Nick Rees Oct. 26, 2009, 1:21pm
BOSTON (Legal Newsline) - The developers of a condominium complex in Braintree, Mass., have agreed to a $2.275 million settlement with state Attorney General Martha Coakley resulting from compliance with the state's affordable housing law.
Chapter 40B - Massachusetts' affordable housing law - restricts the profit a developer can make on affordable housing projects, which is capped at 20 percent for Turtle Crossing Condominium Complex pursuant to an agreement between the developers and the town of Braintree.
The development of affordable housing is encouraged under chapter 40B by granting developers waivers from zoning and other local ordinances and bylaws. In return, the developers commit to earning a limited development profit. Developers are limited under the law to a reasonable profit on the affordable housing projects that are developed.
"We are pleased that the developers' have agreed to pay back this money to the town of Braintree and the Commonwealth," Coakley said.
"Chapter 40B offers considerable benefits to affordable housing developers, but in exchange requires that developers must accept reasonable profit levels. Our office will continue to focus on developer compliance with the cost reporting and profit limitation requirements of the law."
Turtle Crossing is being developed by Commerce Park Housing Associates, LLC, a limited liability company jointly formed by Fish Commerce, LLC, and Messina Commerce, LLC, with the express purpose of developing Turtle Crossing. Commerce Park received a Comprehensive Permit pursuant to chapter 40B in 2003 to develop Turtle Crossing.
A draft report submitted to Braintree in February by the Massachusetts Housing Financing Agency concerning the Cost Certification process, which is the process that a developer uses to certify revenue and costs at the end of a project for the purpose of determining allowable profit, lead to an investigation into Commerce Park.
The developers' reported costs for land acquisition and other costs related to the project, including brokerage fees and the treatment of insurance proceeds, were scrutinized by the attorney general's office.
The $2.275 million payment by Commerce Park will settle any claims arising from the investigation into their chapter 40B status and claims related to the chapter 40B cost certification process.
Under terms of the settlement, $1.8 million of the payment will go to the town of Braintree with $1 million placed in Braintree's affordable housing fund and $800,000 delivered to Braintree for other public uses. The remaining $475,000 will go to the Massachusetts General Fund.