Baltimore’s spending board has approved forgiving one loan in exchange for a developer assuming the debt on another as part of a proposed ownership change at Alcott Place apartments.
On Wednesday, the Board of Estimates agreed to forgive $711,185 of a CDBG loan and accrued interest. In exchange, Alcott Place LLC agreed to assume a HOME Investment Partnerships Program Loan not to exceed $1.32 million.
“The goal of the restructuring is to maintain the long term viability of the project as an affordable housing asset that serves seniors in the Park Heights neighborhood,” Cheron Porter, a spokeswoman for Baltimore Housing, wrote in an email.
Alcott Place LLC is controlled by a company jointly owned by Jeff Paxon and Severn Development Co. It has agreed to purchase the building from its current owner Savannah Development Corp., which initially took on the debt.
Porter wrote in an email the reason for the sale is the “current owner is in poor health and the project has not been well managed recently.”
Allcott Place LLC intends to add seven new units to the 22,000-square-foot apartment building, which currently has 44 units and serves seniors earning from 50 to 60 percent of area median income. The building, located in the 2700 block of Keywroth Avenue, was originally Louisa May Alcott Elementary School, sold by the city in 1989 and converted to apartments a year later.