BENNINGTON -- A request to defer repayment on a loan made by a local housing project so it can work on stemming rising heating costs did not pass at a Select Board meeting Monday.
Applegate Housing Limited Partnership, which manages Applegate Apartments, requested that the town defer for one year repayments to a Community Development Block Grant, which is awarded though the Vermont Community Development Program 16 years ago. Last year it had requested, and received, a one year extension.
Two members of the board, John McFadden and Thomas Jacobs, were absent. Board member Sharyn Brush recused herself from the vote because she is on Applegate's Board of Directors. With Board member Justin Corcoran voting against the request, it did not have enough votes to pass, however Applegate can ask again.
Corcoran said Wednesday he voted against the deferral because he had more questions about how the block grants work, and is not sure he agrees with them in principal. He said his qualms center around the grants being structured like loans, but they do not appear to be paid back.
Bennington Economic and Community Development Director Michael Harrington spoke to the board on behalf of Housing Vermont, a non-profit company which is part of Applegate Housing Limited Partnership. Formed in 1988, is has formed partnerships across the state that have built a total of 161 housing developments such as Applegate.
Harrington explained that that about 16 years ago, Applegate Housing Limited Partnership received a Community Development Block Grant through the Vermont Community Development Program, which funnels federal dollars to affordable housing, and job creation projects.
"In this case, the monies were used for the development and major rehab of Applegate housing development," Harrington said in a later interview.
"Essentially the way the programs work, while they're called a Community Development Block Grants, they're set up as loans through the community," he said. "The reason they're set up as loans is there's not necessarily an expectation that money will get paid off or get paid back to the community. The reason they're set up that way is because it allows the community to have equity in these affordable housing projects within the community."
The grant came with an automatic 15-year deferral period, he said. Typically such projects are given between 15 and 30 year deferrals. This allows the community, through the board, to ensure the development is meeting the needs it was built to address and is up to standard.
Harrington said he believes the new rehab project being planned is approximately $3.5 million.
A memo from Matt Moore, head of development for Housing Vermont, distributed amongst board members, says Applegate is in need of another rehabilitation project, this one mainly to address heating fuel efficiency. He said Applegate had an operating loss of $45,000 last year as it coped with a fuel bill of $175,000. While it has worked to cut its costs, the rehab project is needed to deal with the spike in fuel expenses.
Moore said in an interview Wednesday that Applegate needs to defer the loan payment, otherwise it will be repaying at $4,300 per month. This will lead to the group not being able to pay all of its bills.
In addition to the heating issue the second rehab project will also bring the complex into compliance with current building codes. Currently Applegate has 102 units with people in them.
Kenn Sassorossi, vice president of partner relations at Housing Vermont, said the Applegate complex is a low-income housing development, so there is a limit as to what can be received from rent. The original rehab project was funded from a number of sources, not just the grant, but all were designed to incur "soft debt" so the project would be able to rent at low cost. He said the second project being planned will be financed in a similar way, but a block grant may not be sought.
He said a representative from Housing Vermont will attend a board meeting in the near future, possibly on May 12, to explain the need for the deferral to the board.
According to Moore, each development Housing Vermont has worked to create is treated as a separate entity, meaning if one in Essex had a budget surplus it could not be used to help a project running a deficit elsewhere.
Contact Keith Whitcomb Jr. at email@example.com or follow him on Twitter @KWhitcombjr.