Town Rejects Lone Bid To Develop Orange Street Affordable Housing Project

The town has rejected the lone bid it received to develop a property on Orange Street into 32 affordable rental units, illustrating the challenging complexities of its efforts to address Nantucket's housing crisis.

The two lots at 135 and 137 Orange Street were acquired by the town's Affordable Housing Trust in 2020 for $3.5 million, the first of its acquisitions under the so-called "Neighborhood First" initiative. Last April, the Trust and the Nantucket Land Bank joined forces to buy an adjacent vacant lot at 141 Orange Street for $1.7 million. Combined, the lots are nearly an acre of land that the Trust had targeted for one of its most ambitious projects: 32 units of affordable workforce rental housing. The plan, according to the Trust's RFP, was to select a bidder for the development and ongoing management of the housing project and enter into a long-term ground lease with that entity.

Oxbow Urban, a Boston-based real estate development company, was the only entity to respond to the town's request for proposals to develop the one-acre property on Orange Street. However, the company's proposal was seeking the town to contribute an additional $15 million to the project even though the RFP had specified there would be no such contributions from the town.

In the town's rejection letter, chief procurement officer and director of municipal finance Brian Turbitt wrote "the town has determined the proposal submitted by Oxbow Urban did not meet the requirements as outlined below. Per the Comparative Evaluation Criteria, Criteria 8, Financial Feasibility evaluated proposers on No financial support from the town except for the contribution of land." 

Nantucket's new municipal housing director Kristie Ferrantella acknowledged the outcome was not what the Affordable Housing Trust had hoped for, but said the process was helpful for the town to better understand the landscape and how such projects can move forward in the future. She added that a new committee will be put together to reissue a request for proposals (RFP) for the Orange Street land, but the Trust is also considering other strategies including potentially combining all of its properties available for affordable housing initiatives into a single RFP.

"It sounds like a setback, but we learned so much through this process that it will make the other RFPs easier," Ferrantella said. "There's now a clear path of what bond counsel is expecting, and what financial advisors have come to explain about how the Trust can participate. I think it also showed us the competition in receiving the bids. Off-island, when towns are doing affordable housing they receive more competitive bids.  This gives us a chance to see how we can reassess this."

The land on Orange Street is just one of several properties the Affordable Housing Trust has acquired since 2019 that remain undeveloped. Those include lots on Bartlett Road, White Street, Vesper Lane, and Amelia Drive, all of which must still make it through the RFP process.

The development of affordable rental housing is a key strategy in the town's efforts to not only address the housing crisis but also stay in so-called "safe harbor" with respect to 40B developments.

In developments with 25 percent of the apartments dedicated to individuals earning up to 80 percent of the area median income, all of the units would be eligible to be included on the town’s “subsidized housing inventory,” or SHI list. That list is used to measure a community’s stock of low- or moderate-income housing for the purposes of the state 40B law. Cities and towns with less than 10 percent of their housing stock meeting the SHI criteria are subject to 40B affordable housing developments that allow greater density than allowed by zoning if 20 to 25 percent of the units meet the state’s definition of affordable housing. Towns that reach 10 percent of their housing stock meeting the SHI criteria or demonstrate meaningful progress toward it are granted “safe harbor” from 40B developments. Nantucket recently achieved safe harbor due to its progress toward the 10 percent goal, but unless additional units are added to the SHI list or other projects are approved and permitted, it will expire on Dec. 11th, 2024.

"The whole community feels the urgency for addressing affordable housing," Ferrantella said. "The properties we’ve acquired have a multi-step process that we're working through."