Over twenty years ago, a group of residents in a small brick building in downtown Turners Falls, Massachusetts contacted Equity Trust (then located in Voluntown, Connecticut) for help. The building, home to two families and the Brick House, a community resource center, was on the market, and the residents were concerned that it would be sold to an investor with different intentions for the site. The group wished to create a strategy for acquisition and ownership by the residents themselves. Equity Trust helped them to explore their options and in 1998 agreed to purchase the building on a temporary basis to give them time to develop a plan for cooperative purchase.
However, life happened, as it is prone to do, and six years later the residents were still not in a position to purchase the building. At the time, Equity Trust was undergoing a difficult transition in the wake of the death of our founder, Chuck Matthei. Meanwhile the teen center was relocating to a larger space nearby, leaving the first floor vacant. So Equity Trust pulled up roots from Connecticut and moved to Massachusetts, where we would occupy that first floor. For the next eight years, Equity Trust operated out of that space, sharing with another nonprofit, farm business consulting group Field to Table. During that time it was beneficial to all its users for us to own the building.
Eventually though (in 2013), we decided to relocate our offices to Amherst, MA, to shorten travel time for the staff. This made room for two more local nonprofits, the Center for New Americans and the Montague Reporter, to move into the first floor commercial space, which they have been sharing ever since. After moving out, Equity Trust convened a stewardship committee comprised of staff, residents, and community members to monitor the maintenance needs of the building and recommend a capital improvement schedule.
And now we are excited to announce that the original vision from the late 1990s was revived, and a new resident-driven plan to acquire, own, and steward the building was implemented, with the transfer of property finally completed in February 2018. A group including the editor of the Montague Reporter, residents of both the second and third floor apartments, and a local general contractor (most of whom were members of the stewardship committee) formed an LLC to hold the building and solicited loans for acquisition from socially-motivated investors from the community. The LLC’s mission is to administer the property as affordable nonprofit workspace and affordable housing and for those living and working in the building to invest in the building together and manage it collaboratively.
To make the property affordable to this group and to future residents, Equity Trust placed an affordability restriction on it at the time of sale, limiting future resale of the building to 80% of appraised value. The restriction will also limit residential rents to fair market value and commercial rents to below-market value to encourage continued use by nonprofits. Equity Trust retains a first option to purchase the building if the LLC ever chooses to sell, which gives us the opportunity to facilitate its transfer to new mission-friendly buyers. We are also supporting the resident purchase with a low-interest loan for part of the acquisition cost.
This transfer frees up Equity Trust staff time from building management that we can now put toward other projects – and it strengthens the Equity Trust Fund, as proceeds from the sale were invested directly into the loan fund, growing the amount available to support similar projects around the country and increasing the proportion of the fund that is permanent equity, which protects the investments of individual lenders to the fund and helps keep our interest rate manageable for our borrowers.