IHT eyes Hanover House Inn for workforce housing

Permit pending, the inn will likely be converted to hospital employee housing.

The Hanover House Inn in Vineyard Haven could soon be home to workforce apartments. - Gabrielle Mannino

Updated May 14

Looking to accelerate the creation of affordable housing on Martha’s Vineyard, the Island Housing Trust (IHT) will purchase the Hanover House Inn in Tisbury, pending a change of use permit from the Tisbury zoning board of appeals (ZBA).

On Thursday, IHT staff, Martha’s Vineyard Hospital CEO Denise Schepici and affordable housing advocates went before the Tisbury ZBA at a specially scheduled public hearing at the Tisbury Fire Station meeting room, seeking a change of use permit from transient residence to permanent residence.

IHT executive director Philippe Jordi told the board there is a contract in place with Hanover House Inn owner Steve Perlman, pending ZBA approval. He also informed the board that Schepici has signed a letter of intent to sign a master lease with IHT to create much-needed employee housing.

“We like to innovate, and finding partners helps our business plan,” Jordi said. “We’re partnering with another nonprofit. We see it as a win-win.”

Jordi said the same model could be followed with the school district to create much-needed teacher housing.

The plan is to convert the 4,300-square-foot main building into 14 bedrooms with private bathrooms. There will be a shared kitchen, and the existing dining room will be a shared dining space. Laundry, refrigeration, and storage will be in the basement.

The 1,300-square-foot secondary building will be converted into two one-bedroom apartments, making a total of 16 workforce apartments.

Jordi said renovation work would be relatively minor — removal of one kitchen wall, and adding energy-efficient heat pumps and insulation provided by Cape Cod Compact. He said the new 17-bedroom septic system would more than handle the nitrogen load.

“As the Vineyard housing crisis worsens, I think more and more people will look at models like this,” Jim Feiner, a broker of the transaction and chairman of the Chilmark housing committee, said. “It doesn’t create more density, but does help to alleviate part of our problem. Nobody wants to see more houses put up randomly, nobody wants dormitories; this is a pretty good solution.”

“This is an experiment we’d love to try,” Schepici said. “My goal at the hospital is to have more stability. Housing is unpredictable and unsustainable. People coming and going drives up cost of care, and takes resources from all of us.”

Schepici said the housing could fill the growing affordability gap for people on the lower end of the pay scale, such as nurses and maintenance workers.

Overall, the idea was well received by the board.

“I think this partnership is brilliant,” John Guadagno said. “I see it as a pretty nice fit for the hospital. I’m a little hesitant to give blanket approval, but I applaud you for thinking outside the box.”

ZBA chairman Jeff Kristal agreed, but expressed concern over the financial hit to the town.

“We lose occupancy tax for 2,000 room nights. That’s a big cut in the revenue for the town,” he said. “How do we equal that out? We can’t let the taxpayer shoulder the burden.”

Board member Michael Ciancio objected, saying the financial aspects of the deal are not under ZBA purview.

“I’m making it part of it because I’m the chairman,” Kristal said.

Kristal said with the new tax on Airbnb-type rentals, the town would probably make up the loss of room tax, but somehow the town should be compensated for the $12,000 yearly property tax, possibly with an annual donation from the hospital.

“I know what the hospital pays for housing, and I know this will help tremendously,” he said. “But we have to be fair to the taxpayers.”

Kristal said that nontaxable properties such as elderly housing and other IHT developments are the most frequent source of calls to fire and police, which cost the town money. “That’s why I’m harping on this,” he said.

The ZBA will continue the public hearing at its regular meeting on May 10 at 5 pm.


Chronic housing failure
In 2013, MVH had an agreement in place to purchase the Thorncroft Inn on Upper Main Street in Tisbury.

The agreed-upon price for the inn, which included furniture, was $2,350,000. The deal fell through when time ran out on an agreement contingent on town approval of a special permit that would allow a change in the existing nonconforming use as an inn to “accommodations for visiting medical professionals.”
At that time, former CEO Tim Walsh said the hospital was spending about $850,000 per year on housing.

In 2016, MVH purchased the Admiral Benbow Inn, a seven-room bed and breakfast on New York Avenue in Oak Bluffs, for $1.375 million. The Victorian-style inn is for employee housing and administrative offices.

At that point, Walsh said the hospital was spending approximately $1.4 million on housing.

In 2017, MVH spent a little over $2 million on employee rental housing. The sharp rise was due to additional staff needed for a software overhaul; that total should decrease this year, according to hospital officials.

Updated to correct Feiner’s role in the transaction. The listing agent is Cronig’s Real Estate and Jerry Gerolamo is the broker for the seller. – Ed.