NEWPORT — Plans for a $19 million workforce housing project in Newport have fallen through after the project developer and property owners were unable to reach a purchase agreement.
Kevin Lacasse, CEO of New England Family Housing, said this week that his hope to acquire 169 Sullivan St., a former mill building, to repurpose into a 68-unit affordable apartment complex came to a halt last week, after failing to negotiate a lower asking price for the property.
“I’m very disappointed,” Lacasse said Friday. “This is also a loss for Newport, a town that really needs that type of housing.”
The former Ruger Mill building has been targeted for housing projects since 2017. The property owners, Ron DeCola and Sal Calvino, initially sought to build an apartment complex with 68 units rented at “market rates,” meaning that the landlord may price the units at whatever the market will support. After being unable to make the project cost-feasible, the owners teamed with Lacasse.
Entering 2020, Lacasse’s project had the backing of the Sullivan County Commissioners and Newport’s Selectboard, Planning Board and Zoning Board, and the funding mechanisms were in place. Federal tax credits — primarily Low Income Housing Tax Credits — were to provide about half the funds to cover the project cost, with the remainder to come from grants and traditional loans.
Lacasse said the sides had agreed to a purchase price of $4.1 million for the property, nearly four times what the owners paid for it — approximately $1.3 million — in 2016.
But due diligence found that there would be additional costs to the projects, particularly around the removal and cleanup of two hydroelectric generators located on the property.
Lacasse said he tried to get DeCola to lower the asking price, but DeCola “wouldn’t budge.”
“That just killed the deal,” Lacasse said. “I will pay as much as I can, but I have to stick with the guidelines of the [tax credits program].”
Lacasse’s project would have created 17 market rate apartment units, with the remaining units for people with low to moderate incomes: 34 were marked for people earning up to 60% of the area median income; 10 units for people earning up to 50% of median income; and seven units for people earning up to 30% of the median income.
Lacasse said there is always a possibility that the parties could reach a new agreement in the future, but that will depend on what the owners choose to do with the building.
“I have had a good relationship with Ron [DeCola],” Lacasse said. “He just wouldn’t budge on the price.”
When talking to the Eagle Times Friday, DeCola said the decision was simply financial, not personal.
“Nobody is at fault,” DeCola said. “Both parties work very hard to reach an agreement. It just didn’t happen.”
DeCola says the property owners don’t have a specific plan for the building right now, and are exploring all their options.
“We’re hoping to get the highest offer and the best use for the building,” DeCola said.
Lacasse said that if the situation changes he would be “the first in line to take the project forward.” But should too much time pass, LaCasse will lose all the tax credits he acquired for the project.