Will this be the last 40B project for Saugus?

A recent Route 1 apartment proposal may help the town to meet its 10 percent affordable housing requirement

By Mark E. Vogler

Until the town reaches a 10 percent threshold of affordable housing, it is virtually powerless to prevent the development of so-called 40B apartment projects. That’s concerning to town officials who have initiated zoning measures in recent years to limit the development of apartments along Route 1. But selectmen say the latest 40B project proposed for the town – 189 mixed-income multifamily rental units planned by Interstate Properties Management, Inc. near its office building on Route 1 South – could be the last such project of its kind.

“If the current 40B application at 961-999 Broadway is approved, this would put the town well over the state’s 10 percent requirement,” Selectman Michael Serino told The Saugus Advocate this week.

“Consequently, the town would not have to accept any more 40B projects. Moreover, any proposed housing developments would have to abide by the town’s zoning bylaws,” Serino said.

The state law known as Chapter 40B allows the developer to forgo certain local zoning bylaws and restrictions, providing at least 25 percent of its units of a housing project are designated as “affordable.” Saugus’ low or moderate income housing units constitute about 6.9 percent of the town’s total housing stock.

Town notified of preliminary plans

Several town officials, a representative from the Massachusetts housing finance agency (MassHousing) and parties representing local developer Salvatore Palumbo and Interstate Properties Management, Inc. did a site walk last week on land that could be developed near Palumbo’s office building and parking garage. The property is situated near the Holiday Inn Express, off of Route 1 South. The property will be divided into two lots, one will have the office building and garage and conform with underlying zoning (Lot A), and the other, Lot B, will be the comprehensive permit parcel, according to Lynne D. Sweet, the principal of LDS Consulting Group, LLC, which is representing Interstate Properties Management.

“The two lots will share the garage and some access points. The Applicant is proposing 189 mixed income multi-family rental units in two buildings on an undeveloped lot behind their existing office building and parking garage on Lot B. The new development will have 48 units income restricted to households earning at or below 80% of AMI. The main access to the site will be via route 1, between hockey town and the hotel. Emergency access will be via route one through the existing parking garage,” Sweet wrote in an email to The Saugus Advocate. “Building A will have 80 units and be six stories with parking under the first level, and building B will have 109 units and be 8 stories with parking under the first level and access to the existing parking garage. In total, there will be 90 new parking spaces, 89 new garage spaces under building, and the use of 136 parking spaces in the existing garage for a total of 315 parking spaces. It will offer both indoor and outdoor amenities for the benefit of all residents. The property has been designed to create green space over the existing gas easement in front of the buildings. There will be no access into the residential neighborhood to the rear of the property and the majority of the existing tree buffer will remain in place.”

Cogliano supports the project

At least one selectman – Anthony Cogliano, a personal friend of Palumbo – said he supports the 40B project as it has been proposed. “Prior to his leaving Saugus, I spoke with former planning director Chris Riley at length and he was strongly in favor of the proposed 40B,” Cogliano told The Saugus Advocate.

“I have also attended meetings with MassHousing, the developer, his attorney, and the contractor for the proposed project and I am pleased with everything I’ve seen to this point. The development is first class and should be a welcome addition to Saugus. I understand there are residents who are opposed to any new apartments being built and I’m sure there will be opposition to this project,” Cogliano said. “Unfortunately, because Saugus does not meet the criteria of affordable housing set forth by state law, we must build more. We also have a serious shortage with our agreement with the MBTA to build more apartments in exchange for the rail trail. This proposed 40B at 961 Broadway also seeks to add a bus stop which will help decrease the amount of apartments needed to be built for the MBTA in our town.”

Most of the selectmen said they will be monitoring the project cautiously. “Although the Board of Selectmen have no jurisdiction over 40B projects, I will be following this proposed project closely,” Board of Selectmen Chair Debra Panetta said.

“My main concern is that this project doesn’t negatively impact the residents of Forest Street and the surrounding area,” she said.

Selectman Corinne Riley noted that her initial reaction to the project was concern for the neighborhood and “the strain that this development might put on our schools, infrastructure and public safety.”

“Beyond that, my concern is that Saugus has still not reached the 10 percent affordable housing threshold, which makes us subject to 40B projects like this,” Riley said.

“Saugus residents have made it clear that they don’t want more apartments in town. We’ve had building moratoriums and more restrictive zoning changes in recent years, and as well intentioned as they are, they have limited impact with regard to 40B projects, because the Mass Housing Appeals Committee will overrule Saugus and allow this type of development,” she said. So the more important question may be, how and when will Saugus get to 10 percent affordable housing so that we’re no longer subject to 40B projects? This question is better suited for our Planning Department, which our Town Manager supervises.”

The town currently is at a disadvantage, as it hasn’t filled the vacancy left by the departure of the planning director.

Saugus currently sits at 6.88 percent affordable housing, with 10 percent required by state law, according to Cogliano. “This percentage doesn’t include the Towle Brothers project being constructed along Prankers Pond,” Cogliano said.

“When that project comes online Saugus will be at approximately 8.3 percent. The proposed project at 961 Broadway would bring Saugus close to or at the required 10 percent,” he said.

Prior to the proposed 40B development, Cogliano said, he helped the property owner, Sal Palumbo, for two years to rezone his property because he had an Alzheimer’s care facility that he wanted to build there. “In my opinion, that would have been a huge win for Saugus,” Cogliano said.

“The first year the Planning Board gave its stamp of approval for the project, but Town Meeting asked for a continuance. The second year the Planning Board elected not to support the rezoning and forced the property owner to look at a 40B development, which is not subject to zoning,” Cogliano said. “My only goal in supporting the rezoning was to prohibit any access through Forest Street because I know the disruption it would cause in the neighborhood. As it turns out, Mr. Palumbo has assured the town that Route 1 will be the only access point for the 40B as well.”

Cicolini cites “a silver lining”

Board of Selectmen Vice Chair Jeffrey Cicolini noted that the town has “no say” in the approval of a 40B project because these projects are allowed by the state’s legislation. “The town can impose certain restrictions under conservation laws or for specific infrastructure. However, the basic project itself bypasses our local zoning bylaws,” Cicolini told The Saugus Advocate.

“Construction of more apartments is concerning given the current traffic situation on Route 1. However, there is one silver lining to the proposed 40B project. Because it falls under the 40B rules, even though only 25 percent of the 189 units are identified as affordable units, all 189 of the units will count towards Saugus meeting the state’s 10 percent affordable housing requirement,” he said.

“Furthermore, in any typical apartment development project, only 10 percent of the units are required to be affordable. This is the main reason why we have never been able to attain the 10 percent threshold, which continually leaves us vulnerable to these 40B projects,” he said.

“Assuming this project moves forward, the town will perform a recalculation of our affordable housing percentage, for which I am led to believe we will finally achieve the 10 percent minimum percentage that is required. This will help us avoid future 40B applications. As I said, in a perfect world we wouldn’t have more apartments being built, especially those that aren’t part of a mixed-use project,” he said. “However, if this is what finally gets us to the 10 percent level and allows us to avoid/prevent future 40B projects from coming to town and allows us to target mixed use projects that also include medical and research space in addition to commercial space, it may end up having a true silver lining attached to it.”

Selectman Serino said he doesn’t know whether there are any more 40B projects in the pipeline. Selectmen have not received any notification from the state, except for the current application regarding 961-999 Broadway. “However, it is my understanding that since Saugus Ridge was approved behind McDonald’s, that project did add [300 affordable units] towards the town’s affordable housing inventory,” Serino said.

He noted that a 40B project is a state housing project governed by MassHousing. Every proposed project before this agency must include 25 percent affordable housing units. All projects must be reviewed by the Saugus Board of Appeals. Under MGL Chapter 40B, the Technical Assistance Program does administer grants to municipalities for up to $15,000 for the purpose of engaging a third-party consultant to work with the town’s zoning board of appeals in reviewing a proposed project.

“Massachusetts state law requires that every community must have at least 10 percent of their total housing units be affordable housing units,” Serino said.

“Consequently, if a community has not reached the 10 percent goal, they are susceptible to 40B projects which do not have to abide by a communities local zoning bylaws,” he said.

“MassHousing recently conducted a site visit at the property, in order to gather information regarding the project. The town was represented at that meeting. Any comments or concerns regarding the project from the town must be submitted to MassHousing by August 2, 2024.”

Although 40B projects have to set aside 25 percent of the housing units for affordable housing units, 100 percent of the units do count towards a community’s 10 percent requirement.

“As always, my greatest concern is the protection of our residential neighborhoods from aggressive over-development,” Serino said.

“I would like to thank the Town Meeting Members who overwhelmingly supported my sponsored zoning changes that would help protect our residential neighborhoods. I will continue to advocate for our abutting residential neighborhoods throughout our community, including this project.”

A long process ahead

Sweet of LDS Consulting Group, LLC, said that even under the best of circumstances, it would take three and a half to four years before the 40B project becomes a reality. She estimated that it’s a six to eight month process just to obtain a comprehensive permit and proceed with the financing for the project. “The beauty of this project is that we’re going to use a portion of the existing parking garage,” she said.