PEABODY — Tenants at the Tannery apartments on Crowninshield Street can breathe a sigh of relief.
An eleventh-hour deal was signed Thursday that will keep the rents in the 235 apartments affordable until 2058.
“I’m overwhelmed and so grateful,” said Gail Covitz as she choked back tears. “I don’t mean to cry, but I’m so happy I can finally relax and live my life again.”
The 56-year-old Peabody native, who lives on Social Security Disability Insurance, is one of nearly 300 tenants who faced an uncertain future and possible homelessness.
Built in 1915 at the former A.C. Lawrence Tannery, the seven-story masonry building was converted into housing in the 1970s with financing from MassHousing. The state’s affordable housing bank provides developers with incentives, such as low interest mortgages, in exchange for keeping rents low.
But the deal to keep rents affordable expired this month, which would have allowed the landlord, Peabody-based Crowninshield Management Corp., to charge market-rate rents.
That would have meant the cost of a unit in the historic apartment community, now set from $0 to $618 for a studio apartment and $0 to $720 for a one-bedroom, would have skyrocketed. Tenants would be faced with market rate rents of $1,800 to $2,100, according to apartments.com.
While state law would have allowed Crowninshield to hike rents or sell the property to the highest bidder, it is required to allow the state Department of Housing and Community Development (DHCD), or its designated buyer, the right of first refusal on any offer. In this case, DHCD designated WinnCos. of Boston, one of the nation’s largest managers of multifamily housing, as the preferred developer.
But Winn said it needed help to match the $37.5 million offer of a second developer, TrueNorth Capital Partners LLC of Stamford, Conn.
It’s a staggering number considering the building is assessed at $13.6 million.
A team led by Mayor Edward Bettencourt Jr. that included state Rep. Thomas Walsh (D-Peabody), state Sen. Joan Lovely (D-Salem), and executives from Winn, MassHousing, DHCD, hammered out the deal during multiple meetings over the last two weeks.
“I am pleased and very proud to say we have signed [a] purchase and sale agreement with Winn and the Tannery I apartment complex,” he said. “This was a real collaborative effort between a number of officials and agencies that really stepped up to make this happen.”
The mayor’s mission, he said, was to find cash to match the offer, keep rents low, and end uncertainty for residents.
Under the terms of the deal, the city will contribute $1.6 million from the city’s Community Preservation and Inclusionary Zoning accounts, funds which are reserved exclusively for affordable housing projects.
“This was important to provide tenants with relief,” Bettencourt said. “It was a priority to make this deal happen.”
The mayor said he must still get approval from the City Council, but he expects it will be unanimous.
The amount contributed by Winn, MassHousing, and DHCD under the agreement was unclear Thursday night.
Walsh said it’s a huge deal for the city.
“Not only will this protect residents well into the future who would have been displaced if the building went market rate,” he said. “But we would have lost more than 200 units of housing toward the state’s 10 percent affordable goal.”
Covitz, who lobbied lawmakers to keep the property affordable, praised the mayor and the city’s Beacon Hill delegation.
“I have never been politically active,” she said. “But I have never seen a team fight so hard for people that really needed it. I’m so impressed and so glad I told them what tenants faced. I can’t thank them enough.”