With a requirement of adding 1,000 affordable housing units to its housing stock by 2028, Baltimore County government leaders have struck a deal with Baltimore City-based developer P. David Bramble to preserve nearly 500 below-market rate units for as long as four decades.
The agreement allows the developer to substitute a negotiated payment for annual property taxes, called a payment in lieu of taxes exemption, or PILOT, for at least 20 years, with the option to extend another 20 years. The developer also will receive a deferred loan of about $6 million, according to a news release reviewed by The Baltimore Banner ahead of a Friday news event. In exchange, Bramble’s MCB Real Estate will keep the units at reduced rates for up to 40 years, an arrangement that he and county government leaders described Friday as similar to a targeted rent cap.
The deal was negotiated with aid from Goldman Sachs Asset Management’s Urban Investment Group.
The county, bound to a federal compliance agreement that requires it to create hundreds more units of affordable housing to right decades of discriminatory housing practices, said it has reached about half its 1,000-unit goal, with another 11% added from the terms of the deal alone. The 460 preserved units represent the largest affordable housing deal in its history, County Executive Johnny Olszewski Jr. said Friday. Of those, about 110 contribute toward the county’s housing requirement.
“When we say we’re prioritizing attainable housing, we’re talking about creating opportunities for the people who are already living here, and helping keep our communities safe and strong,” Olszewski said Friday. “And this deal highlights how local governments can continue to partner with the private sector to innovate and find new ways to innovate for all of our residents.”
The units are spread across three sites: the 258-unit Springs Townhomes in Parkville, the 201-unit Beacon Pointe Apartments and Townhomes in Sparrows Point; and the 459-unit BLVD at White Springs in Nottingham, where county and state leaders and members of the development team gathered Friday to publicize the agreement.
According to online property records, MCB purchased the Parkville site in early August for nearly $72 million. Property records were not available for the other two buildings.
The city-based real estate firm, which holds the development rights at Harborplace, has a portfolio that includes mixed-use and commercial projects in Glen Burnie, Greektown and Hampden. It also has joined forces with MLR Partners’ Mark Renbaum — the owner of the Lutherville Station property north of Towson where some of the community has opposed redevelopment — on the Madison Park North development project in West Baltimore.
Bramble said the firm would extensively renovate the properties and offer the affordable units in a variety of floor plans. Of the 460 units, 350 will be offered to people earning no more than 80% of the area median income and 110 will be designated for people earning no more than 60% of the area median income, which Maryland and the U.S. Department of Housing and Urban Development define as around $76,000 for a two-person household.
Olszewski, who is running for an open seat in the U.S. House of Representatives soon to be vacated by veteran Democrat C.A. Dutch Ruppersberger, has long been vocal about his eagerness to collaborate with private sector on his “attainable” housing goals, a term he uses to describe high-quality and reduced priced units.
At the Maryland Affordable Housing Coalition’s annual meeting this past November, Olszewski told a packed room during a panel discussion that the county stood ready and able to make creative financing deals work.
“We have real dollars and real money. We are open to, and actively pursuing, TIFs [tax increment financing] and PILOTs and other ways to make sure we are giving you that bridge financing so that these housing deals work,” Olszewski said during remarks.
He also noted during the discussion the strides the county has made toward its housing needs during his tenure, which includes building up the county’s first governmental housing department; creating and funding an account solely dedicated to housing needs; and other legislation such as standardizing the process to designate properties as “vacant” and prohibiting housing discrimination by source of income.
The Baltimore County Council already has approved the loan agreement and will review the terms of the PILOT in a resolution over the coming months.
In an October memo addressed to the council from county housing director Terry Hickey, he noted that payments of principal and interest on the loan would be deferred through the 20-year term and forgiven at the maturity date so long as MCB is not in default under the loan documents. The county’s American Rescue Plan Act fund would cover the loan, Hickey wrote in the memo, which The Banner reviewed on Friday.
The loan would help cover the firm’s renovations to the properties, which would total about $20 million at the three sites, the memo added. It includes balcony repairs, roof replacements, interior renovations and new appliances.
The payment in lieu of taxes agreement, meanwhile, would be established for each property at 25% of the current property tax rate, with the rate rising gradually over the course of the agreement. The agreement would need to be approved by County Council.
At the Nottingham apartment complex Friday, Hickey said the payment in lieu of taxes agreements tend to be more popular with private sector partners due to their long-term nature, as opposed to a direct cash payment which often has minimal, shorter-term value. He said the county has recognized over the course of the coronavirus pandemic that the “best” affordable housing sites are those “naturally occurring” in communities, or already existing at reduced prices.
“The problem is, NOAH [naturally occurring affordable housing] properties are really vulnerable to out-of-town investors who can come in, buy them quickly, and raise rents dramatically. That can lead to mass displacement, evictions of hardworking families and children,” Hickey said during remarks.
The county may not have an unblemished history when it comes to housing, Hickey said. But he and Olszewski pledged that more progress above and beyond the housing requirement would follow.
“I’m about getting deals done. And we were able to get it done,” Olszewski said. “It’s my hope that this sends a signal to a broader market that more market-rate developers now come to the table.”
This article has been updated to correct the title of Lutherville Station's owner.