Present at the Monday, Aug. 19 regular Village Council meeting were, from left, Council members Trish Gustafson, Brian Housh, Carmen Brown, Gavin DeVore Leonard and Kevin Stokes, as well as Village Manager Johnnie Burns. (Video still)
Village Council’s low-income housing talks press ahead
- Published: September 3, 2024
Village Council members reconvened after their annual summer break on Monday, Aug. 19, to broach a recurring topic: siting a potential low-income housing development on school district-owned land.
Over the last several months, Village Council and the YS Board of Education have weighed the possibility of partnering with local nonprofit YS Home, Inc. to pursue $15 million in low-income housing tax credits to build a 50-unit affordable housing development on the Morgan soccer fields on East Enon Road.
As the News has reported in past issues, a number of logistical obstacles must be hurdled before both public entities can agree to greenlight Home, Inc. to apply for those tax credits — namely, unencumbering the 3.6-acre soccer fields of their collateral and financial ties.
To that end, on Monday, Council members unanimously voted to offer $12,500 in legal fees, which will cover the future costs of counsel from Dayton-based Bricker Graydon LLP — the firm for which Village Solicitor Amy Blankenship and the school board’s legal counsel, Ben Hyden, work.
This amount follows a previously authorized $7,500 to cover the legal fees of a bond attorney to advise Council on “any legal restraints on the Yellow Springs School District selling certain land to the Village for the possible development of low-income housing.” Per a receipt obtained by the News, Cincinnati-based law firm Dinsmore & Shohl LLP billed the Village $2,850 for its legal services — $4,650 under what Council budgeted — in outlining the logistical and legal obstacles ahead.
The appointed bond attorney — Bradley Ruwe of Dinsmore & Shohl — reported back to Council in early July, stating that disentangling and eventually overcoming the complex “layers of encumbrances” on the soccer fields would necessitate a great deal of communication with and outreach to the land’s financial stakeholders and bondholders.
Peeling back those “layers” entails re-negotiating the lease-purchase agreement into which the school district entered with Huntington National Bank in 2020, when the district placed a collateral lien on the land against the schools’ track and athletic stadium improvements project.
Additionally, Village and district counsel must negotiate with U.S. Bank Trust Company — which operates as a trustee for investors that purchased shares in the district’s lease agreement — as well as Build America Mutual, or BAM, the bondholder undertaking risk when it comes to the repayment or principal and interest on publicly traded shares of the land. As previously reported in the News, BAM represents an “unknown number of entities,” as described by Council President Kevin Stokes.
According to Solicitor Blankenship, the $12,500 approved at last Monday’s meeting would cover approximately 30 hours of attorney time in parsing out those challenges — that is, freeing up the land of those encumbrances, later to potentially be sold to the Village for the low-income housing project.
“And 30 hours would get you a significant amount of work,” she said.
Still, Council member Brian Housh suggested that the body ought to have approved an even greater amount of money to cover the costs of untangling the land from Huntington, U.S. Bank, BAM and all the entities underneath BAM’s insurances.
“It would be silly if we had to come back to approve another $2,000 or $5,000,” he said.
“And if we do, it’ll be alright,” Council member Carmen Brown assured him.
Intergovernmental agreement
Once Council agreed on the $12,500 amount, they turned their focus to the broader resolution which precipitated that discussion: to authorize the establishment of an intergovernmental memorandum of understanding between the Village and the school district.
According to the language of the resolution, the goal of the legislation was straightforward: to engender “clear communication” and “delineation of financial responsibility” between the two entities as they move forward in their pursuits of the tax credits and the unencumbered Morgan fields.
“I love this intergovernmental agreement,” Housh said. “We all need to be fully updated on what’s going on.”
While there has yet to be a joint meeting between Village Council and the school board, one is likely to occur mid- to late-September, Council members indicated.
One decision neither Council nor the school board has yet made is what to do about finding a replacement site for Morgan soccer fields, which at present is the home turf to around a dozen local, club and school soccer teams.
School board member Amy Bailey inquired about this point at Monday’s Council meeting.
“The concern I have is the lack of language in this document that doesn’t specify that it’s contingent upon the school district having land to purchase and replace what we’d sell to you,” Bailey said.
“That’s something that everyone has vocally and verbally agreed upon — everyone knows it’s important for the school district to be made whole or ‘whole-plus,’” she added, referring to the July 11 regular school board meeting wherein board members approved a resolution to pursue a sale of the soccer fields, provided a replacement site for soccer activities is secured.
Council President Stokes tarried over including such a provision in the resolution before Council last Monday.
“That makes part of this agreement contingent upon something we have no control over,” Stokes said.
Solicitor Blankenship recognized this concern: “The risk, of course, is that Council could expend all these legal fees to unencumber the land, and if the [district] is unable to acquire the replacement acreage, then the whole deal goes by the by. Then the only people who make money from this are the lawyers — which is something I really want to avoid.”
Council member Housh reminded his colleagues, Bailey and others that the whole initiative — purchasing the Morgan fields, relocating the soccer programs elsewhere and eventually erecting a 50-unit affordable housing development — is entirely contingent on the successful reception of the $15 million in tax credits, the application for which is due next February.
“What we’re talking about is securing the option to purchase,” Housh said, alluding to the fact that the Village would only purchase the district-owned land if the federal subsidies were awarded to Home, Inc. and a cooperative development company.
Next steps
As Housh outlined for his fellow Council members in a memo, a number of forthcoming actions are on the docket — beyond the convening of an intergovernmental group.
First up: subdividing the 3.6 acres of the school-owned land.
At the July 11 school board meeting, board members agreed to submit an application to the Village Planning Commission to subdivide the Morgan Fields from the rest of the land it abuts, and to rezone the land from low-density R-A to high-density R-C in order to accommodate the 50 units of the proposed development.
Village Planning Commission is set to meet on Tuesday, Sept. 10 to discuss the matter. The meeting is open to the public.
Following or occurring in tandem with that, per Housh’s memo, is removing the lien on the Morgan fields with the aid of the legal counsel, confirming site control/option to purchase the school property, determining a replacement property for the soccer programs and then, identifying a community housing development organization, or CHDO — one with which Home, Inc. can partner to make the organization more eligible to receive the $15 million in tax credits.
Until June of this year, Home, Inc. had worked with St. Mary Development Corporation in the pursuit of this project. As previously reported in the News, Dayton-based St. Mary walked away from villagewide discussions, citing time-intensive procedural impediments that would likely hamper a Feb. 2025 tax-credit application.
Housh told his colleagues last Monday that the Village would have a hand in working with Home, Inc. in selecting a replacement CHDO.
“We’re picking the developer,” he said. “We’re going to work with our partners and be in the mix.”
Following unanimous approval from Council members of the resolution to establish the intergovernmental body to continue the efforts to elucidate and pursue the low-income housing tax credit application process, as well as the proposed sale and rezoning of the Morgan fields, some Council members reiterated their optimism for the ongoing initiative.
“We have defied everyone who said we couldn’t move forward with this,” Housh said. “I think we’re in incredible shape.”
“Yes, we want to be a catalyst in moving this forward,” Stokes said.
CBE unlikely site for housing
As for the potential site for the 50-unit, low-income housing development, the Morgan soccer fields appears to be the only one left in the mix.
When Home, Inc. first brought the possibility of applying for the low-income housing tax credits to Council chambers last year, the Village-owned Center for Business and Education, or CBE, was, like the Morgan fields, an option on the table for the proposed development.
Like the adjacent soccer fields, the CBE scored highly on the opportunity index as outlined by the Ohio Housing Finance Agency, or OHFA — the state agency which awards the tax credit subsidies.
Located in the western reaches of Yellow Springs, the 35-acre CBE is home to Antioch University Midwest and marijuana producer Cresco Labs. Presently, the land is subject to restrictive covenants that allow for only commercial uses; residential uses — including the creation of a 50-unit housing development — are strictly prohibited.
Until recently, some Village decision-makers sought to amend those covenants with the majority consent of Cresco and Antioch University administrators — thereby making the CBE a viable alternative for the affordable housing opportunity.
After some outreach, the verdict is in: The CBE will likely not be the site of housing of any kind in the near future.
“Cresco understands the need for an increase in affordable housing in Yellow Springs and hopes that a suitable site can be found for this project,” wrote Cresco Executive vice President John Sullivan to Council earlier this month.
“Cresco is also concerned about the introduction of residential housing immediately adjacent to our manufacturing facility. With our anticipated facility expansion and increased production, Cresco fears the increased truck traffic, construction noise, and manufacturing activity will be incompatible with the high quality of living those residents will deserve,” Sullivan wrote.
In other words, Cresco — one of the three entities abiding by the CBE’s restrictive covenants — says “no” to putting a 50-unit housing development on the CBE. To amend those covenants, all three occupants of the CBE land — that is, the Village of Yellow Springs, Cresco Labs and Antioch University Midwest — must be in consensus.
For Antioch University’s part: “Given the significant potential impact a project of this nature would have on Antioch University, this is a matter that would require board approval,” wrote Chancellor William Groves last month, adding that the next board meeting is in late October.
Despite this news, Council member Housh again struck a tone of optimism — he said the CBE may still be a potential site for the replacement soccer fields.
“Even with their ‘no’ [for housing] it’s still in play [for new soccer fields],” Housh said.
Council President Stokes countered: “I hear the words you’re saying, but I think that a negative response from our covenant partners negates the potential for rec soccer fields, too.”
The next Village Council meeting is Tuesday, Sept. 3, at 6 p.m. in Council Chambers, on the second floor for the John Bryan Community Center.
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