councillor Decker asked what the long-term guarantee is. Mr. Johnston, CHA, would look for extension of the contract of 15 years with a 3 -5 year extension for a total of 30 years.
Councillor Decker asked Ms. Bos is Harvard University committed to renewal of the Section 8 contract with the 30 year extension of the contract. She asked is the Section 8 or the end of the 30 year terms being discussed. She stated that HRI has first right of refusal to purchase the property then the process is opened to others for purchase. Potential buyers need to know about the variance information on this property. Ms. Bos stated that some invitees are not-for-profit developers. Harvard University will not continue the PILOT. The new buyer will be required to pay taxes on the property. Councillor Decker questioned who at Harvard is saying that this property must be sold? Whose decision is it to sell this property? It is her desire that Harvard not sell this building. With the stress, the uncertainty and the financial conditions today it is unnecessary to put the City through this conversation. The best place for this building is under Harvard's ownership. Harvard will always see this as a low-income housing property and Harvard is walking away from low-income housing for seniors. Harvard is not being viewed as a good corporate citizen in this matter. Mr. Lucey stated that this information will be brought back to Harvard as well as the confidence shown for Harvard's management of the property.
Councillor Decker asked if there is a plan to donate the profit from the sale of this property to the Affordable Housing Trust. If sold all profits should go to the Affordable Housing Trust.
Vice Mayor Simmons commented that people are worried about their housing. She wants to be talking to the people at Harvard who are the decision makers. Transparency for the City Council and the residents is important. It is important to state that this building is affordable senior housing. She asked about the viability of Section 8 vouchers are a sound premise to go forward with the sale. Mr. Johnston stated Section 8 is a federal program subject to appropriations. The Section 8 is the largest program managed by HUD. To date the Section 8 funding has not affected. Two Mt. Auburn Street was part of the 10C Program and HUD could not continue the financing. This is the last 10C project. There is a pledge from CHA to work with project based owners to keep them as whole as possible if budget cuts occur. Vice Mayor Simmons asked if the sale is definite and is there a certain date. She requested specificity if this property is disposed. Mr. Lucey stated that it is Harvard's intention to sell the property, however it could be put on hold. Ms. Bos commented that the final notice of the sale and the affordability restrictions are coming to an end. Harvard must notify the residents of their intention to sell. The final notice of the intention was issued on October 10, 2012. Under 40T HRI has 90 days to respond as the preferred buyer. Vice Mayor Simmons stated that it is incumbent on Harvard to be a good institutional corporate partner and to make sure that residents remain whole and to dispose of property to an entity such as HRI. She is disappointed about this sale. Mr. Lucey spoke about the notification process. He stated that he personally called the entire City Council and key City staff about the proposal to sell 2 Mt. Auburn Street.
Councillor Decker told the residents that their homes will remain affordable. She is more concerned that Harvard wants to sell the building. Harvard does not need a profit. She wanted a full assessment of the building; it needs care. Her first position on this matter is not to sell the property. She does not know anyone but Harvard who can own and maintain the building and the rents in perpetuity. Non-profits worry about losing money for maintaining their properties. Harvard wants to disposes itself from the property and walk away from seniors. Non-profits will have to negotiate with Harvard for the upkeep and maintenance on this property. She would like prior to sale that the City understands what upkeep is needed and that Harvard do the necessary repairs. She wants all the profits on this building to go to Affordable Housing Trust.
Mr. Daly, HRI, in response to a question from Councillor Decker, stated that HRI is happy to be the state 40T designee. HRI has a long working relationship with Harvard and the CHA. It is an advantage to get a local non-profit to manage the property at 2 Mt. Auburn Street. The issue is the capital needs. The assessment of the property will have an impact on what HRI can offer for the property. The downfall to 40T is that a confidentiality clause must be signed. HRI cannot have conversation with the tenants under 40T. Councillor Decker asked when the building would be assessed. Mr. Daly stated that it will take 90 days to get what the costs are. Councillor Decker suggested that Harvard sell the building for $1.00. Harvard has no business making money from low-income senior housing. She stated that she would schedule a second hearing on this matter. Councillor Kelley stated that he agreed with Councillor Decker on why sell the building and that non-profits should buy with creative financing that may impact the rents. If Harvard has missions that it no longer wants to do Harvard should inform the City Council.
Councillor vanBeuzekom informed the committee that she did receive a call from Mr. Lucey on this issue. She felt it would be ideal not to sell the building or to sell at a modest cost.
Eurene Lasley, 2 Mt. Auburn Street, stated that she is concerned about the sale. She questioned why Harvard was selling this property while it is purchasing property throughout the state. If Harvard does not want to maintain a senior building, why not turn it over to tenants. She wanted to know if Section 8 vouchers would be maintained if there is a new owner. She hopes tenants will be informed of decisions made.
Isabel Tellen, 2 Mt. Auburn Street, stated that she was grateful to City for senior housing. If Section 8 disappears next year what happens. She requested that maintaining Section 8 vouchers be in writing.
John vanSaun, representing the tenants at 2 Mt. Auburn Street, spoke about receiving notice 20 days ago from Harvard about their intention to sell the building. He has been organizing the tenants. He agreed with Councillor Decker. He stated that 2 MT. Auburn Street is Harvard's commitment to the Riverside community. At a meeting held on November 7, 2009 at Harvard it was stated that Harvard has no commitment to this building. He stated that Harvard was reprimanded by the State Office of Housing that the tenants should have been given a one year notice. He disagrees with the statement that Harvard has a commitment to affordable housing. He wanted the deed restriction to be added to the recorded deed. He submitted a communication
Richard Wadman, 2 Mt. Auburn Street, stated that tenants were surprised with the notice and that there was no participation from the residents at the Putnam Apartments. The tenants are required to be given a 30 day notice. He felt another approach should be taken such as Harvard's reputation has grown with what was done for the seniors. He suggested that Harvard have students live in the building and work with the seniors.
Louise Phelan, 2 Mt. Auburn Street, spoke about the environmental and emotional concern. Where will you be living in ten years from today with the economic uncertainty? Think deeply on this on this matter.
Robert LaTremouille, 875 Massachusetts Avenue, stated his concerns about this building being taken off subsidized market and added to Harvard affiliates. He is happy to see Harvard get rid of the property. This building was built to expand Harvard's campus. He hopes the City buys the building.
Bob Chamberlin, 2 Mt. Auburn Street, stated that it is important to bring 2 Mt. Auburn Street up to tolerability conditions. This would cost $2 million. The elevators are antique and dangerous. It is a joke to prospective buyers to buy the property and to make a profit. There are bedbug and mice at 2 Mt. Auburn Street. Some units are not up to HUD standards.
Mr. Cotter stated that the Section 8 contract applies to 94 units and runs to September 2013. Harvard will discuss with CHA continuing the contract and will include 94 units. Only change will be in the tenant selection. Ms. Bos added that the intention is to renew the Section 8 vouchers at all cost. Mike Johnston, CHA committed to all 94 units. The CHA would require 13 ½ ratio for younger disabled tenants.