The Burlington Housing Authority (BHA) has signed purchase and sale agreements with Maple Street Building Co. and Bobbin Mill Building Co. to acquire Wharf Lane Apartments and Bobbin Mill Apartments in Burlington.
BHA will purchase 37-unit Wharf Lane, at the corner of Maple and South Champlain streets, for $3.515 million. The closing is planned for March 31.
Purchase price for the 51-unit Bobbin Mill building at 234 S. Champlain St. will be $6.485 million, if it's purchased by BHA no later than December 2012.
“The residents of these properties can breathe a lot easier today knowing they will not be forced to move,” says BHA Executive Director Paul Dettman. “Affordable housing in the city’s downtown is vital to Burlington. Burlington Housing Authority couldn’t be happier at the outcome of our negotiations.”
BHA will partner with Housing Vermont to renovate Wharf Lane within the next year, after applying for Low Income Housing Tax Credits and necessary funding from the Vermont Housing & Conservation Board and other sources.
The purchase price is less than the property’s appraised value.
“We’re pleased Burlington will retain 88 units of greatly needed affordable housing that was in danger of being converted to market rate rentals,” says VHFA Executive Director Sarah Carpenter. "Preserving existing affordable housing in Vermont is a key component to solving the state’s housing crisis," Sarah adds. "We look forward to providing the necessary financing to make acquisition and renovations possible.”
Residents of Wharf Lane have annual incomes of approximately $12,000 — 16 percent of the city’s 2010 median household income (Source: HUD). Many are disabled or elderly. Residents of Bobbin Mill have annual incomes of approximately $14,700.
Residents at both properties pay rent based on 30% of their income, with federal rent subsidies covering the balance and all would have been forced from the buildings if they’d been converted to market rate units.
James, Angelo and Remo Pizzagalli acquired and renovated the properties in the early-1980s using U.S. Department of Housing and Urban Development’s (HUD) Section 8 funding and VHFA financing that required the units be kept affordable for the 30-year term of the loan. At the end of that term the housing can be sold for market value.
When the owners announced plans not to renew the Section 8 contract at Wharf Lane and sell the building in March 2010, VHFA began exploring options to assure the units would not be lost and converted to market rate rentals under a Preservation Agreement they negotiated in 2001. The Agreement provided VHFA an Option to Purchase in the event the owner decided to sell or not renew the rent subsidy contract. VHFA assigned the option to BHA and this lead to the current preservation transaction.
The new ownership arrangement assures the buildings will continue to provide affordable rental units and removes forever any threat of conversion to market rate housing.
BHA is Vermont’s oldest and largest municipally-based housing authority. For almost 50 years it has provided affordable housing to individuals and families in the City of Burlington and surrounding communities.