Broad-Park Development Corporation
Outsourcing of Property Management Services, May, 2009
Q & A
Q. Why is Broad-Park outsourcing its property management services?
A. Broad-Park’s choice to outsource its property management services is a strategic business decision that will allow us to focus all of our energy on our core mission, including the ongoing exploration of innovative approaches and creative collaborations that will keep Broad-Park a vital part of our community’s revitalization for years to come. Our mission, that of revitalizing Hartford’s Frog Hollow and South Green neighborhoods, is accomplished through the development of high-quality, affordable housing; by helping residents secure home ownership financing to realize their dreams; and by collaborating with our many community partners on projects and initiatives that make our community a better place to live and work.
Q. Who will be awarded the contract, and how was it awarded?
A. Broad-Park has contracted with Mutual Housing Association of Greater Hartford to manage and maintain the properties that it owns starting July 1, 2009. The contract is for ___ years and involves 13 properties encompassing 284 residential and commercial units. Like Broad-Park, Mutual Housing has a long track record of working hard to improve neighborhoods and provide affordable housing right here in Hartford. They are local, they are committed, and our compatible missions make them the natural choice to assume this contract. Choosing Mutual Housing was an easy decision.
Q. How will this decision impact tenants?
A. Tenants have been notified of this change, and other than sending their monthly rent payments to a different management company, or calling a different maintenance provider for repairs, there will be no changes. Importantly, while Mutual Housing will now manage and maintain our properties, Broad-Park is still ultimately responsible for the properties it owns and will closely supervise execution of the contract. We have every confidence that Mutual Housing will provide the kind of management and maintenance services our tenants expect and deserve.
Q. What role has the weakened economy and reduction in nonprofit funding played in this decision? Is Broad-Park in trouble financially?
A. Like nonprofits everywhere in this weakened economy, Broad-Park, too, faces reduced funding from traditional sources and, accordingly, must make prudent management decisions to remain strong. Grant funding from our primary source of operating funds, the national Local Initiatives Support Corporation (LISC), alone has been cut by more than half over the last five years, with further reductions anticipated next year. This reality has placed us in the position of having to make hard choices for the good of our organization and, ultimately, the continued benefit of our community. In recent years, it has become clear to us that our property management division was not giving us an adequate return on our investment. This decision will be received well by funders, and will make Broad-Park a leaner, stronger and more focused organization.
Q. How will this choice save money?
A. A reduction in the number of outside property management contracts held by Broad-Park, combined with property management and maintenance personnel expense and the overwhelming cost of regulatory compliance for owners and managers of affordable housing developments, had made the property management division a burden – as opposed to a revenue-generator – for Broad-Park. The fees Broad-Park will pay to Mutual Housing to assume this function will be more than offset by the cost savings to be realized through staff reductions and reduced compliance expense.
Q. What does the future hold for Broad-Park?
A. We believe this is a prudent, forward-thinking choice that makes us stronger. Minus the enormous cost and administrative responsibility associated with property management, we can now focus on our many exciting development projects currently in the works; assertively seek out creative collaborations and new partnerships with like-minded community interests; and work more efficiently and effectively than ever in developing the kind of creative affordable housing and neighborhood improvement projects that make our community a desirable place to live, work and raise a family.