Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Affordable Housing topic
No spam. Unsubscribe anytime.
Board of Estimates approves 20-year tax pilot to preserve 204 affordable units in West Baltimore
Summary
The Board of Estimates voted to approve a 20-year payment-in-lieu-of-taxes (PILOT) for the Westview project, a transaction city finance staff say is necessary to preserve 204 apartments for households at 50% of area median income (AMI) or below.
The Baltimore City Board of Estimates on Jan. 8 approved a 20-year payment-in-lieu-of-taxes (PILOT) agreement for the Westview project, a multi-building acquisition and renovation in West Baltimore that officials said will preserve 204 apartments for households at or below 50% of AMI.
City finance staff said the pilot is needed to make the redevelopment financially feasible for the developer and to ensure the units remain available to low-income families.
Bob Senamy, Deputy Finance Director, described the project’s financial assumptions and the effect of the proposed pilot: “if the, project was paying full taxes after the renovation, assuming that the assessment was going to grow and their taxes would grow, they would be paying, about 276,000 in taxes in the 1st year, and then by year 15 of the project, the taxes would grow to nearly $1,000,000. With the pilot, the pilot payment would be about the same in year 1. It would be 276,000, but it would only grow to 383,000 by year 15 of the project.”
Senamy and DHCD staff explained lenders require sufficient debt-service coverage to underwrite acquisition and rehabilitation loans; the board heard an analysis showing the developer’s debt-service coverage would remain above 1.0 under the pilot and fall below 1.0 under full taxes. Finance staff said the developer’s requested pilot payment was estimated at roughly $311,580 per year on average over a 20-year term.
Members of the Board asked about alternative approaches and about long-term city practices. The Comptroller urged the board to examine inspection and code-enforcement practices, saying, “HCD has not had a great track record when it comes to, regular inspection and code enforcement for multifamily.” The mayor and other members said preserving affordable units is a priority while also calling for stronger inspection and long-term strategies to avoid repeated subsidies for properties that have fallen into disrepair.
After discussion, a motion to approve the PILOT for the Westview project was made and approved by voice vote.
The approval authorizes the Finance Department to execute the PILOT arrangement for Hudson Valley Property Group/West Baltimore Preservation LP to support renovation and preservation of the named West Baltimore properties. The board record shows the item was moved, seconded, and approved without a recorded roll-call tally in the transcript.
