Mayor Fuller released this statement today…
This morning I sent a request to the City Council to authorize the purchase of the West Newton Armory Building and land at 1135 Washington Street just outside West Newton Square.The City of Newton is being presented with an opportunity both to obtain a special historic building and to increase the supply of vital affordable housing for the price of $1.00. The Commonwealth is willing to sell the building to the City for $1.00 only if it is used for affordable housing in perpetuity, a use in which I believe deeply, and which also allows the City to control what happens to this important building.
The need for more affordable housing throughout Newton continues to persist. Some have thoughtfully asked how it came to be that the City of Newton could obtain the Armory for $1.00, but only for one hundred percent permanently affordable housing. Through our discussion with the Commonwealth’s Division of Capital Asset Management and Maintenance (DCAMM) representatives, we learned that there were two scenarios under which the City could take control of the Armory; however, only the scenario of one hundred percent affordable housing presented the option for the City to purchase the property for $1.00.
The other scenario would allow the City to acquire the Armory for a municipal/direct public use at a price that reflected the type of use. DCAMM has sold properties in other municipalities under this scenario at 25 percent of full and fair market value. Based on the current $4.3 million assessed value of the Armory (likely less than appraised value), Newton would pay approximately $1 million to purchase the property.
Another scenario results if the City declines the opportunity to purchase the Armory; DCAMM would then sell the property on the open market to the highest bidder.
My vision for the West Newton Armory is that the City purchase it and retain ownership (as required by the state). Then we would lease it to an affordable housing development partner who will redevelop and manage the property as 100 percent affordable housing.
I am very excited about this opportunity to add much-needed affordable housing, especially in such a unique and well-located building. I look forward to the next few years of collaboration with the honorable City Council and our residents as we work together to bring the West Newton Armory back to life.
Read my letter to the City Council with more information about the Armory HEREunder Other Communications.
Newton should have a target goal of 12.%5 real affordability. Acquiring the Armory for affordable housing could help. But like I tell every young entrepreneur who comes to me for business advice, always do the math FIRST. The Mayor has presented half a picture. It’s a concept. Nobody will know if the idea of converting the Armory to housing is financially feasible until Mayor Fuller is able to find her “affordable housing development partner who will redevelop and manage the property as 100 percent affordable housing.” Finding a developer who thinks they can make a profit on this project is not going to be easy. It’s a very expensive conversion.
Well, the property is for all intents and purposes free. So I would think the economics is there. Needs a moat, though.
As of this November 2018 article https://www.itemlive.com/2018/11/09/lynn-armory-building-to-be-turned-into-housing-for-veterans/ the comparable Lynn Armory was going to be turned into 35 apartments for veterans, plus include space for veterans’ services, with the owner being the nonprofit Lynn Housing Authority and Neighborhood Development. Although according to the Lynn assessors database, the current owner (it’s 38 South Common Street) is still the Commonwealth of Massachusetts. It’s unclear what the sales price will be.
Here’s how they compare:
Year Built:
Lynn – about 1894
Newton – 1910
Floors (main building):
Lynn – 3 plus basement and turrets
Newton – 2 plus turrets
Both armories have a one-story with peaked roof rear wing which I assume is the field house for drills.
Building Size:
Lynn – 23,864 sqft (Finished Area)
Newton – 20, 703 sqft (Effective Area) or 17,848 (Building Area)
Land Area:
Lynn – 29,696 sqft
Newton – 33,150 sqft
But I’m not sure what’s included in the Lynn square footages, because the parcel is an odd V-shape with frontage on the side street, Pleasant Street, and the Pleasant Street portion has another brick, one-story building on it.
You can’t really compare assessed values, since anything in Newton is going to have a higher market value, but they are:
Lynn – $1,858,000
Newton – $4,322,400
The article doesn’t explicitly say the Lynn veterans apartments will be officially capital-A Affordable, but I would assume so, since it says the goal is to end homelessness among those who served in the armed forces.
If Lynn can pull off this type of renovation, Newton should be able to. And if we’re getting the building for a dollar, that’s a better deal on the building, whatever Lynn is paying. Although Lynn may qualify for more state aid on the renovation.
Forgot to include, Newton’s has a basement, too.
Brilliant proposal from the mayor, and something both sides of the development debate can and should get behind.
What Jim just said.
@Julia– “If Lynn can pull off this type of renovation, Newton should be able to.”
The problem with that argument is the City of Lynn appears to still be looking for the funding to renovate their armory. Maybe they find it. Maybe they don’t. But Lynn, like Newton, should do the math first to calculate the viability. The $1 property cost is somewhat misleading, because it can cost $25K-50k per year just to maintain a mothballed building like the armory. No surprise that Governor Baker wants to transfer that cost to municipalities.
I’m a strong supporter of affordable housing. I believe Newton’s goal should be 12.5% real affordability. If we’re going to spend money as a city creating affordable housing, we need to make sure we’re getting the biggest bang for our buck. So unless the armory comes with cannons included, let’s make sure the Mayor and City Council do the math first.
Note:
A housing authority (such as the Lynn Housing Authority) maintains PUBLIC housing. Public housing rent is set as a percentage of the resident’s annual income.
Example: if a senior has an annual income of $14,400 ($1,200/month) and is expected to pay 30% of their income per the Newton housing authority, their monthly rent – including all utilities & electric – would be$360/month.
Affordable housing is defined per 40B. The formula is based on the median income for that municipality. The Affordable units at Austin St are $1,607 for 1bed+1bath units and $1,737 for 2bed+2bath.
In Lynn, a non-profit that is part of a housing authority is trying to renovate an armory to make it into public housing.
Here, the mayor is proposing a ‘partnership’ where -I imagine – the housing developer will renovate the armory into affordable units and then be allowed to operate the facility and collect the Affordable rents for a set time. At the end of that period, usually measured in decades, the building/units are going to need some serious work – think kitchens, bathrooms, roof, etc.. At that time Newton can go out and find a new partnership to repair the units/re-renovate the building and operate it going forward.
At 33K sf, assuming you can get 1-bed unit in at 700 SF + 50 SF circulation and amenities, you get 44 units, let’s round down to 40 to make the math easy. Assume $400 of the rent is going right to heat, hot water, taxes, and building O&M. 40 x $1,200 = $48,000/month.
If the terms of operation is 25 years, the development partner can borrow or self-finance at 8% for that term, but wants to maintain a ~20% profit (pay no more than $40k/month towards the initial construction cost) then they need to pull off the conversion for $52 million dollars or less. If the term is longer, their rate is lower, or they’re OK with a smaller profit it could be much higher.
$52 million is over $1,500/sf. Even if everything went wrong, I can’t see development costing more than$500/sf.
So I’m hoping that when the mayor goes out to get a development partner she gets everything she can from them. This might be ongoing (lease) payments to the town or setting the rents below what is required for Affordability.
(And if I’ve dropped a power of 10 somewhere, $150/sf is enough to build up n the Midwest – not here – although, if we get it up to $250 through the rate and the term then I’d say it’s no-cost feasible for the town)
[I work for the MBTA. These are my views, opinions, and math. Not theirs.]
I like Anne’s math skills, but don’t agree with the assumptions. Here’s where things could go wrong…
1.] The building may already require expensive structural repairs…
2.] Historic regulations will add substantially to the renovation cost, as will ADA compliance. The elevator alone will be $100K…
3.] The window configuration and other structural factors [like a basement that may not be suitable for tenants], could easily limit this building to 25 housing units…
The truth is that no one knows the costs yet. But there are answers to all cost questions. So before taxpayers buy a potential money-pit [because the $1 price tag seems too good to be true], City Hall better break out the calculator and do the math first.