Senior rental housing project in Somers Point

Proposal comes with caveats

SOMERS POINT — The city has a chance to see a vacant lot on a prominent corner turned into a four-story, 60-unit age-restricted rental housing complex — but must act now or miss out.

That’s what property owner Sean Scarborough and the potential developer’s attorney Joe Del Duca told City Council on May 26.

Del Duca, general counsel for the Walters Group, said the developer built, owns and operates more than 2,000 affordable housing units in New Jersey.

Scarborough said the complex would be built on 40 percent to 50 percent of the property at the corner of Maryland and Bay avenue when combined with another lot overlooking the wetlands behind Caroline’s restaurant. That would presumably leave room for other development mentioned in passing but not part of this proposal.

Del Duca said the city needs to fulfill its obligation to the Fair Share Housing Center and the county needs affordable senior rental housing, so the project would be an asset to the city.

However, there is a larger aspect the city must consider — the possibility of a $14 million infusion of federal funding for construction.

“This is not simply a development proposal. There are some appendages to it,” Del Duca said.

He said the federal government doles out millions of dollars annually to states, which in turn provide it to developers willing to build affordable housing.

“There is a certain amount of money the federal government is willing to allocate for communities to provide the money necessary to build first-rate, market-rate communities but at an affordable rent,” he said.

Somers Point scores very high on the Municipal Revitalization Index, one of the metrics used to determine its score, making it a good candidate for the funds, Del Duca said. 

Somers Point’s Municipal Revitalization Index score is 44.1. The MRI is the state’s official measure and ranking of municipal distress, rating municipalities from the most distressed (Camden, 1st) to the least distressed (Tavistock Borough, 565th). 

“You have an opportunity that federal funds could be available to build this type of community,” Del Duca said. “When and if you are able to win what’s called 9 percent tax credits, the federal government through federal tax dollars would invest in equity approximately $14 million into this community of between 50 to 60 senior all deed-restricted units.”

He said the city has a strong senior population, “a good bit of renters in the senior population, many are cost-burdened, so it would make sense to be able to let them live in what would be a nice, higher-level community and be able to afford the rent.”

Del Duca said he has had preliminary discussions with the Fair Share Housing Center and believes it is willing to allow the city to substitute senior affordable housing for its family affordable housing requirements for this project.

He said the complex would consist of 50 to 60 units of predominantly one-bedroom units. The Walters Group provides social services, transportation, a nurse’s office, community room, gym and gathering area for classes and computers.

“It’s kind of a full-service situation,” he said, noting it is not assisted living.

The caveat is to qualify for the funds, the developer must have a development agreement with the city, preliminary site plan approval from the Planning Board and a PILOT that awards 6.28 percent of income to the city annually before the application deadline of Aug. 31.

Del Duca said the PILOT “typically provides some income — no one is going to tell you it’s a real estate tax winner but the other part of the community that is going to be built by Sean presumably will be a strong ratable.”

“On balance the city will make out and be able to satisfy its affordable housing obligation,” he said. “We think because of the fortuity of your position and the hierarchy of the scoring system, you have a very good opportunity to achieve this.”

Del Duca said the application process is very competitive.

“It’s a bare-knuckle fight to try to get the money to be able to do this,” he said. 

Marketing of the complex would target the local community but Del Duca said no preference can be given to city residents because federal dollars are involved. He requested and received verbal agreement to move forward.

“If you agree we will move forward and try to make this a reality,” Del Duca said.

Councilman Sean McGuigan asked about the length of the PILOT and whether that also would be the length of the age-restricted deed.

Del Duca said both would be for 30 years but the Walters Group would agree to a permanent age restriction.

He said applicants would have to pass financial, credit and criminal background checks to qualify for residency.

During public comment, city resident Patricia Pierson warned City Council that they were being hustled — “maybe in a nice way” but hustled nonetheless.

“They start out nice and end up a mess,” she said of rental housing complexes.

Scarborough also has entered into a redevelopment grant with the city for Block 1211, Lot 2, at the corner of Bay and Pleasant avenues, where he plans to build the Somers Point Paddle Club, a private swimming facility with a bar and grille.

By CRAIG D. SCHENCK/Sentinel staff