Affordable housing units planned for BRAC 

Posted: 7:30 pm Wed, December 30, 2009
By Robbie Whelan
Daily Record Business Writer

Two planned housing projects near Aberdeen Proving Ground will bring affordable and workforce housing units to an area that is expected to receive about 19,000 new jobs over the next two years as part of the federal Base Realignment and Closure process, known as BRAC.

Maryland’s Department of Housing and Community Development announced late Tuesday that Conifer Realty LLC, based in Rochester, N.Y., and Stavrou Communities of Annapolis would build two projects representing a combined investment of more than $17 million, much of it federal stimulus money.

“These developments [are] great examples of how federal, state and local collaboration can revitalize communities and expand affordable housing options for Maryland’s hardworking families and seniors,” said Raymond A. Skinner, secretary of the DHCD.

North Creek Run, a garden apartment project with eight one-bedroom apartments and 45 two-story rental town houses, is planned for Razor Strap Road in North East. It will be developed and owned by Conifer and paid for with a mix of private loans and public incentives.

DHCD awarded the project $821,050 in Low Income Housing Tax Credits, which Conifer plans to sell to PNC Bank in return for a $5.4 million equity stake in the project. The tax credits, part of a federal program established in the late 1980s, are meant to shield corporate earnings from federal taxes in return for investment in affordable housing. With the collapse of the mortgage market, the value of these tax credits to investors has fallen 20 to 30 percent, according to state officials.

“It’s still a challenging market. We experienced a boom in our industry like never before, and it was followed by a precipitous drop,” said Andrew Bodewes, a project director for Conifer. “That drop has had a significant effect on our ability to present feasible deals.”

But North Creek Run, as well as the other BRAC-related project, an 80-unit apartment complex for seniors called Perryman Station, is buoyed by a $3 million loan under the Tax Credit Assistance Program, which was established as part of the federal stimulus package signed into law in February.

In addition to the federal funds, Perryman Station’s financing comes from a $3.1 million mortgage from Bank of America, a $270,643 loan from Harford County, and a $200,000 state energy grant. As with North Creek Run, Perryman Station received Low Income Housing Tax Credits from the state, which it used to raise $5.7 million in private equity through Bank of America.

“This stimulus package was created to fill that gap associated with the loss of purchasing power of that tax credit. It was a way of dealing with that sudden loss of value to make projects that two years ago were feasible, feasible now,” said John Maneval, deputy director for multi-family development with the state’s housing department.

So far, Maneval said, the state agency has allocated 98 percent of a $31.7 million federal grant. All of the money in the program must be spent by 2012, he added.

Other state and local officials have said that workforce housing is an especially important piece of the BRAC puzzle.

“The bottom line is that when people have looked at BRAC they’ve thought of the six-figure scientists and engineers and those types of jobs, without realizing that behind that there are the $30,000-a-year draftsmen,” said William Ariano, deputy director of DHCD for community development. “There’s a whole support infrastructure that’s coming with them.”

BRAC is expected to bring about 60,000 jobs to Maryland, mostly from the closure of Fort Monmouth, an army base in northern New Jersey. Most of those jobs will be at Aberdeen Proving Ground, an army base and weapons testing facility in Harford County, and Fort Meade, a defense intelligence facility in Anne Arundel County.

A report by Baltimore’s Sage Policy Group suggested that Harford County is on track to receive 19,000 new jobs and 6,500 new households. The Army plans to send 4,000 new jobs to the area over the next year. James Richardson, Harford County’s economic development director, said the real number of households coming is more like 10,000.

“The last time we built a condominium project was probably 20 years ago. … We do need that type of activity,” he said. “It’s happening on schedule. We’re going to see a big number shift next year. … We’re not too late, but we’re not too early either.”

Both companies spearheading the two BRAC-related projects have experience in Maryland real estate development. Conifer, which has been building affordable housing here for over a decade, owns and manages about 1,000 units in the state, including senior facilities in Prince George’s, Frederick and Carroll counties and an apartment complex in Owings Mills.

Officials from Stavrou, the company behind Perryman Station, could not be reached for comment, but the developer has built senior housing and rental projects in Upper Marlboro, Suitland, Silver Spring, Essex and Landover.