Controlling Outside Investors In A Housing Development Program : Case Study
Posted Date:
- February 6, 2012
In early 1970, Tri-City Citizens Economic Union #I (Citizens Economic Union) decided to relinquish its ownership of Amity Village I and rehab sponsorship of Amity Village 2, its two housing projects, in order to concentrate on community development and neighborhood services programs, Recently passed federal legislation provided investors with tax shelters as incentives to invest in rehab and construction projects in the inner city .
Tri-City Citizens Economic Union spent over five months negotiating a sales contract with North American Development Corp. of Boston, Mass. The contract featured clauses that would not only protect the residents, but also minimize neighborhood disinvestment.
In the December 16, 1970 sales contract, Tri-City Citizens Economic Union included contract clauses which it felt would protect the Amity Village properties and the residents of the Amity Village properties. Because the private investment corporation is interested primarily in the tax shelter benefits it will receive, the company has little concern for the eventual ownership of the property, the management of the property, and community development in general.
