- Supporting a resolution to back the East Hampton Housing Authority with the Town of East Hampton's bond credit rating, Town Board members have put a stamp of approval on the transfer of ownership of the 26-unit Springs Apartments affordable housing project. The Housing Authority will purchase the homes for $4.2 million, to be paid for by bond, and act as the landlord on the rental units.
The Housing Authority, a legislative body distinct from the town that came into being in 1983, will purchase the complex on the six-acre parcel and act as landlord for the tenants soon to move into the 26 one and two-bedroom units. In the joint agreement, the Town will absorb the cost of the site work and the property purchase at a cost of approximately $1.5 million, with a remaining $4.2 million in construction costs to be paid back to the town by the Housing Authority.
According to the East Hampton Housing Authority, tenants are already lined up for the
Springs Apartments, and following the granting of the temporary certificate of
occupancy, tenants can sign leases, pick up keys, and start to move into the new units.
For its part, the Housing Authority worked closely with the town and developers in helping to make decisions on layout and design details, deciding that the project should contain 13-one bedroom and 13-two bedroom apartments, which were constructed in six manor house style buildings in order to present an appearance of single family homes, though containing multiple units.
"We have one more hurdle now," Councilman Pete Hammerle, who undertook the bulk of the initial legislative work on the project, informed the town board at their Friday, March 7 meeting, "We have to focus on getting the Board of Health to sign off on the project." The project also needs a temporary Certificate of Occupancy (CO), which will likely come within the next week. Following the granting of the CO, tenants can sign leases and pick up their keys.
"What will happen now, and I presume rather rapidly," Maureen Murphy, executive director of the East Hampton Housing Authority, explained in a phone interview, "is the bond council for the town will inform the housing authority of the terms of the bonding. We will pay the bond on a note twice per year, on the $4.2 million cost of construction and the buildings."
The Avallone Apartments in Montauk and Acabonac Apartments in Springs are currently maintained by the Housing Authority and are regarded as successful earlier joint ventures addressing the town's affordable housing shortage. The Acabonac Apartments project, which was bonded in the same manner as is proposed for Springs Apartments, has operated successfully under the auspices of the Housing Authority since closing on the project in 1999. Following the purchase of the Springs Apartments, the Housing Authority will now be landlord on 93 affordable apartments throughout the township.
By using the town's borrowing history in shopping for the $4.2 million bond for the project, the Housing Authority will be afforded a more favorable fixed interest rate and benefit from the town's financial security net should the project falter. Although failure seems unlikely, as the earlier affordable housing endeavors have demonstrated, the need for such projects in the community and tenants for the new units are already lined up and waiting.
The Housing Authority predicts, using an assumed vacancy rate of five percent, that the total income from the project in the first year should be $444,600, with operating expenses, including maintenance, utilities and taxes, running in the ballpark of $164,500. This leaves $280,000 annually available for debt service to repay bonds.
"The Housing Authority has never defaulted on a property. We have always had positive cash-flow every year," Murphy said, emphasizing the projected success of the project. "And we have the tenants all ready to move in."