When I read John Merrigan’s recent column in the Recorder about the Hope Street parking lot, I responded to his request for volunteers to help canvass the neighborhoods and collect signatures. Whatever happens to the Hope Street parking lot isn’t my concern, it was the steps taken by our city government officials that led me to his doorstep to collect a clipboard.
When a city or town wants to sell real estate assets, it should only be done because the asset has no remaining value left to the city and even then, the asset should go for the greatest amount any entity, person, or third party is willing to pay. Although Hope Street is no longer a functioning parking lot, the city could issue a revenue bond that would cover the costs to repair it. The bond’s cost is secured by the income received when people park in the lot. Revenue bonds are NOT funded by taxpayers. The mayor’s office knows this.
This referendum has become a debate about whether you want more affordable housing or not in the city and that’s a shame. I work for a for-profit real estate development company in Westfield. We do both residential and commercial projects. The only residential developments we consider building (multi-family, HOAs, condos) are in Hadley and Northampton because that’s where the market is capable of returning a margin that allows us to continue growing as a small business.
Our company looked at the Hope Street lot and came to the conclusion that even doing as few as 32 units, 8 per floor, all one-bedroom, first floor all ADA compliant, separately metered electric only, the rent needed to cover the costs of construction and operating expenses (taxes, insurance, maintenance, utilities) would be a minimum of $2.000. More likely we push it to $2,200 or more with no utilities included. In order to secure permanent financing after the building is completed, we would need to reach 87% occupancy. This means 28 of the 32 units at $2,000 would need to be signed to one-year leases within the first two months after the building is issued the Certificate of Occupancy. This is how market-rate housing works. The market in Greenfield (i.e. people who can afford it) for one-bedroom units at $2,000-$2,200 with no utilities is non-existent. I could afford it, but I would never think of paying that much to rent in Greenfield. The mayor’s office knows this, yet her office is determined to create this market through an RFP. Governments don’t make markets; governments only regulate markets.
The final reason I took issue with the city declaring the Hope Street lot surplus, is the lack of appraised value attached. That doesn’t make any sense. If the asset was once income-producing and still has the potential to return money to the city, then it should have a price tag over $35,000. The mayor’s office knows this, but wanted the property declared “surplus.” Why?
I’m voting “Yes” on Question 1, because I do want something done with the Hope Street lot. I don’t care what it becomes, but it was completely undemocratic and unconscionable the way the city government tried to divest itself of an asset with no resident input and no appraised sale price.
Brendan Kuntz lives in Greenfield.