Developers and city leaders cut the ribbon on two new apartment buildings in West Baltimore last November, signaling the beginning of a long-awaited renaissance for a large, long-neglected swath of the city
Six months later, the buildings remain closed, leaving neighbors of the Center\West project in Poppleton in the dark and the city on the hook.
While the city and the developer did not explain the delays for months, they’ve known all along what’s wrong. Tucked into recently filed documents related to municipal bonds sold to support the project, developers described extensive interior water damage and drawn-out negotiations with insurers that began last fall to cover the repairs.
“Due to the failure of these insurance carriers to begin funding the approved scope of work the project has been delayed by 6 months at this point,” developers wrote.
The city is responsible for about $10 million in bonds already sold as part of a $58 million tax increment financing deal to pay for infrastructure work on the massive project, which was expected to eventually bring 30 apartment and commercial buildings to a struggling area of the city.
Under such TIF deals, increased property taxes on the project are diverted from city coffers to cover the bond payments. In this case, however, the developers successfully had an increase in the project’s real estate assessment reversed because the buildings have not opened. Nonetheless, the city confirms it had to begin making payments on the bonds in 2017 without the increase in revenue.
The delay is the latest one for the $800 million, multi-phase project launched in 2005 for the 33-acre area just north of the University of Maryland BioPark and west of Martin Luther King Jr. Boulevard. Officials initially blamed the recession and weak recovery that reduced demand and made financing difficult, but the project appeared back on track at the November ribbon cutting. A press release at the time announced that the buildings were 95 percent complete.
But the organizers of the event, usually held to mark a project’s opening, may have been overly optimistic.
“I think there was a little confusion around the November ribbon cutting,” Dan Bythewood, co-founder and president of the project developer La Cité Development, wrote in an email in early May to The Baltimore Sun. “The November event was not the grand opening, it was a ceremonial ribbon cutting. We are still in construction currently.”
In a subsequent email, after being questioned about the water damage, he said he has submitted new plans to the city and said the approximate time for completion is now August.
He did not explain what caused the damage or whether it occurred in both buildings or just one.
“The water damage is a construction item and being corrected,” Bythewood said.
These buildings in phase one, which broke ground in January 2017, are supposed to include 262 apartments, 17,500 square feet of ground floor retail space, parking and a park built in front of the historic Edgar Allen Poe House and Museum. The developer committed to setting aside 20% of the units for affordable housing.
Eventually, the 30 buildings were planned to include 1,800 units of mixed rental and owned housing, 250,000 square feet of commercial space, new parks and parking garages, and new roads and utility upgrades among infrastructure improvements.
Baltimore City Department of Housing and Community Development officials who are overseeing the tax increment financing deal maintained that the apartments were 98 percent complete as recently as March.
More recently, Tammy Hawley, a city housing spokeswoman, said the water damage was found during inspections, although it doesn’t appear to be noted in inspection records provided by the department.
She said the developers have not requested an occupancy permit.
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Meanwhile, she said, as repairs are made, “we are paying on our bonds.”
The bond documents filed in December and again in March report “extensive water damage to all the project’s cabinets in the kitchens and bathrooms, portions of the cabinets must be removed, replaced, and all surfaces treated, repaired and/or replaced.”
The documents also say the developer notified city officials and lenders about the delayed payments by the project’s insurance carriers.
City Councilman John Bullock, who represents the area, said he didn’t know about the damage, only that there were project delays. Considering the benefits to the neighborhood and the city from the investment, and the city’s financial role selling bonds and acquiring blocks of property for the project, he wants the matter sorted out.
“I suspected more work needed to be done,” he said. “I have heard questions from neighbors; the ribbon cutting was several months ago. My expectation was that it was moving forward. Hopefully it does happen.”
Some neighbors seemed less hopeful.
“We always get the short end,” said Larry Gregory, who lives near the apartments. “That project should have been completed. I am shocked.”