October 20, 2008

Part 4: Low to Mod Housing Project

Part 4 is all about Holy Cross....

I read a story in the Telegram about a property on LaGrange Street by Clive McFarlane. The long and the short of it was that the owners of the condos had walked and that the place was a mess. This property has now been placed into receivership under the state’s Abandoned Housing Initiative. Now the property is managed by Worcester Community Housing Resources.

Although I doubt Cambridge/Hacker would have been mismanaged to this degree and forced to be placed into receivership, I have no doubt that the South Worcester Neighborhood Center would not have been able to pay interest on $1,060,000 loan. This begs the question then what would have happened if Holy Cross had not co-signed on the loan?

By now BankNorth would have foreclosed and taken title to the property. If they had a) decided to rent or b) sold any of the remaining 9 units to people of non low to mod income, a pro rata portion of the grants would have had to be repaid back by whatever PJ (presiding jurisdiction) had give the monies in the first place.

Bottom line.. The fact that Holy Cross has been paying the monthly interest has not only 1) stopped the loan being foreclosed but 2) saved the PJ ( Presiding Jurisdictions) from having to pay back the monies (650,000) that were granted to this project for falling into non compliance. Who are the PJ's? They are the CIty of Worcester and the Commonwealth of Massachusetts.

In other words Holy Cross has taken a bad situation and bought everyone alot of time to make this project, that was intended, to keep all the grants in compliance by paying the monthly interest. My guesstimate is that the monthly interest is $5,000 per month. Thank you Holy Cross!!!!


Jeff Barnard said...

If $5k a month for a single property isn't a "payment in lieu of taxes," I don't know what is!

Anonymous said...

JetBlue expands at Logan...

JetBlue bucks industry trend, has expansion plans for Logan Airport
Airline sees opportunities in charter flight market
By Nicole C. Wong
Globe Staff / October 21, 2008

At a time when the airline industry is scaling back, JetBlue Airways Corp. plans to add employees and more frequent flights at Logan International Airport.

Graphic Passenger traffic
JetBlue, which is the second-largest carrier at Logan, behind American Airlines Inc., said Boston is one of the three most important cities in its growth strategy, centered around attracting more business travelers and contracts for charter flights to transport teams, companies, and other groups.

"We're looking for growth in 2009 - to add 100 or so new pilots, 100 or so flight attendants, 100 or so crew" members who handle ticket counters, gates, and luggage, said Jim Celeste, JetBlue's general manager at Logan.

Airline analysts say expanding in Boston is a savvy move for JetBlue, which offers 26 nonstop flights from Logan, the most of any carrier. The Hub is already JetBlue's second-largest city, behind New York based on the 3.73 million passengers it flew from September 2007 to August 2008.

"Their growth reflects filling in gaps in routes that other airlines have stopped serving or are no longer serving as well as they could be," said Henry H. Harteveldt, principal airline analyst for Forrester Research Inc. "It's very opportunistic and at the same time very carefully planned."

JetBlue hasn't been insulated from volatile fuel prices that are forcing other carriers to retrench at Logan and nationwide. In the past six months, JetBlue eliminated three Boston nonstop routes. But other major carriers at Logan cut more: Delta pulled out of eight routes, and American and US Airways each chopped about 10 percent of their October seat capacity.

Still, Boston has been spared from JetBlue's deeper cost-cutting. The airline industry is reducing fourth-quarter seat capacity in Boston 7.9 percent, compared to the same period last year, while JetBlue is increasing its available seats 1 percent during the same period. And last week, the carrier said it will launch Saturday service between Boston and St. Maarten in the Netherlands Antilles on Feb. 14.

"At the end of the day, Logan works well from air traffic control and it's a user-friendly airport," David Barger, JetBlue's chief executive, told the Globe recently.

As a result, JetBlue plans to continue to grow in Boston, Barger and eight senior executives told local employees this month in Boston at a "pocket session" - a nationally roving, quarterly meeting in which JetBlue employees can ask the New York-based top brass anything.

Executives said the carrier will chase lucrative business travelers by expanding in-flight wireless Internet access from one aircraft to the rest of the fleet next year, revamping the frequent-flier program in the first half of 2009, better publicizing refundable fares, one-way tickets, and extra legroom, and offering more frequent Boston flights.

"The business customers are saying, 'Give me at least three a day, or four a day, or five a day,' " Barger said. "I look at the future of Boston as one of greater frequency" of flights.

He also sees a chance for additional revenue by putting JetBlue's aircraft to use during seasonal dry spells in demand. Just as Delta carries the Red Sox, JetBlue could one day be "flying the Bruins or the Celtics" or college football teams, Barger said.

JetBlue ramped up its charter concept this year and scored about 80 charter flights this month alone, including ones carrying Republican vice presidential candidate Sarah Palin and her entourage. The carrier said its nascent charter operations have revolved around New York, but Boston would be a good place to branch out.

"Boston's been great from the standpoint of the colleges and universities. Then you start talking about the sports teams and their needs. Then the businesses," Barger said. "This is a really good landscape from the standpoint of charters."

Pursuing the charter business is a smart way for airlines to capture more revenue, say some industry analysts, especially since it can flourish even when fuel prices skyrocket.

That represents a big opportunity for JetBlue since charters only account for 0.18 percent of its total revenue, compared with 0.41 percent of Delta's and 0.57 percent of Northwest Airlines Corp.'s total revenue, according to aviation consultant SH&E Inc.

"That is a very valuable piece of business," said Terry Trippler, an airline consultant who operated two charter airlines in the 1970s. "You can write a charter contract based on fuel. If the fuel is higher, then the price will go up accordingly, so you have that protection."

Nicole C. Wong can be reached at nwong@globe.com.

Jahn said...

$5,000 a month works out to only 5.75% interest....if this $1,040,000 is a constr loan that's quite low rate of interest.

As Jeff said, the 5k could be construed to be a PILOT payment........once again I am opposed to pilot payments...but imagine if the teachers, cops, and firemen saw what is in substance a voluntary guarantee of debt for low income housing morphing into a $5k monthly payment that at least temporarily gets the city off the hook for re-payment of home funds.

Let us also not forget, the 9 vacant units are running ast least $1,000 per in months in property taxes as well ands I'll betcha close to another $1,000 per month in insurance costs.

I'll bet a Suneys Fish & Chips entree that HC is on the hook for at least $7,500 a month.

So now the trustees and board of directors at HC have an interesing business decision/dilemma.......do they keep forking over 7500$ per month (90,000 per yr).............or do they let it go into foreclosure and have to cough up the difference between what the 9 remaining units eventually sell for and the $1,040,000 mortgage due on the place.....AND.....AND.......AND......run the risk of the city being BS at them when the city has to cough up the Home Funds (another 225,000??) b/c the units ended up foreclosed in the hands of a NON low income owner.....i.e. BankNorth.

My speculation, Havana Jim McGovern (my fed'l taxes dollars) will probably pull this one out of the fire..............if HC agrees to make future PILOT payments.

Paulie's Point of View said...

lets hope it goes into foreclosure and some young couples with jobs buy them and live in them..enough of his continual low income bull shit talk..I am tired of it:>)

Lets start talking about productive folks buying and supporting Worcester...