2007-03-22-AC-min - Laserfiche WebLink

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March 22, 2007 SLI will end up with mortgage on the land of approximately $600,000 from Brookline Savings Bank, which will require annual payments of $67,000. SLI is required to have a budget but does not make a profit. SLI operates in Woburn and North Reading and does not pay taxes or payments in lieu of taxes (PILOTs) in those towns, but does not intend to seek tax-exempt status in Lexington and, therefore, has budgeted a tax payment. The project is also financed by an allocation from the state of low-income tax credits of around $160,000; SLI would establish a limited partnership or LLC to own the building and the investors in the LP or LLC would then receive the tax credits for 15 years. The deed on the property will say that it must be affordable housing “forever,” and SLI would be required by HUD to not sell the property for 40 years. Rachel commented that almost all affordable housing projects like this are currently being developed in this manner. SLI faces a financing gap of $300,000 vs. its original estimate and hopes to begin construction in May 2007. SLI estimates that it would initially pay $16,000 annually in taxes, a payment which implies an assessed value of $695K. Rob Addelson commented that once the project is developed the property taxes would be calculated on an income basis, which would result in a much lower tax payment. At the Committee’s request, SLI will send the Committee (1) a copy of the letter agreement stating that SLI will not seek tax exempt status for Douglas House, and explaining the duration of that commitment; and (2) a copy of SLI’s budget for the project. Dawn McKenna stated that the Town has subsidized projects like this before and that she believes the project represents a good way to leverage the Town’s dollars since the Town would not be able to create affordable housing units for $20,000/unit. The Committee voted 5-0-3 to support the project with the understanding that the Committee will receive the two items requested from SLI. The Committee then discussed other articles of the 2007 Town Meeting warrant: 31a – currently at $400,000, though could end up being 15% higher. 31b – Committee approved 8-0-0. 31d – Committee approved 7-1-0. 31j – Rob Addelson will come back to the Committee with more information on what these funds are being used for in FY07 and further clarification. 31k – Committee approved 8-0-0. 31m – Committee approved 7-1-0. The meeting was adjourned at 10:30 PM. Respectfully submitted, Mike Kennealy Approved June 21, 2007 - 2 -