Red flag on 40B plan spurs call for denial
Duxbury officials say the developer of a controversial affordable housing project in their town and neighboring Kingston may be skewing numbers to boost profits. They have asked the state to deny initial approval of the project and conduct its own appraisal.
Town officials say they doubt that Tarkiln Commons Development LLC recently paid $9 million for 9.4 acres of bogs and vacant land in Duxbury and Kingston. Just four years ago, the land sold to Tarkiln Road Realty Trust for $300,000. Under the state's affordable housing law, known as Chapter 40B, developers can collect profits equal to 20 percent of the value of development costs, including land acquisitions.
The town has asked the Massachusetts Housing Finance Agency, which initially approves most 40B projects, to deny an eligibility letter for the Commons at Tarkiln, arguing that the sale price is "simply not credible," according to a letter sent by selectmen on May 21 to the agency. A copy of the letter was obtained by the Globe.
"It's extraordinary," Selectman Jon Witten said of the land's increased value. "It raises a lot of questions."
William D. Rounds, a Taunton attorney who is representing Tarkiln Commons Development LLC, could not be reached for comment earlier this week, nor could the principals of the company.
While the town's letter provides no evidence of wrongdoing, Duxbury's inquiry comes at a time of greater state scrutiny of profit margins for affordable-housing developments. An investigation by the state Inspector General's Office revealed earlier this year that 40B project developers sometimes jack up profits by exaggerating land values. In April, Mass Housing yanked support for a 40B project in Sharon after a town appraisal valued the land at $2.5 million, a quarter of what the developer told the state it was worth. Duxbury officials in their letter to Mass Housing compared their case to Sharon's.
Eric Gedstad, a Mass Housing spokesman, said the agency is considering Duxbury's concerns as it weighs Tarkiln Commons Development's application, and could not comment further.
"The proposal is under review and nothing has been decided yet," he said. "It's a complicated proposal and there are a lot of issues to sort out. We are going to give due diligence to each issue."
Commons at Tarkiln has been marred with controversy since it was pitched a few months ago. The proposal calls for 75 units, including roughly 19 set aside for affordable housing. Duxbury would have about 11 full-price units and four affordably priced units, while Kingston would have about 45 full-price units and 15 affordably priced ones.
Kingston officials last month also sent a letter to Mass Housing, asking it not to approve Commons at Tarkiln. However, the town did not question the value of the land. Instead, Kingston officials stressed that they believe other projects in the works will ultimately help the town meet a state standard of having at least 10 percent of its housing stock as affordable.
Kevin R. Donovan, Kingston's town administrator, said scrutinizing project costs, such as land acquisition prices, is beyond the scope of the town's responsibility in reviewing 40B proposals, but is something that Mass Housing should pursue.
"If Duxbury felt the need to raise it, that's their decision," Donovan said. "We're more concerned about the town impacts."
The sale price of the land is just one of many issues raised by Duxbury in its eight-page letter to Mass Housing. Other concerns include the project's effect on rare species of wildlife and the developer's failure so far to decide on whether to connect with town sewer or septic systems or whether there would be age restrictions for inhabitants.
"We're hoping they will reject the eligibility letter based on our concerns," said Richard MacDonald, Duxbury town manager. "There are too many outstanding issues."
James Vaznis can be reached at vaznis@globe.com. 
