Developer Puts Up $250K to Guarantee Affordable Housing Units

Hearthstone at Hillsborough developer asked for extension for units it agreed to five years ago.

The developer of a senior-citizen community has agreed to put up $250,000 to guarantee the affordable housing units it agreed five years ago to provide.

Representatives of Ryan Homes, the developer of the Hearthstone at Hillsborough project off Weston Road near the Manville border, came to the Planning Board Thursday night to ask for an extension to provide the four affordable units that were part of a lawsuit settlement.

Ryan’s five-year deadline for the units was to expire in December.

But Guliet Hirsch, Ryan’s attorney, told the board that the developer needs an extension until spring to meet the deadline.

Hirsch said that Ryan had agreed with SERV, a statewide, not-for-profit organization serving adults and children working to recover from and cope with a serious mental illness or developmental disability, to subsidize a four-bedroom group home for developmentally disabled adults in the township.

Ryan would give $100,000 to SERV as a subsidy to buy a house in Hillsborough to serve as a group home, Hirsch said.

Under the state’s affordable housing rules, Hillsborough would receive one affordable housing credit for each bedroom in a group home, Hirsch said.

Ryan originally had agreed to subsidize a project by Raritan Valley Habitat for Humanity to subsidize the construction of four affordable units, but that project never materialized.

In the timeline given to the board by Hirsch, SERV would sign a contract to buy the home late this year and close on the property next spring. SERV would get a mortgage for the amount of the house purchase not subsidized by Ryan.

Hirsch said SERV will review the available real estate in Hillsborough and select a property for the group home.

But that proposal didn’t satisfy some board members.

Township Committeeman Frank DelCore, who also sits on the board, expressed frustrated that it took Ryan so long to fulfill the obligation made five years ago.

“It’s been five years,” he said. “Why are we now at the deadline?”

“I’m disappointed we are at this point,” DelCore continued. “I’m not sure I can buy this. You have not lived up to the agreement we made.”

Jennifer Beahm, of CME Associates, the township’s housing consultant, said the Superior Court special master overseeing the township’s affordable housing obligations has endorsed Ryan’s proposal.

But Beahm also said that the township has been trying to work with Ryan but with no success.

“We’ve been trying to work with them for a long time and got no response at all,” she said, adding that the township never received responses to letters that were sent to Ryan.

“At this point we don’t trust you,” Beahm said.

Hirsch, after consulting with Ryan vice president Todd Pallo, offered to place the $100,000 Ryan was going to give SERV into an escrow fund so that the township could use the money if the SERV could not find a suitable property.

Ryan already included 13 affordable units in the Hearthstone community and contributed $325,000 to the township’s regional contribution agreement to Manville as part of Hillsborough’s affordable housing obligation.

But the $100,000 Ryan offered was not enough to ease concerns.

”One-hundred thousand is nice,” said board attorney Eric Bernstein. “But the township doesn’t want to get into the development business at that price.”

Bernstein, who suggested $250,000 be put in the escrow fund, reiterated that the township “doesn’t want to be left holding a leaking bag.”

After conferring again with Pallo, Hirsch agreed with the $250,000, saying it would either be a line of credit or cash in an escrow account.

The money will return to Ryan once SERV closes on the property with a 30-year deed restriction that it be used as a group home.

Ryan will also deliver regular reports to the township on the progress SERV is making on finding and buying a property in the township.


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