MHP's receivership support helps turn around apartment building

SPRINGFIELD, March, 30, 2010 --- City and state officials recently celebrated the turnaround of the 30 Belmont Avenue apartment complex as part an innovative program that uses court-appointed receivers, public grants and private funds to stabilize and rehabilitate the distressed properties where tenants are currently living.

CBS3 Springfield's coverage of the event

Springfield Mayor Domenic Sarno and state officials met at the Belmont Avenue property on Tuesday, March 30 to celebrate the apartment complex’s turnaround and to pledge funds to expand efforts by the city and state to stabilize distressed and foreclosed properties throughout Springfield.

Mayor recognizes receiver 

Sarno recognized the efforts of Craig Spagnoli of Lorilee 30 Belmont Receivership,  LLC, the Receiver who was appointed by the Western Division of the Housing Court in February 2009 to manage the 48-unit, three-building apartment complex that forms a triangle at the intersection of Belmont Avenue and Fort Pleasant Avenue at the gateway to the city’s Forest Park neighborhood. 

At the time Spagnoli was appointed, only 26 of the 48 units were occupied and Spagnoli reported some vacant apartments were being used by squatters for possible criminal activity.

While the city and police focused on the neighborhood and the property, Spagnoli secured a $362,500 Neighborhood Stabilization Loan Fund (NSLF) loan from HAPHousing to make repairs to the three 16-unit apartment buildings, install a surveillance security system, begin the de-leading process, and re-establish an on-site management presence.

1st receiver in state to tap into distressed property loan fund

All 48 apartments are now available to rent and 40 units are occupied.  Spagnoli was the first receiver in the state to receive a receivership loan using HAPHousing’s NSLF loan program, a program from which makes repair funds available to court-appointed receivers. HAPHousing has a revolving loan fund of $600,000, made available by the Massachusetts Housing Investment Corporation’s (MHIC) Neighborhood Stabilization Loan Fund (NSLF), which is a $22 million privately-funded loan fund which supports the stabilization and acquisition of distressed and foreclosed properties in cities across the state.

“This could not have happened without Craig Spagnoli’s dedication to the goal of rehabilitating this property and making it a good, safe home for its residents,” said Sarno. “This is an example of what can happen when the city, the state, the courts, the private sector and local organizations like HAPHousing are all pulling together toward the goal of reinvesting in our neighborhoods.”

MHP supports Springfield's receivership efforts

The Belmont Ave. event marks latest evolution in a coordinated receivership effort that began shortly after the foreclosure crisis began to threaten the stability of urban neighborhoods throughout the state. 

In 2008, MHP began to put increased focus on distressed properties  and committed $250,000 in bank grant funding and additional federal Neighborhood Stabilization Program funds to advance receivership initiatives in Springfield, Worcester and New Bedford.   That resulted in a “mini-receivership” program in Springfield, administered by HAPHousing, which provides small loans to receivers to restore utilities in occupied rental properties.   MHP’s support also enabled the city to hire two law interns, who did research on over 235 properties at risk of foreclosure, and assisted the city in its enforcement of laws for vacant and foreclosed properties.

In the same year, MHP and MHIC created the Neighborhood Stabilization Loan Fund to assist with the acquisition and stabilization of foreclosed properties in neighborhoods hard-hit by foreclosure. MHIC and MHP are the major supporters of NSLF with a combined $17 million in financing from their bank-funded loan pools.

“In order for our support and funding to be effective, we need good partners,” said Rita Farrell, MHP’s Senior Advisor for Community Housing Initiatives. “In Springfield, receivership has worked because the city, the courts, the developer and the non-profit community are all working together." 

City to use CDBG funds for receiverships 

At the event, Sarno also announced that the city has set aside $100,000 in federal Community Development Block Grant (CDBG) funds to provide loans to receivers for emergency repairs.   Sarno said this loan program can be used in combination with the “mini” receivership loan program. 

Sarno also recognized the efforts of Springfield Housing Associates, Inc., a non-profit entity established by the Springfield Housing Authority, which has served as receiver during development of the mini receivership program.

All funding sources will be offered locally by HAPHousing, the Springfield-based non-profit housing organization.  These programs are for non-profit and for-profit court-appointed receivers who are investing in lower-income neighborhoods that have been targeted by the city for neighborhood reinvestment.

“With these funds, the city and HAPHousing will be able to repeat this success and stabilize other properties and neighborhoods throughout the city,” said Sarno.

HAPHousing will serve as fund administrator in Springfield

Going forward, HAPHousing will continue to function as a key coordinator between state funders and the City, working in conjunction with the city’s code enforcement, law and housing departments, the housing court and receivers such as the Springfield Housing Authority and individual receivers like Spagnoli, one of 54 receivers approved by the city to participate in the program.

According to Peter Gagliardi of HAPHousing, “receivership offers an effective way to bring properties back on the city tax roll. This program also provides an important tool in stemming the tide of blight and helps many tenant families and individuals avoid homelessness.”