A review of Housing Resources' activity thus far

NORTH EAST — Attorney to the Town Warren Replansky told the Town Board  his concerns about the Millerton Overlook affordable housing project at its March 11 meeting. The Town Board had asked Replansky to review all of the information he had on the project since its inception in 2005 at its meeting last month.

Securing funds

He confirmed the town of North East applied for the block grant with Dutchess County, for the stated site, for the affordable housing project in the ‘90s initially, and then again in the 2000s. The town invited Housing Resources in to plan and construct, and later manage, the affordable housing complex.

In 2004 the county approved the block grant for 22 units; it awarded $100,000 for the acquisition cost of the property and $8,000 for the closing costs.

“We [the town] were the conduit,� Replansky said. “They were county funds, not town funds.�

He further clarified that the money was given to Housing Resources to be used for the acquisition of the property and that the money was secured by a mortgage; the town holds the first note on that $108,000 mortgage on the property.

The purpose of that was for the town to have some control over the project to make sure Housing Resources built affordable housing; after 30 years that note would be forgiven. There were, however, certain requirements that were set forth when that note was written.

Timing

Those conditions included that construction would be completed in 2007. Clearly, that has not happened. Housing Resources claims it took much longer to go through the approval process, which started with the Zoning Board of Appeals (ZBA) and then switched over to the Planning Board.

“So I’m sorting out who’s to blame and why the delay, and it’s a difficult thing to determine,� Replansky said, explaining that there are options available to the town if it’s tired of the delays. “The town, if it were to declare the application in default, would then have to foreclose on the property.�

If that were to happen, then the $108,000 would have to be reimbursed to the county. The town would be liable for the legal fees, and if it did recover any funds they would have to be paid over to the county. Replansky said he could go into further detail, but it would have to be in a closed-door executive session.

As far as the county  goes, there is no time frame on the project, which can be long and complicated. The county, therefore, will use a reasonableness standard and set Aug. 31, 2010 (five years after the original completion date) to decide if the project should move forward.

“They would expect us to make a determination,� Replansky said. “It’s not an easy determination you have to grapple with. The reasonableness standard is not only for the county, but for all litigation.�

Replansky explained that the town does not have to go into foreclosure on the property and that it can still expect the project to develop and improve the property at some point. Also, if the note is called now, the town does not have to pay anything besides the legal fees if there’s a first mortgage, it just has to sell the site at a foreclosure sale.

The numbers

“We’re a second lean,� the attorney said. “We’re subordinated to Enterprise Housing Financial. They’ve taken out $400,000 at this point, so it would have to sell for $500,000-something.�

“I felt it would be resolved through the planning process and had faith in the Planning Board as issues came up,� town Supervisor Dave Sherman said. “But I am concerned about the financial stability and the financial resources available to Housing Resources. I would like them to present something to this board about their ability to be able to do that. They’ve go many irons in the fire. I wouldn’t want to say OK and give them more time without seeing proof.�

“I would agree, and if you do extend them time I would say only do so after we sit down with Housing Resources and talk about how they plan to fund things and move forward,� Replansky said. “The project will survive not based on Housing Resources’ financial ability but on the income and substance of the project itself.�

“The whole thing just stinks to me,� Councilman Steve Merwin said.

“They have no assets as far as I can see,â€� said local attorney Robert Trotta. “The one thing that concerns me is they managed to get ahead of us by a $400,000 mortgage. I’ve taken a look at the plans and have some sense of what they’re paying attorneys and architects and there may  be real wasting.â€�

“They actually claim they spent $700,000,� Replansky said. “I think they have some explaining to do.�

“They have to explain if they’ve spent reasonably and legitimately on this project,� Trotta said.

“We have no way to track where that money was spent,â€� Replansky responded. “I would agree there has to be a lot of explanation from Housing Resources. It’s a matter of  good faith. The $108,000 was certainly spent on acquisition costs.â€�

Wetlands buffer zone

He then asked village Planning Board member Lance Middlebrook, who was in the audience, if a 300-foot buffer zone around the site’s wetlands was adopted at the previous night’s Planning Board’s meeting. It was. Replansky said because of that he wasn’t even sure if the project was still viable.

“I do recommend that there be a sit-down meeting and I would like to invite the county to that,� he said. “I think once you get all that information you’ll make a better decision.�

Time line

Councilman Carl Stahovec asked what happens with the county’s deadline of Aug. 31, 2010. He was told that it’s not a deadline, but a suggestion, and the project can always go into default. Replansky also said if the Planning Board makes a determination of a positive declaration for the Environmental Assessment Form (EAF), it would “add significant amounts of time and money to the project.� He also said it would be wise to ask for an accounting of all monies.

Merwin then said he wanted to vote on discontinuing the extension, even though it’s been withdrawn already. The rest of the board,  however, explained to him that there was no need to do so, as it was withdrawn and the point was moot.

“It’s on record that we received a letter from them canceling their request for an extension,� Sherman said.

“I think it’s probably best to wait until your next meeting to see what’s going to happen,� Replansky said.

“The next meeting is going to be the end of it,� Merwin said. “That’s what I say.�

During Replansky’s investigation he spoke with Housing Resources Executive Director Kevin O’Neill, its attorney, Scott Longstreet, village engineer Paul McCreary and village attorney Michael Hayes, although he had not been successful in reaching village Planning Board Chair Greg Lanphear, who is planning on resigning from the board at the beginning of April. Replansky also spoke with Jennifer VanTuyl, the previous land use attorney who guided the village’s zoning board at the inception of the project.

He also communicated with the Dutchess County Department of Planning and Development to determine what responsibilities  the town has regarding the Community Development Block Grant (CDBG), which provided the funds to purchase the property at the intersection of routes 22 and 44 (North Elm Street) where the project site is located.

The attorney said he also got additional information from real estate appraisals and town of Copake water and sewer bills (regarding other Housing Resources properties).

The village Planning Board held a meeting on Housing Resources’ environmental review for the Millerton Overlook project on the previous night, Wednesday, March 10. For the full story on that meeting turn to page A1.