City Council Workshop April 17, 2024: Lucas Village Redevelopment, PILOT Policy, and MPDU Fund Allocation
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City Council Workshop – April 17, 2024
The Mayor and Board of Aldermen of Frederick, Maryland held a workshop on April 17, 2024, beginning at 3:00 PM. The meeting focused on proposed uses of the Moderately Priced Dwelling Unit (MPDU) Housing Fund, revisions to the Payment in Lieu of Taxes (PILOT) policy, and specific project proposals. No votes were taken to allocate MPDU funds; instead, the board discussed and provided direction for future public hearings.
Consent Calendar
- Approval of Minutes (April 3, 2024): Approved unanimously, 5-0.
Public Comments & Testimony
- Linda Parker (Lucas Village resident): Expressed support for the Housing Authority’s relocation and redevelopment plans. She requested clarity on sinkhole responsibility, noting that a sinkhole in the community garden appears to be on city property. She emphasized residents’ desire to return to a rebuilt community.
- Ryan Trout (517 Wilson Pl., Frederick): Advised that MPDU funds should prioritize new construction over gap financing or preservation. He suggested setting aside a percentage of the fund for new construction and creating predictable per‑unit gap financing. Regarding Lucas Village, he proposed a land‑swap or delaying redevelopment to allow the city to remediate the sinkhole‑prone land and later require affordable housing on the site, rather than rebuilding immediately in a currently isolated area.
Discussion Items
- Housing Authority of Frederick – Lucas Village Redevelopment:
- The Housing Authority seeks a $1 million grant from the MPDU fund for pre‑development costs of rebuilding Lucas Village (88 existing units replaced by 220 units) and $462,000 for relocation rental support for displaced residents.
- Angie Lawler (Deputy Executive Director, Housing Authority) presented the project, citing sinkhole risks, relocation challenges (only about a dozen rental communities in Frederick have rents below the voucher payment threshold, with waiting lists of 6–12 months), and plans to use geotechnical solutions similar to nearby Hamilton Station. She emphasized preserving community ties and offering first right of return to current residents.
- Board Positions:
- Alderman McShane: Opposed the $1M grant for rebuilding on the same site, calling it a social justice issue; more open to relocation rental support.
- Alderman Shackelford: Expressed strong support, viewing the project as an opportunity to right historical wrongs and catalyze East Frederick redevelopment. He stressed the need for proper investment to ensure residents can return.
- Alderman Russell: Raised concerns about concentrating poverty in an industrial area, questioned the wisdom of rebuilding on sinkhole‑prone land, and noted the conceptual conflict with inclusionary zoning goals.
- Alderman O’Connor: Initially skeptical of the location but acknowledged potential benefits if site challenges (sinkholes, train noise) are mitigated. Asked for detailed information on sinkhole remediation, cost of a sound wall, and a timeline.
- Alderman Azem: Noted that the project aligns with transit‑oriented development principles and sound planning, and supported moving forward.
- After extensive discussion (approximately 2 hours), consensus for the $1M grant was only 3 votes (needs 4 to amend budget). The mayor directed staff and the Housing Authority to provide additional information, particularly to Alderman O’Connor and McShane.
- PILOT Policy Revision:
- Ruth Waxter (Assistant Director, Housing & Human Services) presented revisions to the city’s PILOT policy, originally from 1991 and last revised in 2014. Key changes: (1) removing the requirement for a joint city‑county PILOT agreement (allowing city‑only PILOTs if the county declines); (2) deleting the formula that ties the city’s abatement to the county’s abatement; (3) adding a new section for “enhanced abatements” that prioritize projects providing deeply affordable units (30–50% AMI), senior housing, brownfield/blight redevelopment, or job creation. Board members raised concerns about the word “will” preferring “may” to avoid mandatory prioritization of blighted areas. Staff agreed to revise language to “may”.
- Madison and Junction PILOTs:
- Mike Font (New Harbor Development) described the Madison project (60 units) and noted that a deeper PILOT (an additional $400/unit/year, totaling $24,000) would help close a financing gap caused by rising interest rates and construction costs.
- CJ Tyree (Taft Mills Group) presented the Junction project (over 200 units, shovel‑ready). He explained that PILOTs provide operating expense stability, critical for projects with rent restrictions; the revised policy gives the board flexibility to offer enhanced abatements without being tied to the county’s more restrictive policy.
- The board expressed general support for the revised PILOT policy and both project‑specific PILOTs. These will be placed on a public hearing agenda.
- Rental Gap Assistance Programs:
- Two separate grant requests were presented (Religious Coalition for Emergency Human Needs and Advocates for Homeless Families). The board agreed to seek funding sources other than MPDU funds for these programs, pending identification of appropriate funds. No action taken at this workshop.
Key Outcomes
- Lucas Village Redevelopment Grant ($1M): No consensus to move forward at this time. Staff and Housing Authority to provide additional technical information (sinkhole mitigation, cost of sound wall, detailed funding sources and timeline) to address concerns of Alderman O’Connor and McShane. The item will return to a future workshop when four votes are likely.
- Lucas Village Relocation Rental Support ($462,000): Board expressed support for the expenditure but directed that funds come from a source other than the MPDU fund. Staff will identify alternative funding and bring a proposal to a future workshop.
- PILOT Policy Revision: Board reached consensus to revise the policy with the change of “will” to “may” in the enhanced abatement criteria. The revised policy and the Madison and Junction PILOT agreements will be placed on a public hearing agenda for the first meeting in May (date TBD).
- Madison Deferred Loan Grant ($800,000 from MPDU fund): Sufficient support exists; the grant agreement will be included in a budget amendment for the first meeting in May (requires 4 votes).
- Junction Deferred Loan Grant (amount not specified, but referenced): Similarly, will proceed on the same timeline.
- Rental Gap Assistance Programs (Religious Coalition, Advocates for Homeless Families): Deferred pending identification of non‑MPDU funding. Staff to return with a proposal.
Meeting Transcript
Good afternoon, and welcome to the mayor board of Alderman Workshop for the 17th of April. We begin with the Pledge of Allegiance. I pledge allegiance to the flag United States and America. And to the Republic for which it stands, one nation under God, indivisible with liberty and justice for all. Scrolling on the screens here in the boardroom are employee years of service on a quarterly basis. With five years of service, we have Blake Lincoln in Water Services, Katie Smith in the police department, Sean Smith in Street Maintenance, Lauren Prescott in Code Enforcement, Christopher Only in Sanitation, Brandy Shoemaker in Sewer Maintenance, Rich Rochford with the police department, Sean Fernholz with the police department, Lindsay Coop with the police department. Ten years of service, Jenna Willoughby, sustainability, Jennifer Cobley, police, Jonathan Schultz, police, Corey Borns, police, Stacey White, Housing and Human Services, Frank Wilson, Office of the Mayor, Zachary Davis, Police. Fifteen years of service, David Wynnpigler Jr., Water Service, Katie Barkdall, budget, Zachary Fliegel, Sanitation. 20 years of service, George Shankel, sewer maintenance, Christopher Connor, Engineering, Nelson Stream Jr., Street Lights and Signals, Greg Davis, the Weinberg Center, Dennis Ramsburg, Park Maintenance, 25 years of service, Deb Alston with the police department, and 35 years of service, Steve Johnson with the parking department. Congratulations to all of those employees on hitting those milestones and thank you for your commitment to the city. We have minutes to approve from April 3rd, 2024. Move for approval. Second. Motion by Albert McZemCh, second by Alderman Russell. All those in favor, that is 5-0. Thank you very much. And what I want to do is to be as flexible as we can in terms of the board's intent this afternoon. What I would really like to achieve at the end of our time here today is to hear a little bit more details on some of the projects that have been proposed for uh funding through the MPDU program, either as uh grants towards affordable housing projects or some of the other initiatives that had been proposed. I would really like to the degree that we can do it, get some consensus to move whichever ones of these there's the desire to move forward forward to uh a public hearing as soon as possible. Uh if we're going to do anything that involves the movement of the MPDU funds, that is a budget amendment, and so we would require the consensus of four members to move those. So I appreciate everybody's participation today. One of the items that is not on this uh list of of topics for today is one that is already in progress to appear before the board of aldermen at the uh first meeting in May, which is a uh deferred loan uh grant uh proposal for uh the junction project. So we do have the junction pilot on here, but the deferred loan for the junction is scheduled. That agreement is scheduled to come to the board uh with the first meeting in May. So we can try and proceed through this list as it is here, or um uh we again uh if any member of the board wishes to proceed in a in a a different direction, we can we can certainly have that conversation before we get started, but uh uh I would suggest we we start at the beginning and then if we need to pivot, we can adjust uh as need be. So the first two items on the agenda today are uh the first three items, really one item um are uh efforts involving the housing authority. So I guess I would invite the housing authority or staff, whoever's gonna present and introduce to to do that uh first, and we'll go from there. Good afternoon. Ruth Waxter, Assistant Director of the Department of Housing and Human Services. Since Housing and Human Services is the only one on the agenda today, uh, I just before we get into Lucas Village redevelopment. I'd just like to start with kind of an overview of what we'll be presenting today and why we chose the order that we did. The agenda is broken down into three sections, like the mayor said. In sections one and three, we'll continue our discussion on HHS plan to invest monies from the moderately price priced dwelling unit or MPDU housing fund. The MPD unit MPDU program requires developers who opt out of building affordable housing units to make a financial contribution or a payment in lieu to the MPDU housing fund. The MPDU program provides that the MPDU funds be used to support development, preservation, and operation of affordable housing within the city. Currently, the housing fund is estimated at 6 million with additional contributions expected over the next several years. HHS's MPDU plan proposes an investment of approximately 8.272 million in the next three to five years in various housing initiatives. With MPDU housing funds, the City of Frederick has the unique opportunity of addressing housing challenges across the entire housing continuum from homelessness to rental assistance to homeownership and many stages in between. Providing funding to LITEC projects means that the city gets more bang for its buck. Two of these projects are ready, pending financing to proceed to settlement and break ground within the year. Lastly, in the third agenda item, we will be discussing two different rental assistance programs, which will provide funds to residents who are homeless or in danger of losing their homes. So first up, um the first agenda item is the approval of a grant agreement to the housing authority of the city of Frederick in the amount of one million dollars for the redevelopment of Lucas Village. Lucas Village is a public housing community community located at 155 Pennsylvania Avenue. Because of imminent health hazards, the Department of Housing and Urban Development has ordered the demolition of the entire development. Currently will receive a HUD voucher to relocate until the community is rebuilt. Now I'd like to turn it over to Angie Lawler, the deputy executive director of the housing authority who will give a presentation about the Lucas Village community and this redevelopment project. Thank you, Ruth, and thank you for the opportunity to come and share some more information with you about what's happening with Lucas Village. It's been a very big year for uh for this community. A lot has happened and there are a lot of implications, and uh, we're doing the best that we can to navigate that and appreciate any questions or feedback that you have that would help us do that as well as possible. Our goal is to our goal is to always do that and to always serve our residents in the best way that we can.
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