After 15 years, minor progress in development
Neighborhood overhaul in West Baltimore delayed
About 15 years after a massive project launched to revitalize a significant part of West Baltimore with thousands of apartments plus commercial space, city officials have recently issued occupancy permits — but for just 39 apartments.
The $800 million Center\West project was supposed to overhaul much of Poppleton, a hardscrabble but promising part of town where the high-tech University of Maryland BioPark has been expanding. But it has suffered setbacks that could leave taxpayers liable for tens of millions of dollars in publicly backed financing.
The New York developer La Cité cut the ribbon on the first two of 30 proposed buildings, but that was a year ago, and the modern gray and glass building didn’t open.
They suffered extensive water damage that needed repairs, according to documents related to the project’s public financing. In the most recent disclosure, La Cité blamed the main contractor, Kinsley Construction. According to court records, Kinsley has filed a lien on the property, which typically means the contractor is owed payment.
For now, those at city and federal OVERHAUL ,
agencies involved in financing the project preferred to focus on what progress has been made.
“The city does see this as an important project to help generate a vibrant, mixedincome community in an area of the city that has long suffered from disinvestment and blight,” said Tammy Hawley, a spokeswoman for the city’s Department of Housing & Community Development, which helped finance infrastructure.
“We view the project as in the hands of a capable developer with sufficient resources to continue the project,” she said.
Center\West apartments bills itself as “luxury” apartment living, according to its website, and the developer has said it was aiming to take advantage of its proximity to the biopark and other University of Maryland professional schools. The city required it to reserve 20% of the units for lowincome residents.
The project was given two occupancy permits recently for seven units on the first floor and 32 on the fourth floor of 101 N. Schroeder St., according to city records. There are 262 apartments in two buildings on Schroeder. Some retail space, the lobby, gym and other first-floor spaces were also permitted. Eventually, more than 2,800 apartment units are planned.
The city sold about $10 million in bonds to pay for infrastructure within the property’s boundaries, which lie west of Martin Luther King Boulevard from downtown. The bonds were part of a $58 million tax increment financing deal for the overall project.
Under such TIF deals, increased property taxes are diverted from city coffers to cover the bond payments. La Cité successfully had an increase in the project’s real estate assessment reversed months ago because the buildings had not opened. Nonetheless, housing officials reported that the city had to begin repaying the bonds in 2017.
Hawley said 80% of the properties in the area were vacant and abandoned before the project began, and the project would “greatly increase with the development.”
The financial picture remains unclear for now.
The developer reported in the bond documents that it failed to recover insurance money and relied on a fee from a federal low-income housing tax credit it received and other available funds to make repairs. The first phase of the project is now “99.00% complete,” the developer reported.
The bond documents show that this money and other funds were also used for, among other expenses, paying debt service on a $56.1 million loan from KeyBank used to finance construction.
That loan was the city’s second-largest ever backed by the U.S. Federal Housing Authority, part of the Department of Housing and Urban Development. That makes taxpayers liable for most of the loan amount if the developer were to default.
In an email, Nika Edwards, a spokeswoman for HUD, said, “The loan is current.” She added, “We are working with all parties to ensure the property becomes ready for occupancy.”
La Cité reported in the bond documents that it is making progress.
“Over the past three months, La Cité oversaw the complete repair of all 262 water-damaged units caused by Kinsley Construction. La Cité also secured a partial occupancy permit on September 25th for 6 of 176 units in 101 N. Schroeder,” the bond documents say. A second permit was issued in November, and another permit for 33 more units is pending.
A representative for Kinsley had no comment when reached by phone, and a company lawyer also emailed that he had no comment.
Officials with La Cité also did not respond to requests for comment, nor did those with KeyBank.
Area resident and activist Sonia Eaddy said the community, city and developer still have the opportunity to make a lot of progress. She took a tour recently, “and I love what I saw inside,” she said.
She now wants to turn attention to using some of the land within the project boundaries to build housing for those already displaced, as well as other homeowners like herself who are slated to be displaced for future development. Others will be moved from neighboring Poe Homes public housing units for an overhaul.
“We’d like to bring back every tenant or homeowner by using some of the land,” Eaddy said.
“We’ve not sat down to talk yet,” she said. “But if this is for the community and we’re homeowners here now, we’d like to bring back homeownership. Homeowners are looking for apartments to rent.”