PROVINCETOWN — The Provincetown Housing Authority has purchased three affordable one-bedroom condominium units at the Grace Gouveia building after a two-year dispute between the Community Development Partnership (CDP) and developer New Ventures/26 Alden Street LLC caused an earlier plan to acquire the units to fall apart.

“The negotiations for the three affordable units between the Provincetown Housing Authority (PHA) and 26 Alden LLC have been resolved,” Town Manager David Panagore wrote in a Dec. 14 letter to the selectmen. ”[New Ventures] and PHA have agreed that in return for a $10,000 payment per unit, [it] will convey the three affordable units in the Grace Gouveia building to the Provincetown Housing Authority, which will continue to rent them to eligible households.”

In the original agreement, Panagore said, the units were to be rented through the CDP, but the CDP is no longer part of the deal.

In August, the CDP abandoned its plan to purchase and manage the three affordable units leaving New Boston Ventures and 26 Alden Street LLC holding the title and managing the property.

According to CDP attorney Bonnie-Jean Nunheimer of LaTanzi Spaulding & Landreth in Orleans, the reason they ditched the project was potential problems with the unit’s financial viability and what she called “defective deeds.” In addition, Cape Cod Five Cents Savings Bank said it wasn’t willing to make loans on the property until the title issues were cleared up.

Furthermore, the CDP Board of Directors refused to purchase the units unless the title was clear. To do that, there would need to be a “quiet title” court action to dispose of any challenges or claims and clear the title. But Jay Coburn, the CDP’s executive director, told the Banner in August that the seller wouldn’t go along with that plan and that the units would not be able to absorb the costs if there were problems.

Coburn added that it was not unusual to have title problems on Provincetown properties due to a Town Hall fire on Feb. 16, 1877 that destroyed many deeds. He also said that, since the nonprofit CDP uses public money, it needs to act prudently.

“I’m happy to support this now,” Selectman Erik Yingling said at a Dec. 15 roundtable meeting. “I don’t think it honors our original agreement, but I’m willing to give support. It’s a lesson learned. The language needs to be crystal clear. This is a bit unfaithful, but we need to move forward with the units and move on.”

And Selectman Tom Donegan agreed.

“This is a bitter pill,” he said. “If you watch the original presentation you see the outline of the deal. Let’s learn our lesson and make sure this doesn’t happen in the future.”

Provincetown Housing Specialist Michelle Jarusiewicz became aware of the falling out between CDP and the developers and turned to the housing authority, which oversees 46 units in Provincetown.

The housing authority purchased the three Alden Street units on Dec. 30 for $30,000 ($10,000 per unit) and is now assuming control over the rental and use of the units. The housing authority has also granted the town an affordable housing restriction to ensure that the units will be protected in perpetuity.

“The terms of this restriction will primarily come into play if the Regulatory Agreement that currently encumbers the property is terminated for any reason (typically if the owner has been in default),” wrote Panagore, adding that the restriction will ensure that, in such an event, the owner of the units will continue to be required to rent the units to eligible parties.

In addition to the restrictions, PHA also asked to tweak the eligibility and pricing from 80 percent to 65 percent of annual median income. Jarusiewicz said by email that the current rent for the units is around $900 each.

“Congratulations to the housing authority and thank you for all your work. It’s exciting and it’s a cool opportunity and a big step,” Selectman Cheryl Andrews said during the roundtable meeting.

In spite of this enthusiasm, Andrews didn’t support the decision. The board approved the motion 4-1, with Andrews in opposition, saying that even though she was supportive of the housing authority’s intentions it was not the selectmen’s original agreement.

Housing Authority buys Alden Street units