Developers brief council on downtown projects; Brew River owner says city breached 1999 parking deed

At a May 19 work session the Salisbury City Council heard updates from three downtown developers and sustained multiple public comments raising concerns about parking, affordable housing and the pace of city actions.

Justin Schaub, representing Brew River Land, told the council the Marina Landing project — and specifically a parking‑lot agreement for Lot 1AA — breaches a 1999 deed and agreement between developer Frank Hanna and the city. Schaub said the 1999 deed grants Brew River use of Lot 1AA and requires the city to maintain 114 parking spaces “in perpetuity, provided that the property remains a restaurant and is not vacant for more than 24 months.” He said Brew River’s attorney has submitted a draft complaint to the mayor’s office and asked the council to address the issue to avoid litigation. Schaub: “These rights that are spelled out in our deed cannot be transferred to another party.”

Developers then gave project updates. Brad Gillis (Salisbury Town Center Apartments LLC) said his company signed a land disposition agreement (LDA) with the city to build apartments on Parking Lots 111 and 15 and that the LDA makes the city’s commitment to build a public parking garage a “material term” of the agreement. Gillis said the developer has achieved final site plan approval by council resolution 3263, has submitted parking garage construction drawings to the Department of Infrastructure and Development (DID), and remains ready to execute a construction management at‑risk agreement and to contribute $750,000 toward the garage’s planning, permitting, construction and maintenance. Gillis requested the city sign the construction management at‑risk agreement, introduce a bond ordinance to finance the garage and review permit drawings the developer says have been in DID review for lengthy periods. Gillis told the council: “Building Salisbury Town Center Apartments and the new parking garage is 1 project, not 2.”

David Layfield, founder and principal of Green Street Housing, described the Lot 30 SPY Market Center project: a 50‑unit affordable rental development over an 11,000‑square‑foot public market. Layfield said his group has negotiated a pre‑priced PILOT (payment‑in‑lieu‑of‑taxes) and a 99‑year ground lease for a small lot to provide 23 auxiliary parking spaces, documents his attorney transmitted to the mayor’s office in March. Layfield said his financing depends on the city executing the PILOT and ground lease or, failing mayoral signature, a council ordinance committing the city to the agreed forms so lenders and investors can proceed. Layfield: “I need the city to fulfill its contractual obligation to me.” He also described the affordability tiers for the project (a mix of 30%, 40%, 50%, 60% and a few units at 80% of AMI), and said that recent interest‑rate and construction‑cost increases required financial re‑workings.

Nick Simpson of Mentis Capital summarized Lot 10 (hotel/conference center) efforts. He said the State approved grant funding for the project and that the outstanding item blocking state funds is a signed subrecipient agreement identifying eligible expenses (Exhibit B). Simpson asked the city to finalize the subrecipient agreement so state funds can flow to the project. He said a franchise or branded operator (Tapestry by Hilton) had been selected and design work proceeded in expectation of the subrecipient agreement, and warned that without consensus on eligible expenses the project risks losing the awarded state dollars.

Council members and staff acknowledged outstanding DID review steps and legal reviews. Mayor Taylor and staff said they would confer with the relevant departments, request the draft PILOT and ground‑lease forms from legal staff (counsel said the PILOT had been approved for legal sufficiency) and asked staff to circulate the documents to council for review. One council member asked that the documents be forwarded to council so members can see the exact language. DID director Nick Wojtek introduced a separate annexation item later in the meeting (Pohanka annexation) and described planned infrastructure extensions along Route 13.

Why it matters: These three downtown projects are interdependent with public parking, PILOT and subrecipient agreements and affect downtown parking supply and housing stock. Developers told the council they cannot close financing or move to construction until the city executes or otherwise commits to several contract forms. Residents and business owners raised that a shortage of parking and the transfer of parking rights could harm existing downtown businesses.

What the council asked staff to do: review outstanding DID permit files (Gillis said building permit drawings have been in DID nearly two years), circulate the PILOT and ground‑lease drafts and the subrecipient exhibit listing eligible state‑funded items, and provide council with the documents for consideration.