Each night for the last year, homeowners at Farrington’s Mobile Home Park went to bed knowing that having a future in their homes wasn’t a guarantee. The 117 lot community was put on the market for $5 million when its owner, Sandra Farrington, died last year. Residents worried the land would soon be sold to a developer who would force them from their homes. Beginning last week, however, those same owners rested a bit easier, having finalized a deal to jointly own and manage their community as a cooperative and saved over a hundred affordable homes in Burlington.
Now known as the North Avenue Co-op, the resident owned community joins a growing number of manufactured home parks securing their financial futures and improving their neighborhoods by forming cooperatives. North Ave Co-op is the sixth Vermont community converted by CDI, its 21st overall, and one of 171 nationwide in the ROC USA network. In these resident-owned communities, homeowners in the community each buy one low-cost share. Each household has one vote on matters of the community. The members elect a Board of Directors to act on day-to-day issues and vote as a membership on larger matters like the annual budget, by-laws and community rules. While there are existing practices for converting from traditional ownership to a co-op, the North Avenue story required some out-of-the-box thinking and innovative business practices.
“It’s been a long journey to get here, but it is worth it” said North Avenue Co-op President Rik Fenton. The Co-op’s Board of Directors has met weekly over the last year to organize residents and to develop a plan for operating the mobile home park. “The process of forming a co-op and buying the park has allowed many park residents to become closer as we have worked towards the important, common goal of saving our homes” added Co-op Secretary Jeanne Lieberman.
Two nonprofits, Cooperative Development Institute (CDI) and Champlain Valley of Economic Opportunity (CVOEO), as well as the City of Burlington helped to organize North Avenue Co-op. CDI is a certified technical assistance provider in the ROC USA ™ Network, a nationwide network of non-profits founded to promote and support resident control of manufactured housing communities. CDI helped the residents’ cooperative negotiate a deal with the Farrington Estate to purchase the community for $3.575 million, and it was financed through an innovative, first-of-its-kind municipal bond issued by Vermont State Housing Authority (VSHA), and purchased by Northfield Savings Bank. Richard Williams, the Authority’s Executive Director, stated “VSHA is pleased to have had the opportunity to use its resources for such a worthwhile endeavor. This is the first time we have used bond financing for a project of this sort. Our participation in financing the mobile home park purchase fits the Authority’s statutory mission. We look forward to continue working with CDI and the resident cooperative.”
The Vermont Community Loan Fund provided secondary financing to complete the deal. IRS restrictions required that a CDI-affiliated nonprofit was the buyer and borrower on the transaction. Once these loans are paid or refinanced, North Avenue Co-op will officially assume ownership of the land. Until that time, the community will be run by the resident’s cooperative.
Multiple offices of the City of Burlington also assisted the cooperative, led by the office of Miro Weinberger as well as CEDO, Planning and Zoning, Department of Public Works, and Code Enforcement. In addition, the Housing Trust Fund of the City of Burlington provided grants for due diligence expenses, funds to support the preservation of green space in the community, and a future commitment toward infrastructure replacement. The involvement of the City has been and will be key to the improvement of the community.
“Congratulations to the residents of the North Avenue Co-op for succeeding in their difficult, ambitious goal of owning the park and taking responsibility for its future,” said Mayor Miro Weinberger. “Resident ownership of the park is also a great outcome for Burlington, as it preserves more than 100 affordable homes and will lead to the improvement of the park’s infrastructure and the protection of the neighborhood’s open space. Today’s closing culminates a year of sustained and comprehensive effort by park residents, Co-op board members, City Councilors, City staff, and many local, state, and national non-profit organizations. The City is proud to have played a supportive role in this important effort and congratulates and thanks the many critical partners in this success, including the Cooperative Development Institute of ROC USA, and CVOEO.”
“This is a great day for the North Avenue Co-op residents and for the Burlington community,” said City Councilor Dave Hartnett. “A resident-owned park is the best outcome for our City, and I am grateful for all of the work done to preserve this diverse neighborhood in the New North End.”
In addition to primary lenders, ROC USA Capital and Vermont Housing Conservation Board provided much needed funds for engineering and environmental costs.