Greenburgh taxpayers can look forward to an infusion of revenue from the county’s WestHELP complex following Tuesday’s action by the Town Board, with the panel choosing a Connecticut company that has promised the municipality $500,000 a year over the next 18 years.
The action will bring to the rental housing market, for tenants aged 55 and older, 108 one-bedroom apartments on the campus of Westchester Community College, which will rent for about $1,100 a month.
“There are lots of seniors in the area looking for smaller one-bedroom apartments,” said Richard Harris, of MRH Group, LLC, which will invest $2 million in renovating the units that served homeless families for 20 years.
The renovation will include a door to the bedroom alcove, doors on apartment closets, and renovated kitchens..
Harris pledged to take down the barbed wire that surrounds the former homeless complex, known as WestHELP.
“The barbed wire is coming out,” he said. “We are going to fix up the apartments, repaint it nicely, and really trim up the landscaping. It will be nice for tenants to hang out there.”
The decision by the Town Board today ended more than a year of debate over the future of the former homeless complex, which has remained vacant for close to two years as the town debated how best to cash in on its decision in 1990 to allow Andrew Cuomo’s HELP organization to create a transitional housing complex for the homeless.
The agreement gave Greenburgh the permission to rent the apartments to low- and moderate income tenants until 2032.
But the town and Westchester County had promoted a plan by Ferncliff Manor for the Retarded, of Yonkers, which would have razed the housing for Ferncliff’s residential school. The Cuomo administration last month rejected that Ferncliff proposal, opening the door for the affordable housing plan contemplated by county and town leaders, and Cuomo, more than two decades ago.
The Town Board chose Group MRH, a Greenwich-based company, which will partner with one of the nation’s top affordable-housing companies, the Richman Group. For $120,000 a year, Richman will help Group MRH “manage the paperwork involved in dealing with the rules and regulations of affordable housing,” according to its submission to the town.
In November, 2012, the MRH-Richman Group proposal called for giving the town $100,000 a year for a project that included WestHELP’s 108 efficiency apartments, plus six new units for families that would be built in the WestHELP administration building.
A revised proposal, which was accepted by the town, no longer includes the six new units. Nevertheless, Group MRH increased its annual rental fee to the town from $100,000 a year to $500,000 a year.
“More and more people were coming to the table offering different things, and we really wanted to do the project,” said Harris, whose company is currently building a 106-unit townhouse development in Staten Island. “We’d still love to pay $100,000, but because of the competition, we offered more. The town of Greenburgh is benefitting the most.”
MRH expects to receive $1.5 million a year in rent. In addition to Richman’s annual fee of $120,000, the MRH Group would receive an annual management fee of $120,000. The project would also provide an additional $486,000 a year in profit to MRH Group.
MRH’s payment to the town of $500,000 was $150,000 more than the amount offered by Community Housing Innovations, the White Plains-based affordable housing nonprofit corporation. The added revenue to the town – 42 percent more than CHI’s – will be paid in part by the low- to moderate- income tenants who choose to live on the six-acre site.
CHI proposed charging tenants $895 a month for the modest one-bedroom apartments, which are about 450 square feet. Rents from Group MRH will be 27 percent higher, at $1,134 a month.
Richard Hyman, a housing consultant who was WestHELP’s housing director from 1991 to 1998, questioned whether the region’s rental market would fetch rents that high for the one-bedroom units.
“It seems way high,” he said. “We’ll have to see what the market is.”
But Harris said his market research found otherwise.
“Brokers tell me to let me know when they are ready to be rented,” Harris said. “If I had 1,000 of these apartments it wouldn’t be enough.”
Harris said he wants to reach out to officials at Westchester Community College in hopes of developing linkages between the complex’s tenants and the college, which has extensive lifelong learning programs for seniors.
The town must now draw up a lease with MRH that must be approved by Westchester County, which owns the housing complex.
“We don’t expect any problems,” said Greenburgh Supervisor Paul Feiner.
But Robert Bernstein, an Edgemont civic leader who urged the town to choose an affordable housing developer, was skeptical that the Astorino administration would move quickly on the lease. Astorino on Monday said he still preferred Ferncliff, which has made a last-ditch revision to the state.
“It’s not as done of a deal as you might think,” he said.
The town must also decide whether it will levy taxes on the county-owned housing complex. WestHELP paid no taxes while providing housing for low-income homeless families for 20 years. But Greenburgh Assessor Edye McCarthy attended a recent meeting when the town board analyzed the proposals.
Town Attorney Tim Lewis said the corporate structure of MRH Group, LLC may influence McCarthy’s decision.
“We don’t know what kind of corporate structure they have, and their tax make-up,” Lewis said. “They’ll have to submit that information to the assessor, and she’d make a decision.”
MRH has pledged to not allow any young children to live in the complex, which would spare any costs that would be incurred by the Valhalla school district. But if the complex is taxable, then the Valhalla district would stand to receive payment from the town. MRH has agreed to pay any increases in property taxes, but it appears that the baseline taxes – levied for 2013 – would be deducted from its $500,000 annual payment to the town.
Levying school taxes on the complex would provide revenues to the Valhalla schools, Westchester County, and the Fairview Fire District. In 2004, after the county and town had agreed to give WestHELP a second ten-year lease, the town received $1.2 million a year, and agreed to pay Valhalla $650,000 annually as a “social dividend” for having the homeless complex near the Mayfair Knollwood neighborhood.
The state Supreme Court subsequently found that the payments were illegal, and the district agreed to repay the town $1.1 million, with an initial payment of $400,000 made in 2012.