Selectmen to hear Beach Plum 40B marketing plan
BY PETER B. BRACE
Beach Plum Village 40B Developer Josh Posner needs one more signature before he can begin marketing his 10 affordable units.

Nantucket's first Chapter 40B development, Beach Plum Village between Rugged Road and Scott's Way, is currently under construction. Developer Josh Posner hopes to have the first qualified resident move into one of the affordable units sometime in February.

The Massachusetts Housing Bank, known statewide as MassHousing, wants the chairman of the Board of Selectmen, Whitey Willauer, to sign off on Posner's marketing plan for the affordable units in the Rugged Road 40B, as it is lending Posner money to built Beach Plum.

After the Board of Selectmen hears a presentation by a 40B attorney from Town Counsel Paul DeRensis' office on the selectmen's oversight duties at tonight's meeting, Posner is scheduled to return to the following week's meeting to share his marketing plan for his 10 affordable units and, hopefully, secure Willauer's John Hancock.

"That plan is defined by the comprehensive permit," said Posner. "All of the jurisdiction and approvals is with the Zoning Board of Appeals. MassHousing has requested that the chief elected officer sign off on the plan, so it's going to the selectmen."

With the selectmen chairman's signature, Posner will then begin a 60-day advertising schedule to tell Nantucketers about the affordable units and how they can apply for them. During that time, he will hold a public information session at Nantucket High School in early December.

"We expect that to run into January, then there will be a lottery and nothing will be sold until we go through that whole process," said Posner.

The lottery for qualified applicants should happen in January and Posner hopes to have the first family chosen and in one of the affordable units by sometime in February.

What the selectmen should likely learn during the next two meetings is that as a developer of a 40B project, Posner is only allowed to make a 20-percent profit off his development, although he agreed to take just 15 percent.

Developers building subdivisions under the state's Chapter 40B laws are exempt from local zoning bylaws if 25 percent of their units are built as affordable under strict income formulas for low to moderate buyers. Their applications are reviewed by the ZBA instead of the Planning Board and the review and permitting process is a great more lengthy and complicated.

If Posner makes more than 15-percent profit from this development, he must split those earnings with the town and give it 100 percent of what he nets over 20-percent profit.

Using Posner's pro forma for a 48- unit (an earlier unit count dismissed during the review process) development in 2004, Ed Marchant, the town's 40B consultant generated cost and profit numbers for the approved 40-unit project showing that Posner would earn a profit of $2,834,781 from Beach Plum and would give the town $328,341. These estimates will most likely increase.

The town is wary of 40Bs and the potential for unscrupulous developers to reap huge profits from them, according to Town Administrator Libby Gibson. She referenced two articles in last week's selectmen's packet from The Boston Globe highlighting the specific temptations of developers.

In the Oct. 10 issue of the Globe, Reporter Christine McConville said that since 2000, developers have started more than 400 40B projects across the state and that there are another 450 proposed. According to McConville, Massachusetts Inspector General Gregory W. Sullivan said that some developers are finding ways around the 20-percent profit cap by "engaging in insider land deals, hiring contractors that are connected to them, inflating expenses, or using other 'accounting fictions."

"For certain developers, 40B has been a pig fest," said Sullivan in McConville's story. "The problem extends throughout Massachusetts, everywhere that there are 40B developments."

Nantucket's selectmen are getting up to speed now, said Gibson, so they can keep tabs on both of Nantucket's active 40Bs, even though they have little or no say over the projects until their completion when Posner is bound law to report his profits to the town. As is Cliff Schorer, developer of the 28-unit Abrem Quarry 40B off South Shore Road who needs only final signoff from the ZBA and building permits to get going his development.

To ensure that Posner builds what the Zoning Board of Appeals permitted him to build and that the town gets what is coming to it at the end of the project, Posner has to sign a contract with the nonprofit Housing Assistance Corporation in Hyannis as the independent monitoring agent for his project.

This agent will ensure that all the affordable units are built and that their buyers truly eligible to purchase them. The Housing Assistance Corporation also files annual reports with the town's zoning enforcement officer, Marcus Silverstein and the state's Department of Housing and Urban Development on Posner's progress and at the end of the project, reviews his profits to make sure the town got its agreed upon share.

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