Housing plan proposed for former Coggeshall school building. Are rents to high?

NEWPORT — The City Council took a somewhat controversial first step on the long journey to repurpose the former Coggeshall Elementary School building into workforce housing units on Wednesday, as the deal they approved with developer BCM Realty sets the prospective rent at $1,800 for a one-bedroom unit.

Coggeshall Elementary was one of three local elementary schools shuttered in 2013 as declining enrollment led the city to consolidate students into the newly constructed Pell Elementary School. Coggeshall’s sister, Cranston-Calvert Elementary, was recently reopened as a 34-unit apartment complex with market-rate units ranging from $1,800 for a one-bedroom to $2,500 for a two-bedroom townhouse-style apartment.

The City Council voted to approve BCM Realty’s bid for the property, the same developer which converted Cranston-Calvert, in a 5-1 vote. Councilor Mark Aramli was absent, Councilor Charlie Holder recused himself, citing a relationship with one of the developers, and Councilor Angela McCalla voted against the proposal because she believed the council needed more time to evaluate all three proposals. Her motion to continue the matter until the next meeting was rejected without a second.

“This is not the last step, this is the first step, and there’s a necessity that at some point we begin moving forward with a level of certainty and aggression to build out housing of all types across the spectrum,” Mayor Xay Khamsyvoravong said. “To stop and delay the production of housing for an additional process for a six-month strategic planning process may be something that may feel very good, it may in fact yield a better result, but to those residents who are sitting there day-in-day-out, that are on the cusp of waiting, I think what they want right now is action that's going to be delivering housing units for them and for a variety of them.”

What's being proposed?

BCM Realty proposes to retrofit 26 units into the original Coggeshall Elementary School building and construct three two-family dwellings on three nearby lots fronting Evarts Street. The project would have 36 units total, 20 of which would be one-bedroom units, and all of which would be priced according to Rhode Island Housing’s definition of workforce housing. That means rents in the new building would be affordable to those making between 80% to 120% of the Area Median Income.

BCM Realty’s bid to purchase and develop the property was approved over two other bidders through a Request For Proposals process that featured a seven-criteria rubric. The points in the rubric favored projects that increased the city’s stock of workforce housing, provided financial benefit to the city, supported and protected the surrounding neighborhoods, and reflected the goals in the city’s Comprehensive Plan. Overall, BCM Realty received a score of 90.1 out of a possible 100 points, 13 points more than the two other applicants, Church Community Housing Corporation and Knight Street Capital.

Will they be affordable?

Like its project at Cranston-Calvert, which was billed as having solely market-rate units when it was proposed and when it opened, BCM Realty pitched Coggshall Elementary’s one-bedroom rents as going for $1,800 per month and two-bedrooms going for $2,500. Alternatively, Church Community Housing set the prospective prices for 16 units of its 39-unit proposal at $1,475 for a one-bedroom and $1,975 for two-bedroom units, the rest would be market-rate, and Knight Street suggested a range of $1,500 to $2,000 for its 22-unit proposal.

The prices set by BCM Realty for the property were a source of contention at the council meeting, as McCalla and several members of the public came forward to state the apartments were priced too high for what Newport needs.

“(I’m) just thinking about the local economy in terms of the top ones,” McCalla said. “Hospitality is one, and that can run from restaurants to house needs, a lot of low wage working jobs… I know what Rhode Island Housing might say and what the feds might say, but $1,800 for a one-bedroom apartment, I’m not sure. That is a huge undertaking for a lot of the constituents that live around the neighborhood.”

Newport currently has the second-highest percentage of subsidized housing in Rhode Island. Planning and Economic Development Department Director Patricia Reynolds and BCM Realty have both claimed Newport lacks housing for middle-income residents, those who do not qualify for subsidized housing but cannot afford luxury prices. According to the US Department of Housing and Urban Development, someone who can afford workforce housing in the Newport-Middletown-Portsmouth area makes between $62,600 and $98,040 a year in a one-person household. A four person household would need to have an income between $89,400 and $139,920 a year.

A quick search on Zillow yields an average price for a one-bedroom apartment in Newport at $2,388 per month, but the most common rent available was $2,000. The average two-bedroom costs around $3,278 per month, which includes apartments priced as high as between $8,000-$15,000, but the most common rent on Zillow for a two-bedroom was $2,500, the same price as BCM pitched for Coggeshall.

“I’m just sad,” resident Maggie Martin said. “I’m just sad that this is the best we can do and as I see it, it probably is the best we can do, but it’s not taking care of the people that live here, that have grandchildren here, that have been here for forever, because we’re working with an AMI with million-dollar homes, and that puts all the rest of us in a place that can’t get any better than $1,800 for a one-bedroom apartment. It’s my soul that hurts.”

Is the city being low-balled?

BCM Realty also happened to be the highest bidder when it came to purchasing the property itself. BCM offered $1 million for the property, whereas Church Community Housing offered to give $750,000 plus up to 50% of the net profits and Knight Street offered $250,000 plus a $250,000 investment in the nearby playground. The tax assessor’s website currently values Coggeshall Elementary to be worth $4.72 million, most of which is tied up in the value of the building itself.

When asked about why the purchase offers were so low, Reynolds said the fees associated with renovating an old building, rather than building entirely new construction, are much higher, therefore selling it at a low cost is a better business proposition for a developer who will turn the apartments into non-luxury apartments.

Khamsyvoravong also asked whether the property was listed on a Multiple Listing Service database to attract varied offers, which was a suggestion included in a previous City Council resolution on housing. Reynolds said there were extra fees and time constraints associated with working alongside a broker. She also said an MLS would prioritize price, “not program.”

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“Our priority was the best sort of program that provides workforce housing for the city,” Reynolds said. “Sending it out on MLS would have gotten us the best revenue return but not necessarily what we would want as a community to put in that building.”

What’s next?

Councilors butted heads with a few residents present that evening, namely Beth Cullen, who criticized the council for moving too quickly on the proposal. Cullen claimed Councilor David Carlin had reneged on an alleged promise to vote to continue the matter and also claimed Councilor Jeanne Marie Napolitano should recuse herself due to her son’s involvement in contracts with BCM Realty. Neither issue brought forward by Cullen changed the final vote that evening, with Carlin claiming he never made such a promise and Napolitano claiming her son has contracts with several contractors throughout the city. Napolitano also called Cullen “not a very nice person.”

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Now that the bid has been approved, the developers and the city will begin undergoing public meetings for further input on the project, a process that could take between 12 to 24 months according to Reynolds. Reynolds referred to the council’s acceptance of BCM Realty’s bid as a “starting point,” and said the city is not obligated to anything about the project as proposed by the developer as presented.

This article originally appeared on Newport Daily News: Apartments proposed for former Coggeshall school in Newport