Dwight Co-Op Deal Advances

When the feds move forward with a foreclosure on the Dwight Street co-op complex, the city is ready to buy the property — if it can find a developer for the apartments.

The City Plan Commission Wednesday night unanimously approved a deal that could transfer ownership of a decades-old Edgewood Avenue housing co-op to the city from the federal Department of Housing and Urban Development (HUD).

That assumes the city’s able to buy it first. That’s still open to question.

The city has right of first refusal on the property, and would pick it up for a dollar. But the deal will happen only if the city has closed negotiations with a developer whom it can pass the property to — and if it closes negotiations with HUD.

HUD plans to proceed with foreclosure sale in mid-May. It’s negotiating with New Haven to allow the city to buy it first. But the two sides are still trying to work out the terms, including how much of the housing has to remain reserved for low-income families, and how many million dollars of repairs the complex needs.

The Dwight Co-op Homes stand on Edgewood Avenue across from the old Dwight School. Since 1969, the 81 homes have operated as a co-op for low-income families. For decades, it ran successfully. Then things began to fall apart 10 years ago and the co-op fell into debt to HUD, which holds the mortgage on the property. Read the full story about the co-op’s decline and the current state of city-HUD negotiations here.

Now HUD has initiated foreclosure proceedings and the city has been working to preserve the co-op as affordable housing.

The co-ops are one of several 1960s-era government-backed housing experiments in town that offered safe, well-kept communities for working-class families for decades, but then fell into financial trouble and physical disrepair.

City Economic Development Director Kelly Murphy has said she hopes the Livable City Initiative (LCI) can buy the property from HUD and turn it over to a developer to run. That developer could be a non-profit organization or a for-profit business. She’d also like flexibility to allow some of the units to be rented to middle-income families; she said mixed-income complexes are more stable.

On Wednesday evening, LCI staff Evan Trachten presented City Plan commissioners with the proposed sale plan, which needs the commission’s approval. Trachten said the city would act as a ​“pass-through” between HUD and a developer. The city would buy the mortgage for $1 and sell it to a developer for the same price.

The buildings are in need of a renovation of approximately $4 million, according to a City Plan report. The city is in negotiations with a developer, but no deal has been finalized, according to the report.

Trachten said the city is hoping to preserve affordable housing and to prevent the Dwight co-op from falling into private hands, as another New Haven co-op, Trade Union Plaza did. ​“That was horrible,” said City Plan Commission Chair Ed Mattison.

However, if the city does not have a deal with a developer by the time HUD follows through with its foreclosure, it will not buy the property, and foreclosure will occur. Contacted before the meeting, Murphy said that she couldn’t comment on the negotiations ongoing among Dwight Co-op, a developer, and HUD.

The matter will be heard by the LCI board of directors on March 31.