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Remaining $1M debt owed by the New England Farm Workers' Council to come from real estate sales

The New England Farm Workers' Council office on Main St. in Springfield, Mass.
Elizabeth Román
The New England Farm Workers' Council office on Main St. in Springfield, Mass.

The New England Farm Workers' Council (NEFWC) owes the government about $1 million. The social services organization was founded more than 50 years ago — and was led for decades by Springfield civic leader Heriberto Flores. The council administered Hampden County's heating assistance program until a few years ago. Auditors found the organization misused about $1.9 million — and has paid back about half of that amount. That's according to Jim Kinney of the Springfield Republican newspaper who spoke with NEPM’s Carrie Healy. Kinney's reporting tells the story of a rapid operational downshift at the New England Farm Workers' Council.

Jim Kinney, The Republican: Well, now they're basically down to the core function of working with migrant farm workers, which was what they did in the beginning. And now they're down to a very small core of people doing that under a federal grant. But at one point, it was a much larger 300-person organization that did all sorts of things.

They no longer have a lot of the programs that they used to offer. If you go past their offices on Main Street, it's pretty evident there are signs in the window telling people who are looking for youth pre-employment training or high school equivalency programs to go elsewhere, and there's references to other places one can go. The Latino Economic Development Corporation is operating from space in a Farm Worker building.

The Farm Workers also invested heavily in commercial real estate and housing real estate in Springfield, Holyoke and elsewhere.

Carrie Healy, NEPM:  So, a couple of years back, when the Farm Workers Council was administering the Hampden County LIHEAP program (meaning they were the organization where eligible households would turn to get help for paying for their winter heating) the nonprofit mixed nearly $2 million of state funds, the LIHEAP money, with their own operational funds. What happened there?

That's what the auditor's report said, and that's what the current NEFWC president confirmed for me on the phone.

The money was co-mingled and was used to prop up the organization because they had bills to pay, mostly from underperforming real estate investments. And that meant that when September 2022 rolled around and it was time to close out the contract with the state and federal government for LIHEAP, they couldn't close out the account because there was $1.8 million in money that needed to be repaid… and they couldn't.

We should say that LIHEAP fuel assistance is now administered by the Valley Opportunity Council. The Farm Workers group has to pay the money back, so how is that going? What are they doing, selling off properties to pay back the state?

Yes. The debt was $1.8 million and change. The NEFWC executive director told me that they've paid about half of it. The state confirmed that (the state's collecting the money on behalf of the federal government) the money needs to go back to the feds.

There's about $1 million outstanding, and they've been paying it by selling real estate, including a building in Bridgeport and stuff in Holyoke and here in Springfield, including one on Hampden Street.

There have been a lot of investments made in some of this infrastructure that you're describing over the years, from both the state and federal funds. What happens when these properties are sold?

Well, right now, with the mortgage in place, the state is in position as a creditor, and they will be paid when the properties are sold. Like, if you have a mortgage on your house and you sell it, you have to pay off that mortgage with the proceeds. That's what the documents’ purpose was, to guarantee that as the Farm Workers sell off the property, that the state will get the money.

It's a tough time of year to do this, isn't it? There’s sort of rule of thumb that interest rates have profound impacts on the value of income producing real estate. Is this... going well for them? Are they on track to amass the money on some schedule?

It's going slower than expected because of the interest rate issue and its effect on interest rates. But I was told that one property they have people looking at it this week.

The major frustrating thing, especially for me, is that the redevelopment of the Paramount(and Massasoit Hotel) is stalled. And I keep being told that eventually there'll be a deal to get that property repaired and reopened. It's very frustrating to all of us who live and work in downtown Springfield, because it's a beautiful old building that's sitting there decaying.

I’m remembering back to the many rock concerts I attended in the 90s at the Paramount. It is a mighty real estate portfolio that they hold, and that includes that theater with historic origins, as well as down the street, the Student Prince and the Fort. What's the status there?

There is another plan in place to redevelop that building, probably involving Peter Picknelly, who's part of the investment group that saved the Fort, the restaurant. And the ultimate goal will be some sort of housing on the upper floors, which haven't been touched…in forever.

And we should note the Farm Workers' Council has previously supported some NEPM internships.

Carrie Healy hosts the local broadcast of "Morning Edition" at NEPM. She also hosts the station’s weekly government and politics segment “Beacon Hill In 5” for broadcast radio and podcast syndication.
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