Citizens who are concerned about Harvard getting a fair deal from Mass. Housing Opportunities Corp. were disturbed by the testimony at the last Zoning Board of Appeals meeting about the developer’s sudden change from a nonprofit to a for-profit developer. Adam Costa, an attorney representing the developer, testified that the company never said that it wouldn’t change to a for-profit company when receiving the comprehensive permit, inferring that we shouldn’t have been surprised. But why would anyone in town have expected that action when they have presented themselves for the last two years as a nonprofit developer? Even Selectman Lucy Wallace, chairwoman of the Harvard Housing Partnership, was quoted recently in the newspapers saying that it was fine for Harvard to work with them on a local initiative project because they are a 501(c)(4), the IRS designation for a charitable, nonprofit organization.
Costa also said that his company never offered more than 25 percent affordable units, so why should citizens expect that kind of a deal now? First, we should expect it because they are a charitable nonprofit and they provided information about the resultant benefits that anyone could read on their website. Second, a member of the housing partnership, recently told me that she was in a meeting with the developer in the early stages of its application where its nonprofit status was discussed and the possibility of more than 25 percent affordable units was mentioned. This corroborates the evidence we presented to the ZBA about what the town should expect from the developer—either more affordable units or a significant share of the profits.
The statements made at the ZBA meeting by company officers concerning their nonprofit status were obfuscating, misleading, and, in some instances, wrong. Michael Ivas, a company vice president, said that we shouldn’t expect more than 25 percent affordable units because that would require a higher density project and the town didn’t want higher density. This is false. It would not require a higher density project. With the current 32-unit plan with 25 percent affordable, they are showing a profit of more than $1.2 million on their pro forma statements. As a charitable nonprofit developer, they only need to retain a small profit to stay solvent. If they retained $200,000, that would leave over $1 million to subsidize several more units as affordable. Or, they could give the $1 million to the town to use for our affordable housing program. Both actions are consistent with a charitable nonprofit engaged in affordable housing programs.
Mr. Ivas also said that he could have put a maximum of 108 units on a site the size of the Ayer Road property, but conceded to the town’s wishes for a smaller project. This is also false. The Planning Board has raised concerns about the problems with this site from the beginning, and recently reiterated those concerns in a letter to the Conservation Commission. Mary Essary, chairwoman of the Planning Board, was at the ZBA meeting to discuss those concerns once again. Sandra Brock, engineering consultant to the ZBA and the Conservation Commission, said at the ZBA meeting that the 32-unit project was technically doable, but “tight’ for that site. There could be pitfalls during construction. Paul Willard, chairman of the commission, also expressed concerns about the plan to put the project’s well first in the wetlands, now in the buffer zone.
The conclusion, in spite of statements to the contrary, is that Harvard did not receive a concession by having the project go from 108 or 44 units to 32 units. A higher density is not possible for that site, and, in fact, from the testimony of the various town regulatory boards, having 32 units is marginal. Being professionals, the developers would have recognized the site’s limitations early in the process.
Mr. Ivas and Gerard Welch, president of Mass. Housing Opportunities, made some other statements about the nonprofit status that the evidence refutes. Mr. Ivas said that the original reason for incorporating the company as a nonprofit was to allow them to work on projects with HUD grants. Without a HUD grant, he said, they couldn’t operate as a nonprofit. The evidence shows that this is not the case. The developer’s articles of organization do not mention limiting their work to HUD grants. The Boston Globe article, available on the developer’s website, doesn’t mention the need for HUD grants as a condition for working with towns to develop affordable housing programs as a charitable nonprofit.
Mr. Welch was asked by the ZBA if the developer had done any projects as a nonprofit and he replied that they only did one as a “quasi” nonprofit for the town of Methuen. However, they did a recent 40B project for the town of Sterling. The developer formed a company, MHOC-Sterling, to take the comprehensive permit, which they did—as a nonprofit, according to their articles of organization.
Given these facts, the question has to be asked: during the negotiations, why didn’t the housing partnership and the ZBA request and receive more than 25 percent affordable units or an equivalent share of the profits? If they didn’t pursue that course of action to a positive conclusion, as one of them told me, then “shame on us.”
In summary, the evidence shows clearly that the development company was formed as a charitable, nonprofit corporation. The company presented itself to Harvard as charitable and not-for-profit and provided information on their website about the benefits we should expect, and at least one member of the housing partnership remembers a meeting where that was discussed.
It certainly sounds like Harvard was and is being misled by this company and that it is now up to town officials to rectify the situation. It is time to hire specialized legal counsel to resolve this matter. Over $1 million for the town’s affordable housing program is at stake.
