A Wentworth County judge has granted a preliminary injunction barring Millrace Development Partners from signing new market-rate leases at the Foundry District Lofts until the company submits a court-approved plan to deliver the affordable units it promised the city, handing a significant early win to the Lowertown tenants suing over the shortfall.
A Wentworth County Superior Court judge has granted a preliminary injunction barring Millrace Development Partners from signing new market-rate leases at the Foundry District Lofts, ruling at a hearing held earlier this week that the Lowertown tenants suing over the project’s affordable-housing shortfall were likely to succeed on the merits of their underlying claim and would suffer irreparable harm if leasing continued unchecked.
In a written ruling, Judge Herbert Solano found that Millrace’s 2021 redevelopment agreement with the city required income-restricted units to be delivered proportionally as the project leased up, not solely by the end of the full build-out as the company had argued. The order takes effect immediately and will remain in place until Millrace submits, and the court approves, a revised compliance plan for the 38 income-restricted units the agreement requires.
A win tenants call overdue
Denise Okonkwo-Marsh, lead organizer of the Lowertown Tenant Alliance and a named plaintiff in the case, called the ruling vindication for tenants who had been told for months that the affordable units were coming eventually. “The judge just confirmed what we’d been saying all along: a promise on a timeline is still a promise, and you don’t get to leave it for last,” Okonkwo-Marsh said.
This ruling doesn’t just help the six of us who sued. It tells every developer in Foundry Row that phasing a project doesn’t mean phasing out your obligations.
Reyna Ostrowski, plaintiff and Lowertown resident
Reyna Ostrowski, another named plaintiff who said she was told the affordable-unit program had been “restructured” when she tried to apply for a unit, said the ruling gave her hope she might still qualify once Millrace revises its plan. “I’ve been waiting to hear whether this was ever going to be real,” Ostrowski said. “Today it started to feel real again.”
Millrace says it will comply, weighs appeal
Aaron Kessler, a spokesman for Millrace Development Partners, said the company was disappointed in the ruling but would comply while it evaluates whether to appeal. “We continue to believe our phased approach was consistent with the agreement’s intent, but we respect the court’s process and will submit a compliance plan as ordered,” Kessler said. He declined to say how many additional units the company expects to convert to income-restricted status or on what timeline.
The injunction freezes leasing on the roughly 40 remaining unleased units in the project’s first phase, according to figures Millrace has previously disclosed, though it does not affect existing tenants’ leases. Kessler said the company does not expect the freeze to affect construction timelines for the still-unbuilt second phase.
City Council Member Aisha Muhammad, who chairs the council’s housing committee, said the ruling reinforces the case for stricter, enforceable per-phase benchmarks in future redevelopment agreements, an approach the city has already begun applying to newer deals along the transit corridor. “I’d rather write agreements clearly enough the first time that we never need a judge to referee them,” Muhammad said. “But when we don’t, I’m glad the courts are willing to hold the line.”
Council Member Terrence Boudreaux, who represents Lowertown, said he intends to cite the ruling as he pushes the council toward creating a standing enforcement mechanism for affordable-housing agreements, rather than relying on tenants to sue each time a developer falls short. “This win came from six people with a lawyer and a lot of patience,” Boudreaux said. “The next one shouldn’t have to.”
The underlying breach-of-contract lawsuit remains pending, with no trial date yet set. Okonkwo-Marsh said the tenant alliance is continuing to field calls from additional Lowertown households describing similar experiences at other Foundry Row developments, and that the group is reviewing whether any of those complaints warrant separate legal action. Kessler said Millrace has not been contacted about additional claims beyond the current lawsuit.
Solano’s order requires Millrace to submit its revised compliance plan to the court within 30 days. A hearing to review the plan’s adequacy has been scheduled for early next quarter.
Roughly two dozen tenant alliance supporters who attended the hearing applauded briefly when the ruling was read into the record, according to two people present, though Solano cautioned from the bench that the injunction resolves only the immediate leasing question and not the underlying breach-of-contract dispute. Okonkwo-Marsh said the group does not plan to declare full victory until Millrace’s compliance plan is actually filed and approved. “A ruling on paper still has to turn into apartments people can move into,” she said.
The city attorney’s office said its own separate review of whether Millrace’s phase-one numbers violated the redevelopment agreement remains ongoing and is not affected by the court’s ruling. Muhammad said she expects that review to conclude around the same time Millrace’s compliance plan is due, giving the council and the court parallel assessments of the same underlying facts.