BY MARIA BROWNSELL
Tuesday night, Clarkstown had a workshop meeting packed to the brim with residents. The main purpose of that meeting was for a discussion to take place about the possible sale of the Middlewood Senior Complex. The understanding was that it would be an opportunity for questions to be answered about different directions the town could go with the property. It was also for town residents to express their concerns and for Middlewood seniors to have their questions answered.
The mortgage for Middlewood is almost up and the town was approached about a year and a half ago by prospective buyers. The town only owns the property by chance, after a carpenters union tanked and the deed was transferred to the town forty years ago. Last year the board members unanimously decided to explore options on what to do with the property, whether they were to keep it as is or to sell it. As Supervisor Gromack has reiterated meeting after meeting the town’s main criteria for whatever is to be done involves making sure the complex remains senior housing, that it stays affordable through HUD, and that rents would not change.
For the discussion, the town board brought in HUD expert Deborah Anderson from Nixon-Peabody and Robert Wilder, Jr. from Wilder Balter Partners Inc., which is the main contender if the property is to be sold.
Councilman Frank Borelli asked Anderson if the town could actually do the sale themselves without having a consultant or outside firm. She explained that a partnership sale will help access some tools not available to the town, like getting low income tax credits that could be used to rehab the property. Basically the town couldn’t do it themselves.
Councilman George Hoehmann asked about a cash flow projection with the town keeping the property versus having an equity partner, but keeping the town with majority control. If the town kept the property, they couldn’t permanently get more money from HUD, but they could temporarily get more money if they had an assessment done showing the property needed work done. If the town entered a limited equity partnership, the partner could access tax credits and could also keep a marked up rent rate that HUD would pay. Either way, the money that the seniors would pay would not be affected.
There are no rules for a partnership except for whatever is set by the two agreeing parties, explained Anderson. They are completely subject to negotiations, but the investor gets 99% ownership and the partner, which is the town, gets 1%. She explained that an investor never wants to actually control what is going on in the property, so that 1% that the partner has can have as much or as little control as is decided previously.
“It’s always a public-private partnership,” said Wilder. “It’s never an outright sale. Yes we are a private developer, but it’s a pubic-private partnership.” He went on to explain that by entering this partnership, they would be “making the pie bigger.” Wilder Balter Partners Inc. would pay the town an agreed upon amount of money, possibly 6 million dollars or more, and then would increase the part of the rent that HUD pays. They money would grow from there.
Wilder Balter Partners Inc. owns and manages 3500 units from Suffolk County to Saratoga County. They’ve been doing this for 35 years. They do the financial aspect, the construction, the management, the rehab and anything else required. Wilder explained that hiring a straight consultant isn’t the same because they don’t have all the specific skills needed to get everything done.
“You will own is for 50 years and then give us the option to buy is back for $1,” said Hoehmann. He asked what would be the town’s influence on the property at that point with only having 1%.
Balter said it is the controlling 1% and the town’s responsibilities would be what they wanted them to be. They couldn’t just go back on their word and back out of any part of their agreement with the town because it isn’t just the town that is receiving the promises. They would be entering agreements with several different entities, such as HUD, bonding agencies and more. HUD has a 20 year contract. Tax credits require at least 30 years. They would be locked in. There would be a deed restriction if somehow the property was sold that would require everything to remain the same.
Hoehmann reported that Middlewood is currently putting out $400,000 a year in cash flow, Councilwoman Shirley Lasker pointed out that the town cannot take that money to use for whatever purpose they choose.
“It can only be used for corporate purposes,” said Anderson. If the HDFC changes its agreement in the future, it could be changed to allow for other things, such as a reinvestment in additional housing. The money could never be used for other projects around the town like paving, said Lasker.
Lasker asked how Wilder Balter Partners Inc. could make the seniors living conditions better than the town could do themselves. Gary Friedman of Wilder Balter talked about the community center being the first place to get improvements, with a gym, elevator and more. They want to change over the electric heat to gas heat, and to upgrade the bathrooms.
After about two hours of Hoehmann asking and re-asking questions, with a few other council members sprinkled throughout, the public finally had time to ask.
“Keep it our land, in our town,” shouted a citizen.
“I totally disagree. What do we know about running this?” shouted another.
“We live in Middlewood and Clarkstown is doing a good job. Don’t sell it,” said another.
After only about 10 minutes, Hoehmann once again took over asking more questions that seemed very familiar from the prior hours.
“No decision is about to be made. We don’t have enough information,” said Gromack. “I am not in any position to make a decision on any of these options tonight.”