Wednesday, January 30 2013
Benfield developer requests tax agreement
by Cecile Sandwen
Whereas most property in Carlisle is taxed on a market value, the Benfield developer has asked for an income-based approach for the as-yet-unbuilt Benfield Farms affordable senior housing. This is because affordability restrictions will limit rental income, and thus ability to pay taxes. All 26 units must be affordable. The Carlisle Board of Assessors (BOA) agree that the income method is reasonable, but will be reviewing the numbers carefully.
The Neighborhood of Affordable Housing (NOAH) will be the developer and manager of the affordable senior housing and has submitted a letter dated January 7 to the BOA requesting a preliminary tax determination. The letter is required in order to obtain financing, and would show that the town is in agreement on the methodology even though a determination of value cannot be finalized until the project is completed.
Based on the results from other towns, NOAH has projected income and expenses for the first stable year and proposed a value for FY15 of $1,313,013. A memo from Assessor Melissa Stamps indicated that at this level, estimated taxes would be $23,214 and the CPA surcharge at 2% would be $429.
It may surprise some that NOAH, a non-profit, would be paying taxes. A subsidiary for-profit, Benfield Farms Limited Partnership, will be the owner of Benfield in order to take advantage of low-income housing financing programs. As a result, the property will be taxable.
BOA Chair Jim Marchant said that he met with NOAH on January 28, and there are some issues still to be resolved. Marchant said that any agreement now could be changed once actual income and expenses are known. He noted, however, that there is currently no similar taxed entity in Carlisle, as Village Court is a non-profit. The board is conscious of the precedent that could be set for any future 40B projects.
The letter from NOAH also proposes enhanced services in lieu of taxes. A residential service coordinator would provide for “senior activities and needs that can assist tenants in the building and participant seniors in town.” Marchant noted that this and any other proposals will considered. He expects a letter outlining the agreement to be issued next week. NOAH hopes to complete financing and begin construction in the spring.
Loans announced
On January 17, The Community Economic Development Assistance Corporation (CEDAC) announced it will be providing loans in the amount of $514,000 for the project. “We are always thrilled to see progress in affordable housing production projects that help those in need,” said Roger Herzog, executive director of CEDAC. “The Benfield Farms project in Carlisle will provide local seniors in need with access to quality, affordable homes that will facilitate independent living.” The announcement noted this “will help build housing options in a region that lags behind other parts of the state when it comes to affordable housing.” ∆