YWCA auction postponed
Y tries to duck affordable housing deal
By Chris Busby
The public auction of the Greater Portland YWCA’s building on Spring Street, originally scheduled to take place yesterday morning, has been put on hold until at least next month. The cash-strapped non-profit is questioning whether a city ordinance enacted to maintain Portland’s housing stock applies to the property.
If so, that could put a major dent in its value. The law requires developers to compensate for any housing units they destroy by either building (or helping to build) new housing, or paying into a city fund for affordable housing construction. That payment would approach $2 million in this case, according to most estimates.
The YWCA has already tried to get out of another legal requirement that could cut the value of 87 Spring Street: a covenant with the Maine State Housing Authority requiring the building to remain affordable housing for the next couple decades.
Negotiations to reach “middle ground” on this matter are largely complete, said MSHA Director Dale McCormick, but they haven’t been easy.
“They definitely wanted us to relieve them of their promise, and then mounted a very strenuous campaign to that effect, which I’m sure now will be shifted to the city,” McCormick said. That campaign included an effort to get Gov. John Baldacci to intervene on the YWCA’s behalf, McCormick confirmed. The Governor’s Office has “tried to stay neutral” on the matter, she said.
City Manager Joe Gray is holding a private meeting with representatives of the YWCA next Monday to discuss the city ordinance.
Carol Mitchell, an attorney and senior executive at TD Banknorth Group Inc., is part of the YWCA board subcommittee working on the sale. She did not return a call seeking comment. Meg Baxter, President of the United Way of Greater Portland, has also pushed the MSHA to lift the covenant; Baxter could not be reached for comment today.
The city ordinance was passed four years ago, partly in response to Maine Medical Center’s expansion plans, which included the demolition of housing in the West End. But it seems its existence came as a surprise to YWCA officials and the company they hired to auction the property, the national firm Tranzon Auction Properties, prompting the last-minute postponement. The e-mail from Tranzon announcing the postponement was sent to interested parties on Dec. 12, two days before the auction was scheduled to take place.
“It’s interesting that nobody had alerted us” to the ordinance, said YWCA board member Nan Sawyer, a broker and partner in the local real estate company Ocean Gate Realty. She said it’s “not clear” that the law “totally applies to us.”
“My guess is that it applies,” said City Councilor Jim Cloutier, a member of the Council’s Housing Committee. He stressed that there are several ways a developer can satisfy the ordinance, such as by partnering with a non-profit agency, like the MSHA or the People’s Regional Opportunity Program (PROP), to help finance the construction of new housing.
Asked to comment on the possibility the ordinance will not be applied to the Y’s property, Gray said, “I can’t decide that at this point in time.”
The YWCA has ceased operations at the 46-year-old building, which included 53 rooms used by women in need of its services. The agency owes creditors roughly $2.5 million, and still has $1 million outstanding on the property’s mortgage, the Portland Press Herald reported last month. The same article noted the property was on the market earlier this year for $4.9 million.
A slew of developers and institutions in town have expressed interest in the property, including the Portland Museum of Art, the Children’s Museum of Maine, and the Portland Conservatory of Music, all of which are nearby and hoping to expand. However, unless the cultural institutions’ plans for the property include affordable housing, the city ordinance and MSHA’s covenant would make their interest in the building either costly or moot.
It’s unclear why the city housing law has taken the Y board by surprise, but it’s clear the Y was well aware of its covenant with the state housing authority.
That covenant was put in place in the 1990s, McCormick said, after MSHA provided the YWCA with a loan to help it continue its work at the Spring Street facility. McCormick said the authority has provided over $1 million for the YWCA’s program providing transitional housing to women.
“I think the covenant seemed like an annoyance to them compared to what was in front of them, which was their own needs, their own organizational difficulties,” McCormick said of YWCA board members involved in the talks.
McCormick said MSHA has demanded two conditions be met before the covenant is lifted. The first requires that all the women staying at the Y be placed in new dwellings or appropriate programs, a condition she said has largely been satisfied. The second would allow the housing authority to be “a competitive bidder” on the property.
McCormick declined to elaborate on how her agency could become “a competitive bidder,” but said the original $4.9 million price tag puts the MHSA out of contention – “it wouldn’t be affordable housing” at that sale price, she said.
McCormick also said the MSHA offered to buy the property several months ago, but the Y rejected that offer. “They seem bent on having an auction,” she said.