Stern Village: $30 million revitalization plan has support and some critics

Stern Village could be getting some major upgrades if a plan is approved by the state for a $30-million revitalization of the low-income housing facility for seniors and adults with disabilities.

The proposal and “rebranding” of Trumbull’s Stern Village as “premier affordable housing in Fairfield County” has many residents excited, according to Executive Director Harriet Polansky. However, the plan also has a few critics, questioning the long-term ramifications.

Polansky spoke to The Times last week, explaining the revitalization proposal, which aims to modernize units and build a new community center attached to a two-story resident building. The improvements include a new loop road accessible to units, among other energy-efficiency upgrades and walkways that are ADA-compliant. Polansky said nothing major has been done at Stern Village in 40 years and that the Department of Housing (DOH) and the Connecticut Housing Finance Authority (CHFA) have deemed Stern Village

“Meaning if we keep doing the same thing we do now, there won’t be a Trumbull Housing Authority in the future,” Polansky said.

Stern Village is overseen by the Trumbull Housing Authority. Members of the authority are appointed by First Selectman Tim Herbst. One member of the housing authority, Thelma Burr, lives in Stern Village and is elected by fellow Stern Village residents. Stern Village is not supported by local taxes, and the THA pays PILOT (payment in lieu of taxes) fees to the town. The facility is supported by tenant rents.

“In 2012, Gov. Malloy made a 10-year, $330-million commitment to affordable housing,” Polansky said.

The Governor’s investment specifically targets the State Housing Portfolio, Polansky said, and earmarks those funds to revitalize undercapitalized and long ignored community assets state-wide, such as Stern Village. The state housing portfolio consists of approximately 13,000 units and is overseen by CHFA and DOH. Other state programs target investment in new housing production, such as transit oriented development, workforce housing and supportive housing.

In order to get some of these funds for Stern Village, the Trumbull Housing Authority has been in the pre-development stage to send an application to DOH and CHFA, due April 20.

“The state said in order to make this happen you have to have a development team,” Polansky said.

This included hiring a development consultant, attorneys and architectural team. The THA also had to put a resident participation plan into action, which included forming an advisory committee. A bulletin board in the community room gives updates on the plan, and Polansky said she regularly discusses it with residents at her Tuesday Tea with Harriet each week. The state also asked a representative from Transforming Outcomes for Vibrant Affordable Housing (TOVAH) to come in to speak to residents about the plan as well.

“You live here, I want you to be involved,” Polansky said.
About two-thirds of the money necessary for the $30-million project would come from a mortgage from CHFA, energy efficiency rebates, related party loans and DOH gap funding. “That still leaves a gap,” Polansky said, which meant Stern Village would create a plan to look for what she calls “socially responsible investors” who would want to take advantage of tax credits that are generated from a redevelopment effort of this type. The investors are considered limited partners, which means they are interested in the tax advantages of owning real estate, such as depreciation, which goes unused by not-for-profit entities like the THA. Operational aspects of the facility will remain the responsibility of Polansky and her management team. The Low Income Housing Tax Credit (LIHTC or Tax Credit) program was created by the Tax Reform Act of 1986 as an alternate method of funding housing for low- and moderate-income households, and has been in operation since 1987.

Last week, the Trumbull Housing Authority approved steps toward this goal, creating a Limited Partnership and a Non-Stock Corporation.

The Trumbull Housing Authority will be leasing the ground to the partnership. The Trumbull Housing Authority will remain as the developer and manager of the project, according to Polansky. After the tax credit period is over, THA will have the opportunity to “buy out” the limited partner for $1.

“We are a nonprofit state-sponsored housing authority, so for an investor to come in we had to develop something like the Stern Village Housing Associates LLC,” said Neil Gerhardt, financial specialist for the THA. “The THA will lease the land to them for tax purposes. This limited partnership will form the Trumbull Housing Authority Development Corp. We still control the lease and we are the general partner . We need a limited partner who will give us the money.”

The investment is significant, Polansky said. The limited partner will contribute approximately $10 million of cash to the project’s budget in exchange for the tax credits. The federal government only pays the investor if the program is successful, which means the facility must be inhabited by a low-income household at affordable rents. If that goal is not met, private investors, not taxpayers, are on the hook, according to Polansky.
A critic of the plan, Paul Littlefield, who lives in Stern Village, said he is fearful of Stern Village being put in the hands of real estate investors. He wrote a letter to the editor, and has posted about the issue on social media.

“The effect of this action will be to inexorably change the existing friendly and somewhat quaint but durable red brick housing facility, for low-income elderly and disabled tenants, to a substantially redesigned New England Style complex, including a few upgraded amenities, intended to attract investors and tenants from a higher segment of the rental market and still be called “affordable housing,” Littlefield wrote.

Littlefield believes that First Selectman Tim Herbst is behind the plan to put Stern Village in the hands of private investors and it is the reason behind what Littlefield calls Herbst’s “hostile takeover” of the THA in 2012. Littlefield has sent a letter to the Town Council, which will vote on a resolution supporting the THA’s application next week. He asks that Stern Village be left out of it and that the town build new affordable housing on a piece of town-owned property.

“The THA ‘remodeling and revitalization plan’ being submitted calls for a real estate investment corporation to take a 67-year lease on the Stern Village property and is said to increase the minimum rents from $110-$125 per month to $600 per month, effectively excluding the low-income elderly from Stern Village,” Littlefield wrote to the council.

Polansky said Littlefield, the plan’s most vocal critic, has not come to any meetings with her or the representative from TOVAH, who has reached out to him. She said information he put on social media is inaccurate.

“If we don’t get rental assistance the project doesn’t happen,” Polansky said. “We are not kicking residents out — that’s crazy.”

Polansky said revitalization will actually save money for residents, many of whom pay far more for electric heat each month than they do for rent. Energy-efficiency upgrades, solar panels and other parts of the plan will save money, she said.

The Trumbull Housing Authority will also not be giving control to any real estate investors.

“We are still in control, we are always going to be in control,” Polansky said “This is also not a Tim Herbst initiative, it’s a Harriet Polansky, THA commissioners and state initiative.

“Mr. Littlefield has had every opportunity to come to our meetings,” she said.

Polansky said Trumbull’s state representatives and state Sen. Marilyn Moore are aware of the plan and have voiced support for it, along with local police and the fire marshal who have also approved of the plan, due to its improvement in traffic and access for emergency vehicles. Herbst has also sent a letter of support for the project. According to a resolution before the Town Council, “the Town of Trumbull supports the THA redevelopment project and authorizes the reduction of Building Permit Fees by 50% for the St ern Village Revitalization and Redevelopment Project and all related construction work during the calendar years of 2015 through 2018.”

THA Commissioner Thelma Burr, who is a Stern Village resident and the only elected commissioner, said the majority of residents are looking forward to the proposed project and hope to see it happen.

“I would say 90% of tenants are for it,” Burr said. “Believe me, some people don’t like change, but many are excited. I’m all for it — I think it’s great.”