HADLEY — A proposal to turn a Route 9 hotel into housing for up to 63 low- and moderate-income individuals is receiving both support and skepticism from residents and municipal officials as Valley Community Development begins the permitting process for the project.

The project, to rehabilitate the vacant EconoLodge at 329 Russell St. into 51 apartments, would use the state’s Chapter 40B law allowing a developer to be exempted from certain zoning restrictions. In this case, Valley CDC is asking for an exemption from the town’s general prohibition on more than one housing unit on a property.

A majority of the Select Board views the project as a benefit to Hadley, especially should the town fall below the state’s mandated 10% threshold of subsidized housing stock.

Referring to the former Windfield Estates affordable housing project, “the town itself did very little to get that there,” Select Board member Randy Izer told the Zoning Board of Appeals on Monday. “We had it stuffed down our throat through an unfriendly 40B, and we’re trying to avoid that in the future.”

But Tony Fyden of Cold Spring Lane said the town shouldn’t be frightened of having existing affordable housing return to market-rate housing and instead should seek zoning changes at Town Meeting and then proposals from developers, rather than potentially compromising the Route 9 tax base by allowing a hotel to become an apartment building.

“To do something like this is a dramatic shift,” Fyden said. “We have rules that say no apartments for a reason. We want to keep business on Route 9.”

Laura Baker, real estate development director for Valley CDC, said the plans are to convert the three-story, 29,230-square-foot hotel, which it purchased from Hampshire Hospitality Group, using $12 million in financing from the state’s Department of Housing and Community Development (DHCD).

“The goal of this work is to primarily provide housing for single adults and some two-person households,” Baker said.

The plans show studio apartments of 257 square feet and one-bedroom units of 514 square feet. Thirty-three apartments would be reserved for extremely low-income people, 25 of them for those currently unhoused, and 17 apartments will be reserved or moderate and working-wage, or low-wage, workers.

Middle-tier rents would be set at $988 a month for efficiencies, including all utilities, such as heat, air conditioning, electricity and Wi-Fi, and $1,059 a month for one-bedrooms. The operating budget will be based on rents and subsidies.

Valley Executive Director Alexis Breiteneicher said the proposal will also make affordable housing available in Hadley for retirees and minimum-wage workers, many of whom work jobs at the retail stores along Route 9.

“Slightly over half of all renters in Hadley are housing cost burdened, paying more than one-third of their household income towards rent,” Breiteneicher said. “Adding 50 affordable apartments will go a long way toward easing the affordable housing demand in town.”

In addition to a live-in manager, there would also be a full-time resident services coordinator and property manager, part-time maintenance staff and an on-call overnight crisis service provider.

The three-member Zoning Board is where the fate of the project will be decided.

The board voted unanimously to declare the town has “safe harbor” under the affordable housing statute, which means the town is protected from Chapter 40B projects. This requires the state housing department to be notified, but gives the board the ability to either deny the project or put conditions on an approval.

Town attorney Lisa Mead of Mead, Talerman and Costa said the DHCD will determine if the town is, in fact, in “safe harbor.”

Arguments for, against

The meeting began with the reading of a petition signed by 45 people against the project. That petition cited the potential for the housing project to forever alter the business district, destroy the tax base that keeps property taxes low, and negatively impact public safety and town schools.

A letter from the Finance Committee also expressed concerns about lost revenue, as well as whether the project would serve a highest-priority use for the town, including housing for senior citizens.

Finance Committee Chairwoman Amy Fyden said $110,000 would be lost in room taxes, and the project will be a strain on town services. “I don’t see where the benefit is for the town’s finances,” Fyden said.

The Committee on Diversity Equity and Inclusion, though, offered strong support. In its letter, it said stable affordable housing is critical to the town, the project is on the bus route and within walking distance of jobs, and it preserves open space and farmland elsewhere. The committee also suggested that there be no local preference for residents, saying the project needs to be part of a regional and statewide solution to housing.

The Hadley Housing and Economic Development Committee is also giving unanimous support as an advisory committee, said committee member Molly Keegan, who is also on the Select Board. Keegan said it’s easier to retain affordable housing than replace it, and there’s a risk that the town will lose Mountain View Apartments from the affordable housing inventory this year, and Vesta, which opened as Windfield Estates, in several years. Both could return to market-rate housing when their agreements to remain affordable expire.

“These types of projects don’t happen overnight,” Keegan said, adding that revenue from the hotel taxes has already vanished.

The Planning Board has not taken a position on the project, but may take a vote at its meeting on March 7.

One member present objected to the project. “We have done our share,” said Joseph Zgrodnik, who also suggested Town Meeting should get a say.

Members of the Zoning Board of Appeals discussed the position they are in.

Chairman Andrew Bombardier said he’s concerned that three residents are being asked to make a political decision for the entire town that includes waiving existing zoning rules. That would rub some people the wrong way

A lack of provisions for preferential treatment for senior citizens in Hadley or itinerant and homeless people in Hadley is a concern for member Jason Galvin.

“I struggle to see the benefits for the town of Hadley,” Galvin said.

“I feel like the town is being backed into a corner,” Galvin said. “What’s the other possible use for the building, other than converting it into an apartment?”

The meeting is scheduled to resume March 20 at 7 p.m.

Scott Merzbach can be reached at smerzbach@gazettenet.com.]]>