Members of the Board of Selectmen, Planning Board, and Master Plan Steering Committee joined with the Devens Economic Analysis Team last Wednesday, Aug. 31, in a meeting that became a brainstorming session on how to suggest a solution for redevelopment of Vicksburg Square that addresses Harvard's needs.
“We can accept a change in zoning to residential over there, but in looking into this issue, our needs are different than what Trinity is proposing.”
Steve Finnegan
Board of Selectmen members Marie Sobalvarro and Ron Ricci, Planning Board member Michelle Catalina, School Committee member Patty Wenger, and Master Plan Steering Committee member Lucy Wallace attended the meeting and, with their interests spurring conversation, the discussion of the economics of Devens and of Vicksburg Square widened to include social and political topics implied by "the numbers."
Until the Aug. 31 meeting, the Devens Economic Advisory Team had used an almost exclusively economic lens to analyze the Trinity Financial proposal for redevelopment of the historic Vicksburg Square site, focusing on, for example, uniform estimates of school-aged children who will occupy the site, state formulas for tax revenues that will be generated by the site, and the financial and regulatory mechanics of how a developer uses state and federal tax subsidies to finance low-income housing developments like the one Trinity is proposing for Vicksburg Square. Those discussions didn't fully address broader issues such as the integrity of the community living at Devens, how the Harvard school system might support additional children from Devens, how tax revenue from Devens would cover the expenses of the development, how maintenance of the buildings over time would be managed, or quality of life issues like senior services costs for Vicksburg Square residents.
DEAT member Paul Green commented at the meeting last Wednesday that Trinity's president, Jim Keefe, indicated he was unaware that a frequently-discussed topic at meetings of the Joint Boards of Selectmen and other public meetings has been that the people currently living on Devens want to maintain the integrity of their community in a single municipality, whether it's Harvard or Ayer, or as a new town of Devens.
DEAT Chair Victor Normand commented that the concept of Devens as a town is lost on Trinity and asked, "what happens when they go away… 51 percent of housing would be affordable?"
Wallace then asked, "Are they [Trinity] looking at senior services or just education?"
Normand said, "Keefe says they can clearly fill this project, but the question is whether there is a connection between the Trinity proposal for development of Vicksburg Square and the redevelopment of Devens as central to the communities surrounding it."
Eventually the group seemed to conclude that the current model from Trinity for all-rental and 80 percent affordable units would not work for Harvard because of financial factors (it wouldn't pay its way in tax revenues) and because concentrating a large number of affordable housing units in an isolated exurban location like Devens is not good planning practice.
Wallace also said she was concerned about the model being weighted to affordable units and asked how they would be maintained when major repairs were eventually needed. Ricci explained that, while Trinity owns units, its debt service is extremely low and depressed by tax credits. Sometime before Trinity's 30-year contract on the buildings expires, a new developer could buy the project and reuse the same tax credits based on a new pool of investors; tax credits could then be used for another period of time by the new developer, Ricci said. So the answer to Wallace's question, according to Ricci, is that major maintenance and renovation would occur for the project at its repurchase by a new developer.
Normand also explained that the tax credits, for example historic tax credits, are "cashed up front, so, for Vicksburg Square at a valuation of $83 million, the developer will get 20 percent [or approximately $16 million] when the building is certified on day one."
The same practice applies to credits for home affordable trust funds, housing stabilization funds, and other financial devices.
Normand then brought the conversation back to the numbers, asking the group to look at the summary of the problem. He said, "There will be 246 units and 598 people, including 99 children (18 and younger) and 499 adults at build-out, and Trinity's proposal doesn't generate the revenue required to educate the children."
Normand asked the group to "look at Vicksburg Square as another model, 'for-sale housing,' because it is valued by the state as 'best use.'"
That is, Normand explained, if the property is valued for sale at $400,000, the assessor will value it as $400,000 and the tax revenue generated by the property will go up proportionately. Normand calculated that in an ownership model, an average market rate unit would cost $385,000 based on an average number of bedrooms, $96,500 median income, and 80 percent or less of median income for affordable units, and estimated that tax revenue from the project would jump to $1.1 million.
Normand, seeking to lend flexibility during the lead up to the super town meeting (in which residents of Ayer, Harvard, and Shirley vote on the same warrant article at the same time) that would be required to make changes to the reuse plan and zoning at Devens, said "the 25 percent remains the same [zoning for affordable housing at Devens is set at 25 percent]. It's reasonable and well thought out. Let them [Trinity and MassDevelopment ] figure out how to do it, but include a mix of ownership and rental ."
Normand said, "The compelling reason for doing it now is not affordable housing. There is a backlog of projects looking for low-income-housing tax credits; they will get used. The question is historic preservation. MassDevelopment has an obligation to protect those buildings under agreements with the Massachusetts Historic Commission and the Army, so it's cheaper for them to fix the roofs and board up the windows than it is to educate the kids that will live there. So from an economic perspective, delaying this project for some period of time, two years, five years, seven years, zoned residential, 25 percent affordable ...let all developers compete to do that, it's a sunk cost. The buildings are debt free, there is potentially no acquisition cost for a developer, and there's a way to get out from under the high cost of prevailing wage."
DEAT member Steve Finnegan agreed, explaining that, "We can accept a change in zoning to residential over there, but in looking into this issue, our needs are different than what Trinity is proposing."
Green went on to suggest that the problem be broken into smaller parts that could be dealt with separately, perhaps in a series of town meetings before the super town meeting to get a non-binding sense of how Harvard residents feel.
Finnegan explained that, "They are asking us to answer three questions: zoning, long-term jurisdiction, and this development plan. It might be possible to separate these. Such an approach would enable a change of the Vicksburg Square buildings to residential zoning, but would maintain the reuse plan intact, still calling for 25 percent affordable housing."
The Devens Economic Analysis Team is scheduled to present its report to the Board of Selectmen on Sept. 20, and Normand is writing a draft report for review at meetings on Sept. 7 and Sept. 14. He said the report will be structured around the mandate given by the parent boards to project revenue from Devens, present demographic data as it relates to impact on schools, estimate costs for all other services, and anticipate demand for housing, present and future.