Echo Village Apartment acquisition fails in Amherst, stalling Community Development Block Grant application

Last modified: Thursday, February 27, 2014
AMHERST — An effort to acquire Echo Village Apartments as 24 units of affordable housing has reached a roadblock after its owner rejected offers to buy the property.

And because that project is stalled, the town is unable to seek Community Development Block Grant money from the state to support various social services in the community, including $70,000 for operating the overnight homeless shelter beginning in November.

After several months of discussions involving town and state officials and representatives from the affordable housing community, Town Manager John Musante announced to the Select Board Monday that a deal could not be reached with Echo Village owner Jamie Cherewatti, whose Eagle Crest Property Management purchased the 30 Gatehouse Road complex from Jerald Gates for $3 million last year.

“Much to our surprise, a price was unable to be agreed upon between the current owner and the affordable housing preservation buyer,” Musante said.

In a memo to the board, Musante wrote that this private buyer, being assisted by the town and Massachusetts Housing Partnership, made a “competitive market rate offer” that was not accepted. The buyer has not been publicly identified.

Without this capital project, Musante said the town could not submit its application to the Department of Housing and Community Development for $800,000 in competitive CDBG money. Of this total, $600,000 was to be targeted for the acquisition of Echo Village, where several tenants with federal Section 8 vouchers made their homes prior to rents being raised and eviction proceedings occurring. The remainder was to be used for the overnight shelter, $35,000 for the food pantry at the Amherst Survival Center and $20,000 for an emergency funds account, with $75,000 designated for administrative costs.

Select Board Chairwoman Stephanie O’Keeffe said a lot was riding on this CDBG application and that this result is both surprising and disappointing.

“What we have here is a very big problem and a very complex problem,” O’Keeffe said.

O’Keeffe presented the board a letter to Cherewatti expressing “extreme disappointment” in his actions.

“This was an opportunity to rectify what has been a terribly destabilizing situation for Echo Village residents and the concerned community,” she wrote.

The board agreed to send the letter to Cherewatti. He could not be reached for comment after the meeting.

While the town was not guaranteed its application would be funded, O’Keeffe said there was confidence from state officials that it would rank high because of the state’s interest and partnership in acquiring affordable housing.

Cherewatti’s rejection, she wrote, “has left us saddened and frustrated.” The board requested that he at least end any and all eviction proceedings against low-income residents who remain, to both stop the stress on families and to demonstrate good-faith intentions in negotiations, which are expected to continue despite the rejection.

Select Board member James Wald said this is an opportunity lost to support a fragile community. “I fail to see what was lacking in the deal,” Wald said.

Board member Diana Stein said Cherewatti would have earned more than the sale price. Though details of the transaction are not known, with the board holding an executive session to discuss strategy, O’Keeffe confirmed that Cherewatti would have made money.

“He would have been made whole and then some with the profit,” O’Keeffe said.

Musante said that the reason the town could not move forward with the CDBG application is no other suitable non-social service project exists. While the town also lost affordable units at Rolling Green Apartments, it was not feasible to seek CDBG money for acquisitions there because more than half of the 204 units would not be made affordable.

The Select Board will now have to determine how to fund the social service needs.

Alisa Brewer said she would prefer to bring a warrant article to Town Meeting to appropriate $70,000 for the shelter and $20,000 for emergency funds, while others argued that it is essential to provide money to the Survival Center to feed hungry people in the community.

Aaron Hayden said he is worried that the town would be unable to build this into budget on an annual basis.

Musante said he will come back to the Select Board in March with a proposal for funding these social services.