Bank issues 150-day foreclosure notice
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| Great Elms on Stow Road is one of only two buildings in town that offer affordable housing units for families as defined by the state. (Photo by Lisa Aciukewicz) |
Plans to hire a consultant to create a rescue plan for the town historic properties that offer the only affordable rental apartments for families in Harvard have faltered as the consultant and the Harvard Municipal Affordable Housing Trust could not come to terms on a contract.
Meanwhile, North Middlesex Savings Bank, which holds a single $240,000 mortgage on the two properties, has sent the first warning notice of foreclosure.
"State law says we must give a 150-day notice before beginning proceedings," said the bank's president, William Marshall, on Tuesday. "We are working with [the mortgagees]. Unfortunately, we have to start the legal process to protect our business interests."
Last month, the Municipal Affordable Housing Trust voted to hire consultant Dan Violi to create plans for preserving the units' affordability and maintaining them into the future. The aging properties—Great Elms on Stow Road and The Inn on Fairbank Street—need extensive renovation that could cost between $1.5 and $1.8 million, according to the owners, a non-profit, wholly separate subsidiary of the Harvard Conservation Trust.
But last week, Ron Ricci—the Board of Selectmen's liaison to the Municipal Affordable Housing Trust—said in an email that the consultant "was not interested" and that the housing trust would "find someone else."
Wade Holtzman, chairman of the housing trust, said in an email to the Press that the consultant's terms for the last-minute contract could not be met, in accordance with the state's fair bidding and procurement laws. The Municipal Affordable Housing Trust is exempt from many, but not all, of that law's provisions. Harvard's finance director, Lorraine Leonard, confirmed that the housing trust could not write a contract in excess of $5,000 without following a time-consuming bidding process.
Maria Kaufmann, president of the Harvard League of Women Voters, urged the town to take an interest in the affordable units at a September meeting of Selectmen. This week, she told the Press that the league's position is one of support for affordable rentals in Harvard. She said the league might consider offering a loan while the town "sorted out its funding mechanisms," if law allows and if league members approved the action by vote. Kaufman said she wants to know more.
"[We] can't help if we don't know what's needed," she said this week.
Victor Normand, president of the non-profit group that owns the properties, said his group had been working for two years with the state Department of Housing and Community Development to save the nine affordable units.
"There are two other consultants on the list, recommended by the department of housing," he said this week, praising Ricci's efforts in coordinating the consultant's hire, despite the recent setback. He said the housing trust was "in a position" to take the lead and should do so.
The Harvard Municipal Affordable Housing Trust's assets are worth about $521,000, with $200,000 committed in the form of loan, to be paid in installments, to the developer of the Bowers Brook affordable, over-55 apartments, which is under construction behind the Dunkin' Donuts on Ayer Road. The zero interest, 30-year loan to developer Lou Russo replaces the grant that had initially been given to the developer. Russo's main financing mechanism, through Low Income Tax Credit financing, prohibited the grant but allowed a loan.
Marshall confirmed this week that North Middlesex Savings Bank has recently appraised The Inn and Great Elms.
"We are well secured in our position," Marshall said, declining to reveal the appraisal values.
The town's appraised value of Great Elms is $267,900, while The Inn's is $168,900. The valuation includes land and buildings.
"There is still some flexibility," said Marshall, when asked about the timeline for actual foreclosure procedures. Marshall, who said he thought the consultant had already been hired, said it was a meaningful step. "It means a lot because it sets the wheels in motion" for a potential solution, he said.
Marshall said he hopes that the properties could be kept affordable.
"I hope this [foreclosure warning notice] has moved the town to pay attention and take action," he said.
Because both properties are state-sanctioned affordable units, the state provides help to residents who may be displaced, including financial compensation and a list of alternative lodgings.
Reporter's note: The Great Elms property referred to in this article as in danger of foreclosure refers only to the buildings and the four-acre parcel they occupy. Conservation land abutting the parcel is separately owned and remains unaffected.