The Department of Housing and Community Development withdrew a $600,000 Affordable Housing loan committed to a “wellness center” promoted by former Mayor Sheila Dixon after The Brew questioned whether the funds were being properly used.
The loan to Bethel Outreach Center, Inc. – drawn from the Affordable Housing Program approved by voters in 2018 to underwrite housing for low-income families – was set to be approved this morning by the Board of Estimates.
But it was withdrawn yesterday by HCD after this website asked how making the building – owned by Bethel A.M.E., Dixon’s church – ADA compliant and installing a front atrium with a skylight fit into the program’s requirements.
Out of 20 projects now in the pipeline for Affordable Housing money, only the Bethel center has no housing component, according to data provided by HCD.
“It is unclear if these funds can be used for the project if it is not direct construction of affordable housing,” HCD spokesperson Tammy Hawley acknowledged.
A member of the Planning Commission recently asked the same question – can affordable housing money be funneled to a non-housing project, no matter how worthy?
When HCD could not explain the loan’s eligibility under the program, the Planning Commission took the unusual step of tabling the loan until its next meeting in December.
Nevertheless, the item showed up this week on the BOE agenda without the seal of approval by the city law department.
“This appears to break from the usual practice of seeking and obtaining law department review and approval before an item is placed on the BOE agenda,” Acting City Solicitor Dana Moore told The Brew.
Out the Door Quickly
HCD had asked the spending board to authorize Acting Housing Commissioner Alice Kennedy to “execute all legal documents to effectuate the transaction.”
The unusual procedures appeared aimed at getting the loan expedited before Mayor Bernard C. “Jack” Young leaves office, and Brandon Scott is sworn in as Baltimore’s next mayor on December 8.
Scott narrowly defeated Dixon in the Democratic Party primary in June, ending her second bid to return to the office she was forced to abandon in 2010 after she was found guilty of stealing gift cards intended for the poor.
Today the Board of Estimates deferred action on the loan until its December 2 meeting, the last under Young’s control.
Dixon: Pugh approved the loan
In an interview, Dixon said she has long dreamed of reestablishing the vacant building as a wellness center that offers educational tools and referral services for struggling Westside residents.
In 2017, she said she secured a funding commitment from former mayor Catherine Pugh.
“I was co-chair when I went to talk to the mayor at the time [Pugh] about helping to provide resources for our center. She said if they had the money, it was a yes,” Dixon said.
Dixon and wellness center co-chair, Larry Rosenberg, a private developer, pursued the project with then-Housing Commissioner Michael Braverman and other top officials after getting Pugh’s go-ahead.
At the same time, Rosenberg and Louis “Buddy” Sapolsky, a paid consultant for Bethel, were drumming up support from the state legislature, according to a bond bill fact sheet.
Dixon today expressed surprise that the loan was coming from a bond program set up to finance affordable housing.
“I wasn’t aware of that until you told me,” she said. “You need to ask them [HCD] why they picked that pot of money for the loan.”
She said she stepped down as co-chair a year ago because “I didn’t want my position to become a conflict of interest when I announced my campaign for mayor.”
She remains on the board as a non-voting member.
The 20,000-square-foot building at McCulloh and Mosher streets was purchased by Bethel Church for $94,000 in 1989.
For many years, it was used for after-school programs and as a homeless shelter. In 2005, for example, the center received nearly $200,000 in grants for program services, according to its federal 990 tax return.
The building, however, suffered from significant deferred maintenance, and “deterioration forced its closure in 2010,” said the housing department.
A member of the Bethel congregation, Dixon spearheaded efforts to rehab the building, assembling an impressive array of influencers for a nonprofit that reported just $6,549 in revenues in 2018.
On the wellness board were Councilman Eric Costello, Circuit Court Judge Cynthia H. Jones, former Deputy Housing Commissioner Jacquelyn Cornish, contractor Ken Banks, Rabbi Steven Fink, Cordish Company executive Zed Smith, scrap metal mogul Sandy Shapiro, and now-retired police commander Melvin Russell.
(Costello said he resigned from the board last month. Saying he “wholeheartedly supports” the group’s mission, he stressed that he has no financial interest in the property or center and has never been compensated as a board member.)
State delegate and incoming Baltimore City Council President Nick Mosby has also served on the board, while Comptroller Joan Pratt’s accounting firm has handled the center’s tax records.
According to the latest 990 tax form, the wellness board is chaired by Rev. Patrick Clayborn, senior pastor at Bethel A.M.E., who has faced questions about the church’s use of vacant lots cleared by the city and sold to the church for $1 each.
(Dixon said the tax form is incorrect, and Clayborn serves as an ex-officio member like herself.)
Other AHP Projects
A review of the Affordable Housing Program (AHP) shows that the wellness center is the fourth project slated to be funded from the original $6 million bond issue.
The other three projects are supposed to create 157 units of affordable housing. They have been allotted a total of $2.8 million.
Other future projects, tapping into $12 million of additional bond money approved by voters this month, could help supply as many as 900 new or rehabbed units for low-income families.
“Out of despair can come something good, a power for making dreams realities,” the center says of its mission.
While the Bethel center is the only AHP project not providing housing, HCD still believes it qualifies for funds under the program, according to spokeswoman Hawley.
“The project represents an appropriate renovation of a vacant property, provides health and other supportive service benefits in a disinvested neighborhood and is being conducted in conjunction with a number of other projects, including significant investment in nearby affordable housing, residents of which will benefit from the facility,” she wrote.
The zero-interest loan to the Bethel center (eventually to be converted to an outright grant) will match $275,000 in state bond money procured by former Maryland Senator Shirley Nathan-Pulliam, said project manager Jules Dunham Howie.
The center has also benefited from state Community Legacy grants and over $700,000 pledged by private foundations and faith-based institutions, according to Howie.
No Direct Services
Expected to open in summer 2021, the center will not offer direct services to West Baltimore residents, according to its state bond bill application.
Instead, “we will provide services under the broad umbrella of wellness” as a referral hub.
The document explains, “Through cooperation and coordination, it [the center] will convene the community and galvanize, bringing in services and activities, publicizing them and making referrals.”
This means providing meeting space “for community conversations and, when appropriate, other facilitation and brokering supports.” The center also hopes to rent out space to different groups, such as the University of Maryland School of Social Work, and to open a teaching kitchen.
Summarizing the group’s various plans to utilize the 20,000 square feet, the application says:
“The board of directors is determined to see this building again be a focal point for the community, showing that out of despair can come something good, a power for making dreams realities, particularly in light of the Freddie Gray tragedy that has played out in the impoverished neighborhood.”
“We’ve all been in this fight for the community for a long time,” Dixon remarked today.
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