Friday, January 23, 2009
Rocky Point profitability report still missing after two years
Aaron Gornstein of Citizens’ Housing and Planning Association (CHAPA) has notified the Town of Carlisle that an audited certification detailing development costs and proceeds for the Rocky Point affordable housing project has not been received. The initial request was sent to developer Michael Kenny on December 19, 2006, at which time the development project was complete. Under the state’s 40B law, any profits in excess of 20% must revert to the town to be used for additional affordable housing.
According to Gornstein, the developer is required to hire a CPA firm to conduct an independent audit. “They must follow specific procedures in the financial review.”
Kenny has been asked numerous times to provide the numbers, including monthly reminders and a letter notifying Kenny he was in non-compliance. On Tuesday, January 13, Gornstein reported he had recently spoken to Kenny and expects to receive the report soon, but could not name a specific time frame. The Mosquito’s attempts to reach Kenny by phone were unsuccessful.
In February, 2008 changes were made to the 40B rules and regulations that bar towns from taking legal action against developers for excess profitability. Instead, according to Gornstein, provisions were made to hold aside up to $100,000 of developer funds until release of the audited report. Because Carlisle’s Rocky Point development had already been completed by the time the new regulations were issued, no funds were held aside for this purpose. “This is a really good regulation,” said Gornstein. “We strongly supported and urged this.” Unfortunately, he added, “for an older project, there’s nothing in place.”
According to Housing Administrator Elizabeth Barnett, a bond held by the town was released before Carlisle received notification in 2008, two years after the completion of the project, that the profitability statement had not been received by CHAPA. Barnett notes there are no financial penalties for late submission of the profitability statement, a circumstance she deems “kind of surprising.” Currently, the town has little recourse but to hope the state will keep the pressure on.
Barnett observes that at a recent conference, Senator Susan Fargo raised a concern that many communities with completed 40Bs are in the same boat. According to Fargo, as much as $100 million may be outstanding that is owed to Massachusetts towns. ∆
© 2009 The