Cost Overages At Wiggles Way Apartments Prompt Request For Another $2.5 Million From Town

Following the discovery of "significant cost overages" during the ongoing construction of the Wiggles Way affordable workforce apartment complex off Fairgrounds Road, the non-profit agency Housing Nantucket requested an additional $2.5 million from the town to complete the project.

The request was ultimately endorsed by the town's Affordable Housing Trust earlier this month, and the Select Board voted Wednesday to approve the additional $2.54 million in funding for the project. Housing Nantucket will contribute another $1.2 million to cover the full extent of the cost overages driven by subcontractor labor and material expenses that exceeded the amounts the builder originally anticipated. 

The Wiggles Way project will ultimately include 38 bedrooms in 22 new apartments across eight buildings at 31 Fairgrounds Road. The apartments - which include one-, two-, and three-bedroom units - are restricted to eligible households earning between 80 percent and 150 percent of Nantucket's area median income. Six will be reserved as "municipal preference units" for town and school employees.

Following the groundbreaking for the project in January 2022, the hope was that the apartments would be finished and ready for move-in by that fall. However, the completion date has been pushed back several times and faced further delays after builder Billy Cassidy suffered health issues earlier this year. The additional funding request approved last week was the second significant infusion of cash from the town since the start of the project, as the Select Board had already signed off on an earlier request for $2.5 million to cover overages in July 2023.

"Our primary goal is to move residents into their new homes as quickly as possible while avoiding further delays," said Housing Nantucket executive director Anne Kuszpa. "The funding from the town was a critical component in ensuring the project continues without an interruption due to funding shortages."

The additional $3.87 million (the amount being covered by the town and Housing Nantucket) needed to complete the project brings the total cost for the Wiggles Way apartments to $18.48 million. That figure does not include the initial $3.6 million grant from the town to Housing Nantucket to acquire the land from the Coffin family in 2021.

The funding sources for the project include:

• $8,469,000 loan from the town of Nantucket's Affordable Housing Trust
• $6,255,000 grant from the Affordable Housing Trust
• $600,000 from the American Rescue Plan Act (ARPA)
• $3,159,000 from Housing Nantucket

Following Cassidy's health issues earlier this year, Housing Nantucket engaged Stephens & Company, a Nantucket-based general contractor, to bring the project across the finish line with a new completion date of March 2025.

"Through this process, we gained greater clarity into the balance of work required to complete the project," Kuszpa said. "Significant cost overages were revealed, prompting the need to secure additional funding."

During the Select Board's review of the latest funding request, Steve Hollister, who is serving as the owner's agent to help manage the construction effort, provided further details and emphasized that a projected cost of completion and a full audit had been submitted to the town ahead of last Wednesday's meeting.

"We've worked with all of the subcontractors directly to establish those balances, define the remaining scope of work, and identify the costs associated with all of that remaining work," Hollister said. "And so one of the things I'm here to talk about is what's different this time around, and that is a primary difference. We've worked with each of those subcontractors directly. We know what the finish line is. We are as close as we have ever been. So, this project is right around the corner. If you were to walk through these units, they look like you could sleep there tonight. The preponderance of this funding is going to be going to those subcontractors, those subcontractors who have sort of willingly worked with us to find a solution to this problem. Many of them have said, 'Okay, we'll continue to work. We know this is an important project. We know it is worthy of our efforts.' And so that's where this money is going to be going. We do have a new management structure. The financial management of the project from this point forward is flowing through our Division of Capital Asset Management-certified contractor. We have an invoice review process that is two-stage, so it will go first to Housing Nantucket, who will pay those invoices using a revolving line of credit of their own resources, and then the invoices thereafter will go to the town for further scrutiny and reimbursement. So there's sort of a dual checks and balances system."

Earlier this year, Housing Nantucket held a lottery for one of the six apartments available to households making 80 percent of Nantucket’s area median income or less, and the demand was huge. The non-profit agency received 176 applications, which was the highest demand it had seen for any recent lottery, and all but one of the lottery applications came from island residents.

The rents charged by Housing Nantucket will vary depending upon the size and based on the tenant’s income but will range from $2,100 per month for a one-bedroom unit and up to $3,400 per month for a three-bedroom unit available to tenants making up to 150 percent of area median income.

The Wiggles Way affordable housing development began in 2021 when the family of Fred "Wiggles" Coffin - who passed away in 2004 - decided to sell its two-acre property at 31 Fairgrounds Road to Housing Nantucket for $3.6 million. The non-profit was able to complete the acquisition with taxpayer funds from the town's Affordable Housing Trust, which were approved by Town Meeting voters in 2019 as part of the so-called "Neighborhood First" program.

A nearly $1 million solar power component at the development, in which solar panels were installed atop a parking pergola - is the first of its kind on Nantucket. The solar power project was supported by a grant from the Remain Nantucket Housing Fund at the Community Foundation for Nantucket. It's projected to generate 133 MWh annually to achieve net-zero energy usage for the site.

"Ultimately, this project will be one we can all be proud of, and we are committed to maintaining that focus," Kuszpa said. "The design and quality of the housing are superb. We prioritize using local businesses and contractors to perform the work. Although it has taken longer than anticipated, the project has delivered numerous benefits throughout its construction. It has been instrumental in maintaining Nantucket’s Safe Harbor status against unfriendly 40B developments since 2022 and will provide 22 units to the island’s Subsidized Housing Inventory in perpetuity."

The Select Board ultimately voted 4-0, with Malcolm MacNab abstaining, to support the additional $2.54 million in funding.

"We have learned from this," Select Board chair Brooke Mohr said. "There are financial procedures and policies that we will make standard on town-funded projects going forward, but fundamentally, we're getting - and I toured it this morning, I've been through it a number of times, literally from the foundation, I've been over there every phase of this project - and this is an incredibly high-quality project, and we will be proud to have invested in it and to have it in our portfolio of year-round housing for decades to come. So it's really critical, and there are folks waiting for these units, so I'm very much in favor of this additional funding, and everyone should look in the packet. There's some context about other projects we've been doing and what their per-square-foot-cost is and what this landed at, and it's really well within range of current construction costs in the last five years or so. So, this is not a case of something costing 30 percent more than it should have. It's more than what was hoped it would be, is the way I would describe that, so I'm supporting this."