A long-delayed project to redevelop West Baltimore’s blighted Poppleton neighborhood was beset by another delay after a city panel failed to approve a recommendation for $12.25 million in TIF tax bonds to the developer.
The Board of Finance was set yesterday to approve the bond legislation – the first step in a lengthy process that requires City Council and Board of Estimates approval – when member Larry Silverstein voted against the plan.
His vote, combined with an abstention from Joan Pratt, the City Comptroller, meant that the panel could not muster the three votes needed to approve the measure for La Cite and Diversified Realty Advisors.
A real estate developer based in Fells Point, Silverstein delivered his vote via a conference call. He did not return a phone message and email today asking why he voted against the TIF legislation, which would be used as a subsidy to make infrastructure improvements for the project.
Stephen Kraus, the board’s clerk, put the TIF proposal “on hold” and announced today that the board will hold a special meeting with all five board members to address the TIF proposal. (Frederick Meier was absent from Monday’s meeting, leaving Dana C. Moulden and Finance Director Henry Raymond as the only “yes” votes.)
During yesterday’s meeting, the panel heard a series of skeptical questions about the viability of the project to redevelop the mostly-vacant Poppleton district along West Lexington and North Schroeder streets.
The concerns came from Walter Horton, chief of Comptroller Pratt’s real estate office. Horton said he was “fearful” that the project – projected to span over 15-20 years and cost an estimated $460 million – is not practical.
He asked if the city would be “on the hook” for bond payments if the project failed. Keenan Rice, a city consultant, said La Cite would be responsible for paying interest on the bonds.
La Cite, a New York developer, won rights in 2005 to redevelop nearly 14 acres of Poppleton, but the project was stalled by the recession and then by bickering between the developer and the Housing Department, which was responsible for acquiring and razing several blocks of run-down property.
In 2012, La Cite sued the city for trying to terminate its 2005 agreement, and the two groups (somewhat reluctantly) began working together.
Phase 1 of the project will consist of two mid-rise buildings along Schroeder Street to include 257 rental units, 205 of them market-rate and 52 affordable. The developer has received a commitment of $45 million in state low-income housing tax credits and bond financing and says it will contribute $15 million in equity.
To bridge the funding gap, the Rawlings-Blake administration is proposing the $12.25 million in TIF bond proceeds for Phase 1.
La Cite’s TIF application seeks a total of $58.6 million in bond funding over four construction phases.