HomeIndependentIndependent NewsKeyport council members table agreement with senior complex operator

Keyport council members table agreement with senior complex operator

KEYPORT — Amid concerns about potential rent increases, a proposed ordinance that would, if adopted, extend a financial agreement between Keyport officials and the operator of a senior apartment complex has been tabled by the Borough Council.

The legislation is intended to authorize a seven-year extension to an existing financial agreement between Keyport and Bethany Manor Urban Renewal, LLC (Bethany MUR).

Bethany MUR, a subsidiary of Capital Realty, is the owner of Bethany Manor, a 331-unit apartment complex for senior citizens on Broad Street.

The ordinance was introduced by council members in July and a public hearing and possible vote for adoption was scheduled for Aug. 15.

During the Aug. 15 meeting, council members voted to table the ordinance’s public hearing and possible vote for adoption to Sept. 20.

On Sept. 20, council members once again voted to table the ordinance’s public hearing and possible vote for adoption.

As of Sept. 23, the new date for the ordinance’s public hearing and possible vote for adoption had not been announced by municipal officials.

Borough Council President Kathleen McNamara said the ordinance was tabled in response to concerns that have been expressed by Bethany Manor residents regarding potential increases in the rent they pay to the operator of their building.

McNamara said borough officials are seeking to continue discussing the possible rent changes before moving forward with the ordinance.

According to the ordinance, borough officials approved the financial agreement with the apartment complex’s original owner in 2015. The council’s action consolidated two financial agreements into one agreement for a payment in lieu of taxes (PILOT) in connection with the rehabilitation of Bethany Manor.

In a PILOT agreement, 95% of a developer’s annual payment goes to the municipality and 5% goes to the county. No money from the PILOT is provided to other entities (i.e., a school district).

Under state law, only the surplus of the developer’s annual payments under a PILOT can be provided to other entities such as a board of education.

Provided in the agreement is an annual service charge paid for the properties in lieu of taxes. According to the ordinance, the annual service charge is equivalent to 10.5% of annual gross shelter rents for the rental units at Bethany Manor.

Borough officials supported the transfer of Bethany Manor to Bethany MUR in 2021, according to the ordinance.

Bethany MUR is in the process of entering into a new mortgage with the U.S. Department of Housing and Urban Development (HUD) for financing of the property for a 35-year term.

As a condition of the financing, HUD requires a tax exemption of the property to remain in effect for the entirety of the mortgage term.

The current term of Bethany MUR’s agreement with Keyport is scheduled to end in 2050, which is 28 years away from 2022 and seven years short of the 35 years required by HUD, according to the ordinance.

The seven-year extension to the PILOT that would be granted by the ordinance is intended to allow the financing for Bethany Manor to meet HUD requirements.

McNamara said the federal financing being sought by Bethany MUR includes funds for improvements to the property.

After the ordinance was introduced, McNamara said, members of the governing body were contacted by Bethany Manor residents who expressed concern about notification of rent increases.

“Over the past two months there have been numerous conversations between representatives of HUD, related housing authority staff, various attorneys, including those on behalf of the owner, and borough representatives to examine changes to tenant portions of rent resulting from the ownership change,” the council president said.

“A meeting is expected to take place shortly with all parties involved in order to sort out all of the issues and to provide an opportunity for the residents to share and receive responses to their individual concerns and questions.

“The governing body and borough counsel tabled the ordinance to allow these ongoing, and to date productive, conversations to continue before moving forward on the ordinance,” McNamara said.

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