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OPENPUBLICA · PUBLIC MEETING RECORD

Record of Proceedings

Government Operations Committee Meeting Summary - October 16, 2025

City Council Committee Meetings — Thursday, October 16, 2025

BodyFrederick, Maryland

SessionCity Council Committee Meetings

DateThursday, October 16, 2025

StatusFILED

Video Record

0:00 / 1:16:15

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1:05

Call to order the government operations committee meeting for Thursday, October 16th, 2025.

1:21

Probably just standards.

1:23

One nation.

1:31

Welcome everyone.

1:34

Approval minutes, September 18th, 2025.

1:37

Is there a motion?

1:40

Move for approval.

1:42

Second.

1:42

Motion by Councilmember Kazimczek, seconded by Councilmember Russell.

1:45

All those in favor.

1:46

Motion carries three zero.

1:49

First on our agenda today is an MPDU fund recipient update Habitat for Humanity.

1:56

This item would presented by Habitat for Humanity.

1:59

Welcome.

2:04

Thank you.

2:15

So we appreciate the chance.

2:41

So we're really happy to have a lot of the team here today.

2:45

And speaking of being really happy to uh to have the team here today, we're also really happy to get the chance to uh to provide an overview of our West All Saints condos, particularly as it relates to the MPDU funding that we received from the city.

2:59

So with that said, we'll tell you a little bit about our West All Saints residential condominiums.

3:09

So while 12 condos in the face of several developments here that are producing hundreds of units uh may seem smaller.

3:18

Uh for habitat, this is the most ambitious project in our history uh when you factor in that habitat is typically known for single family home builds uh along those lines.

3:29

So this was a chance to transition from single family home builds into multifamily condos, uh, and in this case on a community land trust, and we'll talk about that more in just a moment.

3:42

Uh and in particular with West All Saints, it's two phases of six condos each.

3:47

Uh, when completed, uh this is going to be a dozen permanently affordable homes for low to moderate income families uh that are at or below 80% AMI.

3:58

And uh we'll tell you a little bit about the affordable housing land trust.

4:06

So the Habitat founded this in 2013 as one of the first community land trusts in the state of Maryland.

4:13

Uh, prior to West All Saints, the land trust held seven single family homes throughout Frederick County.

4:20

And the Habitat had to work to get the condos into a land trust because uh prior to last year, the you technically couldn't have a you know, have condos on a land trust.

4:34

Uh thankfully the state of Maryland, the Senate House passed legislation in October 2024 that allowed for that.

4:42

Uh unfortunately for habitat.

4:44

Uh we there was a workaround around that, uh, but we had to pay the legal fees to see that through, so we were happy to be a part of uh supporting that legislation uh and hopefully provide a template for the rest of the state.

5:02

I'm gonna talk about the sorry, I'm remiss in talking about we were talking about the land trust, but uh also talking about our new homeowners.

5:10

So you actually get a view with one of our new homeowners at the community block party uh this year, so they are enjoying the benefits of said land trust.

5:18

With that, I'm gonna turn it over to Darby to give a little bit more background on our community land trust.

5:31

So that organizations like Habitat can actually be stewards of that property over the long term, but it also allows buyers to purchase a home, use that home and that land while they're living there.

5:43

So RCLT holds title to the land that the homes are built on under a 99-year lease and sells the home with all the rights of ownership and all the use of the land to individual home buyers.

5:57

They pay a small monthly ground rent to the land trust, and they pledge that when and if they sell that home, they will sell it to a similarly bracketed um income buyer, so 50 to 80 or 30 to 50 or whatever that is.

6:14

But there's a formula in the agreement they sign which entitles them to receive back a portion of the equity that they have earned while they have lived there.

6:24

So if the value of the home, appraised value of the home is increased by say 100,000, they will earn back 40 percent of that as in the new price.

6:35

So they would don't get 100 percent of what they would have gotten, but they're paying it forward for a similar, a similarly situated um low to moderate income buyer.

6:44

And just so you know, we've had um we had seven single family land trust homes, and we've actually had two successful resales of those homes um since 2013, one in downtown Frederick and one out in the Yellow Springs area.

6:58

I hate to interrupt you here, but this is the part that I'm not sure that I completely understand.

7:03

Um I understand the idea of it.

7:05

But how do you find those buyers?

7:10

How do you find those buyers that are at the 80 percent and below um are the houses priced at an I've just dealt with this before that it's it it's a it's a very odd thing, uh houses priced at that point in time the house was priced at like in the high 300s, but they really could only somebody who could afford right around 220 was who was permitted to buy the house.

7:45

So the they stayed on the market literally for years because of that issue.

7:50

So how do you do that that part?

7:53

I will say that for us that hasn't happened.

7:56

Um there may be other um control some controlled sales where that's happened, but I know that didn't happen um with either of our resales, although I think it's a little bit of a chicken and an egg for a first purchase, to be honest.

8:07

Um we set the price initial pricing for West All Saints kind of based on what we saw in the people that had said they were interested in it.

8:17

So it it we price it so that we as Habitat and the Land Trust can get something back in terms of the cost that we've put into it, but we also want to make sure that it's affordable for somebody within that income range.

8:32

So with this particular project, because of being downtown and taxes and all of the other costs associated with basically continuing to live in the property, we priced it such that um the full monthly all-in is still at 30 percent of the person's income.

8:50

But it is a little, it's a bit of a chicken and an egg in terms of the kind of mortgaging that mortgage financing that we can get.

8:58

We find this is way more detailed than I anticipated going into, so I apologize um if I'm not pre fully prepared for it.

9:05

Um but the two units that we've sold, we were able to offer a zero percent mortgage.

9:10

So even though the listed price was say two hundred and eighty-five thousand, they're not paying interest, they're not paying EMI, PMI.

9:19

So it the affordability for the first time.

9:22

So they're actually taking the loan out from this where I'm not understanding.

9:29

The two loans that we've done for this property, we started the initial underwriting and then were able to get a bank to purchase them at a discount so that we could offer the zero percent loan, and we wouldn't we didn't make what we would have made with a commercial mortgage, but a commercial mortgage would also have been um unsustainable for somebody at that income bracket.

9:50

So it's finding organizations that can help us extend those zero percent loans that makes that possible.

Discussion Breakdown — Share of Meeting

Affordable Housing█████████████████████████████████████████████59%

Economic Development███████████████20%

Parks and Recreation████5%

Procedural███4%

Active Transportation██3%

Transportation Safety██3%

Historic Preservation██2%

Engineering And Infrastructure██2%

Fiscal Sustainability█1%

Summary of Proceedings

Government Operations Committee Meeting Summary - October 16, 2025

The Government Operations Committee convened on October 16, 2025, to review the status of the West All Saints affordable housing project with Habitat for Humanity and to discuss the city's inventory of underutilized properties capable of future development. The meeting featured detailed presentations on the financial complexities of permanent affordability through a Community Land Trust, construction challenges faced by the nonprofit, and a strategic overview of city-owned assets including sites in the West Side area and downtown.

Consent Calendar

Minutes Approval: Approval of the minutes from the September 18, 2025, meeting was moved by Councilmember Kazimczek and seconded by Councilmember Russell. The motion carried with a vote tally of 3-0.

Public Comments & Testimony

Public Inquiry on Affordability: Councilmember Kazimczek (speaking as a council member but expressing personal interest as a constituent) requested detailed financial clarification regarding the project's cost structure. The Councilmember expressed strong support for the concept of "missing middle" housing and the goal of preserving generational wealth, noting they would support similar initiatives if the city funds were clearly applied to construction costs to lower prices for buyers.
Community Partner Recognition: Councilmember Kazimczek (as Council member) publicly thanked the Asbury United Methodist Church for their mission-based partnership, acknowledging their decision to prioritize lasting affordability over a potential market-rate sale.

Discussion Items

Habitat for Humanity: West All Saints Condos Update
- Project Overview: Habitat presented an update on the West All Saints residential condominiums, a 12-unit, permanently affordable project (60-80% Area Median Income or AMI) situated on a Community Land Trust (RCLT). Two units (108 and 100 West All Saints) have already been sold and occupied.
- Land Trust Mechanics: Darby explained the 99-year lease structure where RCLT holds the land title, and homeowners own the structures. Resale restrictions ensure the home remains affordable, with buyers receiving a portion of the equity accrued.
- Financial Challenges & Construction Costs:
  - Speaker (Habitat) noted construction costs have risen significantly due to pandemic delays, supply chain interruptions, interest rate hikes, and unique historic preservation challenges (e.g., a significant rock vein encountered during foundation work for the infill building).
  - The total project cost is approximately $2.5 million for six units (approx. $416,000 per unit in Phase 1), though the original estimate for the full 12-unit project was $3.1 million.
  - Speaker (Habitat) clarified that while the city's MPDU funds of $200,000 were received, they were applied immediately to operational expenses and construction costs rather than the home repairs program.
- Mortgage Financing Strategy:
  - Speaker (Habitat) detailed a complex financing model where Habitat sells the mortgage to a local bank at a 27% discount (73 cents on the dollar) to allow the bank to offer the homeowner a 0% interest rate mortgage on the full face value (e.g., $250,000). This model is necessary because conventional rates (6-7%) would result in monthly payments unaffordable for the target income bracket.
  - Speaker (Habitat) expressed concern that a local bank recently acquired by another institution has paused this 0% lending program. They are currently seeking alternative partners (e.g., a credit union) or are prepared to discount the property sale price heavily to allow for conventional financing, which would reduce Habitat's return on investment.
- Income Qualification:
  - Speaker (Habitat) stated that income limits for a two-person household are approximately $85,450 and $106,800 for a four-person household, tied to the Washington region AMI.
- Future Scalability: Councilmember Kazimczek expressed high interest in the model but questioned the scalability of non-cookie-cutter historic rehab projects. Habitat acknowledged they are learning best practices for future scalability.
City-Owned Properties with Development Potential
- Overview: Director of Economic Development Richard Griffin and COO Zach Kirshner presented a list of city-owned properties identified as potentially underutilized or excess, distinct from active municipal facilities or parks.
- Site Specifics:
  - Former Trinity School Site: Currently hosts Housing and Human Services and high-utilization recreational space (pickleball); identified previously for potential mixed-use development.
  - Sander Farm: Used by DPW for storage/laydown; a relocation site at Fort Dietrich is being explored but awaits federal information.
  - Husky Park & Site J/K (West Side Regional Park):
    - Site J/K (along Carroll Creek Park) is a former brownfield quarry. An existing MOU with a developer (previously Ren, now Four-Star) offers an option to construct a shared-use path and extend Bond Street, but this is not a binding requirement. Councilmember Kazimczek and others questioned the leverage held by the city regarding this option and suggested terminating the agreement if it holds no value.
    - Staff suggested that reissuing an RFP with a mandatory path construction requirement could be a way to secure the infrastructure.
  - Site C2 (West Side Regional Park, behind amphitheater): Identified as a location needing permanent public restrooms and concessions. RFPs previously issued for housing or performing arts were stalled by the recession.
  - Site E (Mark Station Parking Lot): Potential for structured parking mixed with residential/office; the city has applied for state transit-oriented design designation to encourage ridership.
- Process: Staff reiterated that any disposition of these properties requires a determination that no public use is needed, followed by compliance with the Property Disposition Policy.

Key Outcomes

Habitat Project Momentum: The West All Saints project is proceeding with Phase 1 units occupied. Habitat is actively seeking new financing partners due to the pause of a specific 0% lending program. Councilmember Kazimczek expressed a desire to schedule a deeper dive to understand the financial mechanics.
Property Review Directives:
- The committee acknowledged the list of underutilized properties.
- Councilmember Kazimczek requested staff review the binding nature and value of the MOU regarding the shared-use path at Site J/K to determine if terminating the agreement is viable if the developer is not exercising the option.
- Staff proposed that Sites J, K, and C2 are the most viable candidates for immediate RFP reissuance due to prior community interest and previous processing.
No Action/Votes Taken: No specific resolutions or votes were recorded during this discussion session; the items remain under committee review and staff analysis.
Next Steps: Staff to explore the value of the Site J/K MOU and to potentially initiate the RFP process for excess sites pending mayor's office direction.

Meeting Transcript

Call to order the government operations committee meeting for Thursday, October 16th, 2025. Probably just standards. One nation. Welcome everyone. Approval minutes, September 18th, 2025. Is there a motion? Move for approval. Second. Motion by Councilmember Kazimczek, seconded by Councilmember Russell. All those in favor. Motion carries three zero. First on our agenda today is an MPDU fund recipient update Habitat for Humanity. This item would presented by Habitat for Humanity. Welcome. Thank you. So we appreciate the chance. So we're really happy to have a lot of the team here today. And speaking of being really happy to uh to have the team here today, we're also really happy to get the chance to uh to provide an overview of our West All Saints condos, particularly as it relates to the MPDU funding that we received from the city. So with that said, we'll tell you a little bit about our West All Saints residential condominiums. So while 12 condos in the face of several developments here that are producing hundreds of units uh may seem smaller. Uh for habitat, this is the most ambitious project in our history uh when you factor in that habitat is typically known for single family home builds uh along those lines. So this was a chance to transition from single family home builds into multifamily condos, uh, and in this case on a community land trust, and we'll talk about that more in just a moment. Uh and in particular with West All Saints, it's two phases of six condos each. Uh, when completed, uh this is going to be a dozen permanently affordable homes for low to moderate income families uh that are at or below 80% AMI. And uh we'll tell you a little bit about the affordable housing land trust. So the Habitat founded this in 2013 as one of the first community land trusts in the state of Maryland. Uh, prior to West All Saints, the land trust held seven single family homes throughout Frederick County. And the Habitat had to work to get the condos into a land trust because uh prior to last year, the you technically couldn't have a you know, have condos on a land trust. Uh thankfully the state of Maryland, the Senate House passed legislation in October 2024 that allowed for that. Uh unfortunately for habitat. Uh we there was a workaround around that, uh, but we had to pay the legal fees to see that through, so we were happy to be a part of uh supporting that legislation uh and hopefully provide a template for the rest of the state. I'm gonna talk about the sorry, I'm remiss in talking about we were talking about the land trust, but uh also talking about our new homeowners. So you actually get a view with one of our new homeowners at the community block party uh this year, so they are enjoying the benefits of said land trust. With that, I'm gonna turn it over to Darby to give a little bit more background on our community land trust. So that organizations like Habitat can actually be stewards of that property over the long term, but it also allows buyers to purchase a home, use that home and that land while they're living there. So RCLT holds title to the land that the homes are built on under a 99-year lease and sells the home with all the rights of ownership and all the use of the land to individual home buyers. They pay a small monthly ground rent to the land trust, and they pledge that when and if they sell that home, they will sell it to a similarly bracketed um income buyer, so 50 to 80 or 30 to 50 or whatever that is. But there's a formula in the agreement they sign which entitles them to receive back a portion of the equity that they have earned while they have lived there. So if the value of the home, appraised value of the home is increased by say 100,000, they will earn back 40 percent of that as in the new price. So they would don't get 100 percent of what they would have gotten, but they're paying it forward for a similar, a similarly situated um low to moderate income buyer. And just so you know, we've had um we had seven single family land trust homes, and we've actually had two successful resales of those homes um since 2013, one in downtown Frederick and one out in the Yellow Springs area. I hate to interrupt you here, but this is the part that I'm not sure that I completely understand. Um I understand the idea of it. But how do you find those buyers? How do you find those buyers that are at the 80 percent and below um are the houses priced at an I've just dealt with this before that it's it it's a it's a very odd thing, uh houses priced at that point in time the house was priced at like in the high 300s, but they really could only somebody who could afford right around 220 was who was permitted to buy the house. So the they stayed on the market literally for years because of that issue. So how do you do that that part? I will say that for us that hasn't happened. Um there may be other um control some controlled sales where that's happened, but I know that didn't happen um with either of our resales, although I think it's a little bit of a chicken and an egg for a first purchase, to be honest. Um we set the price initial pricing for West All Saints kind of based on what we saw in the people that had said they were interested in it.

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