NORTH ADAMS -- The city's Mobile Home Rent Control Board approved a $49 rent increase for Wheel Estates Tuesday, bringing residents one step closer to purchasing the park from the current owner.
The increase, which brings each unit's rent to $345 a month, would allow the tenants association to secure a mortgage from its lender, Resident Owned Communities (ROC) Capital, to purchase the park from current owner Morgan Management.
"I want to thank the board for all your time that you've spent," Tenants Association President Sandra Overlock said following the board approving the increase.
Under state law, the residents have a right of first refusal, meaning they have until March 27 to match the $2.73 million purchase and sales agreement Morgan Management signed with Real Estate Seekers LLC of New Haven, Conn.
The $3.83 million loan includes $2.73 million to match the purchase price and $1.1 million required for infrastructure repairs to roads, water pipes and the sewer system.
Previous meetings between the rent control board, tenant association, and representatives from ROC and Cooperative Development Institute (CDI) were contentious, as board procedures in place are for dealing with private ownership of parks rather than tenant owned cooperatives.
At a meeting on March 13, board members expressed their desire to help residents secure the mortgage, but said a petition showing the need for a rental increase must
Board member Joseph Gniadek said after that meeting, he spent hours calculating figures provided by ROC and CDI, two nonprofits the tenants association paired with to help facilitate the purchase.
"I rewrote and created a new petition that has gone through the solicitor," Gniadek said Tuesday.
The new petition for rent increase considers debt service, he said, a factor not included on the application for corporate-owned parks, but necessary for ROC to submit to the bank.
Gniadek led board members through each line item in the tenant's request. The board turned down a request for three percent rental loss to cover evictions and late payments. Members also approved minor changes in how repair and maintenance were funded, with money for snowplowing becoming its own line item with $24,000.
Chairman Wayne Wilkinson stressed the vote for the increase is subject to the tenants actually buying the park. Another entity won't be able to secure the same increase, he said.
"This is a hypothetical rent increase that will go into effect the day you sign the closing papers," Wilkinson said.
The increase would be in place for a year, he said, with the association returning with actual expenditures.
Gniadek suggested the association create an account for leftover money, rather than dispersing it among the tenants at the end of each year. Gniadek said the funds would be helpful in an emergency.
"You'll always have something there just in case," he said, before wishing the tenants good luck.
To reach Edward Damon, email edamon@thetranscript.com.
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