PROVINCETOWN — It’s been three and a half years since the first year-round tenants moved into Harbor Hill, the 28-apartment, four-building West End complex that used to be a timeshare until it went bankrupt in 2016.
The buildings had not been well cared for; in fact, the manager of the timeshare went to prison for embezzling more than $1.8 million from the property’s accounts between 2008 and 2015. Voters authorized the purchase of the buildings in 2017; the town made an $8.1 million offer at auction in 2018 and was able to make basic repairs to the apartments and get them rented out by the end of 2020.
Harbor Hill is now occupied by 47 adults, eight children, 12 dogs, and three cats, according to the members of the Year-Round Market-Rate Rental Housing Trust. Around 80 percent of the residents work in the town’s service industry or for local governments.
The buildings also have some serious structural issues, according to a letter the trustees sent to state Sen. Julian Cyr and state Rep. Sarah Peake earlier this month.
“The Trust is writing to you in request of any available financial support towards this critical workforce and community housing project in Provincetown, as we are in dire need to preserve the project and prevent it from falling into further disrepair,” said a letter from the current trustees: Nathan Butera, Austin Miller, Louise Venden, Cass Benson, and Doug Cliggott.
“A recent assessment from a local construction cost expert placed our immediate roofing and sidewall needs at $1.5 million,” the trustees wrote. “The Trust barely has enough funding left to support the cost of only the most critical roof replacements.
“Similarly situated projects enjoy substantial subsidy and grant funding from state and federal sources,” the trustees wrote, “all of which remain out of reach for Harbor Hill.”
The Market-Rate Rental Housing Trust is the nominal owner of Harbor Hill, but the town’s voters purchased it by issuing $10.7 million in bonds. The payments on those bonds, about $600,000 per year, come from the town’s general fund. The rents at Harbor Hill, also about $600,000 per year in the aggregate, cover day-to-day expenses, minor repairs, and property management services provided by the Community Development Partnership.
That leaves major capital expenses unaccounted for, however. Neither the rental revenue nor the already-issued bonds are enough to cover multi-million-dollar capital repairs or improvements.
“We had an issue in December where our insurer dropped us very suddenly and we had to clamber to find new insurance very quickly,” Miller told the Independent. “And the new insurance wouldn’t cover the roofs. We are now trying to figure out how we can get the roofs replaced as quickly as possible so that we can have them insured again and not have any losses related to that.”
Miller said there are also issues with the sidewalls and possibly with the foundations.
“The bottom line is we don’t know all of what needs to be done,” Miller said.
Voters at the annual town meeting will be asked to authorize $70,000 to cover a “very comprehensive analysis of the state of the property and all of the work that needs to be done to bring it up to par,” said Miller. That $70,000 request is already on the town’s draft warrant for April 3 as part of the capital improvements budget.
On Feb. 21, the Market-Rate Rental Housing Trust voted to place two more articles on the warrant. The first, for $240,000, would help install two roofs that are needed immediately. (The Trust has about $200,000 in its accounts right now that would also go to this purpose.)
The second would ask for $1.2 million to take care of a long list of exterior repairs to the four buildings.
Meanwhile, record cold temperatures in early February wreaked havoc at the complex, Miller said. Burst pipes led to flooding in four of the apartments.
“We had to move out the tenants from those units pending repairs, which will take many months,” Miller said.
There were two available units in the complex that were about to be rented to people on the waiting list, so two of the families were moved into those units, Miller said. “We still need to find interim solutions for the tenants of the other two units,” Miller said.
Insurance is, however, defraying the cost of all this work.
Assistant Town Manager Dan Riviello told the Independent that the $70,000 building needs assessment is an important step.“We badly need workforce housing, and Harbor Hill serves that need,” Riviello said. “The town has been and is very supportive.”
Cyr said earlier this week that Harbor Hill was “a remarkable success.”
“I know at least a dozen people who are instrumental to this town that live there,” he said. “Harbor Hill is a model for what we’d like.”
Maintenance is one of the realities of owning property, Cyr said, and while it’s taken up resources, Harbor Hill is a worthwhile endeavor.
Funding sources are hard to find for people earning 80 percent to 200 percent of the Area Median Income, a federally defined measurement used in many housing programs.
“Most funding goes for new projects, or infrastructure like water mains,” Cyr said. “There are not many existing state and federal programs that provide funding for workforce housing.”
The Truro Democrat said he and other legislators have filed bills for Provincetown, Truro, Nantucket, and the six Martha’s Vineyard towns that would allow them to impose a real estate transfer tax on luxury home sales.
“The transfer fee would give them some revenue,” Cyr said. “It may be the best way to close the gap.”
Provincetown has already approved such a transfer tax, Cyr said, but the trick is getting a bill passed by the state legislature. It’s a solution that is still somewhat in the future, Cyr said.
