The fight over affordable units at the Foundry District Lofts moves into a courtroom this week, as a judge weighs whether to freeze new leasing at the 214-unit Foundry Row development while the underlying lawsuit plays out.
A Wentworth County Superior Court judge is scheduled to hear arguments this week on a request to block Millrace Development Partners from leasing additional market-rate units at the Foundry District Lofts until the company produces a revised plan for delivering the affordable units it promised the city.
The request for a preliminary injunction stems from a lawsuit filed six weeks ago by six Lowertown residents and the tenant-advocacy group Lowertown Tenant Alliance, which alleges Millrace agreed in its redevelopment agreement with the city to set aside 38 of the project’s 214 units, or 18 percent, as income-restricted, but has leased fewer than a dozen at qualifying rents since the first phase opened.
Both sides prepare for their first real test
Judge Herbert Solano, who is presiding over the case, will hear from attorneys for both the tenant alliance and Millrace before ruling on whether continued market-rate leasing would cause irreparable harm to the plaintiffs while the underlying breach-of-contract claims are litigated, a standard that typically takes weeks rather than months to satisfy in Wentworth County courts.
Denise Okonkwo-Marsh, the tenant alliance’s lead organizer and a named plaintiff, said the group’s attorneys will argue that every additional market-rate lease signed while the affordable units remain undelivered makes it functionally harder to ever bring the building into compliance, since fewer units remain available to convert. “Every week that passes without an injunction, this building fills up further with people paying market rate in units that were supposed to go to people like us,” Okonkwo-Marsh said.
Our position has always been that phase one was never meant to deliver the full affordable-unit count on its own. An injunction based on a phase-one snapshot would punish us for a compliance timeline we never agreed to abandon.
Aaron Kessler, spokesman for Millrace Development Partners
Aaron Kessler, a spokesman for Millrace Development Partners, said the company will argue against the injunction on the grounds that its redevelopment agreement allows phased delivery of affordable units across the project’s full build-out, including a still-unbuilt second phase, and that halting leasing now would cause the company financial harm disproportionate to any delay in affordable-unit delivery. He said Millrace remains prepared to demonstrate its overall compliance plan to the court.
City housing office watching closely
City Council Member Aisha Muhammad, who chairs the council’s housing committee and has said her office flagged the shortfall to Millrace twice before the lawsuit was filed, said the city attorney’s office continues its own separate review of whether the phase-one numbers violated the redevelopment agreement independent of the tenants’ claims. She said the outcome of the injunction hearing would likely shape how the city approaches enforcement language in future redevelopment deals along the Foundry Row corridor.
“However this hearing goes, it’s already told us we need enforceable per-phase benchmarks in these agreements, not end-of-project targets that let a developer coast for years,” Muhammad said. She noted the city’s transit corridor housing rules, approved last year with a 15 percent income-restricted-unit requirement for new development near transit stops, already incorporate stricter phase-by-phase compliance language than the Foundry District Lofts agreement did.
Council Member Terrence Boudreaux, who represents Lowertown, said he plans to attend the hearing and intends to raise the case at an upcoming council committee meeting regardless of the outcome, arguing the city needs a standing enforcement mechanism for affordable-housing agreements rather than relying on tenants to sue. “This shouldn’t hinge on six people having the resources and the will to hire a lawyer,” Boudreaux said.
Kessler said Millrace has not altered its published timeline for delivering the remaining affordable units and disputed suggestions that the company would delay the project’s second phase regardless of the hearing’s outcome. Okonkwo-Marsh said the tenant alliance has continued to hear from additional Lowertown households describing similar experiences applying for income-restricted units elsewhere in Foundry Row, and that several may join the litigation depending on the injunction ruling.
Judge Solano is expected to rule on the injunction request within two weeks of the hearing, according to court filings. A trial date on the underlying breach-of-contract claims has not yet been set.
Legal observers said the case is being watched closely by housing advocates in neighboring cities that have adopted similar phased affordable-housing requirements for redevelopment projects. Muhammad said her office has already fielded inquiries from two out-of-town council staffers asking how Bellwater’s enforcement language compares to their own cities’ agreements. “Whatever happens here is going to end up as a reference point for other places writing these deals,” she said.
Okonkwo-Marsh said roughly two dozen supporters from the tenant alliance and allied groups plan to attend the hearing, which will be open to the public. “We want the judge to see this isn’t six abstract names on a filing,” she said. “These are people who live two blocks from a building that was supposed to include them.”