Work would begin this fall on a new nursing home on U.S. 1 and a 70,000-square-foot office building nearby if the Howard County Council approves the use of federal stimulus financing that would allow the developers to borrow construction funds at a lower interest rate.
Called Recovery Zone Facility Bonds, they allow a private entity to borrow at lower, tax-exempt interest rates, said Sharon Greisz, county finance director, reducing the cost of construction.
"The theory is that the cost of borrowing lowers the cost of the project and thus makes it more likely to move ahead," Greisz said.
The county had one project lined up for $8.4 million worth of the revenue bonds — a 64-room Lorien nursing home on U.S. 1 on the site of the closed Copper Stallion Motel in the 7600 block of Washington Blvd. in Elkridge.
Louis Mangione, vice president for development of Mangione Family Enterprises, the same firm that owns Turf Valley, said the old motel should be demolished within a few weeks and work on the $11 million Lorien Elkridge facility should begin later this year. Once built, he said, a second phase would follow with assisted-living apartments and other services for the elderly.
Although interest rates vary, he estimates the savings would be 1 percentage point a year on the nursing home, which would be built on the 11-acre site north of Route 175. The prospect of lower costs is pushing the project ahead, he said, "instead of waiting and waiting" to see what the markets will be like.
But authority to use up to $18.4 million worth of the bonds runs out at the end of this year, so the County Council is preparing to vote Monday night on legislation to authorize expansion of the county's designated recovery zone area. The expansion would include a swath of territory up to two miles west of Interstate 95, which was the previous western boundary. Each jurisdiction applying for the federal aid had to choose an area that needs revitalization.
At the council's hearing Sept. 20, the measure got support from the League of Women Voters but Dale Schumacher, who lives near the historic Belmont estate in Elkridge, objected to drawing an arbitrary line to broaden the zone without considering other places that may need help, such as the U.S. 40 commercial corridor or one of Columbia's struggling village centers. He called it "bad legislation," born of suspicions that grew as a result of the Howard Community College purchase and use of Belmont, which is now up for sale.
"What is the rationale?" he asked. "Why not 1.9 miles? Why not 0.5? Why not three miles?"
The Ulman administration has submitted legislation to approve $9 million worth of bond authority for the second project, an office building in an existing business park on the south side of Route 103 and the west side of Interstate 95.
Scott Dorsey, CEO of Merritt Properties, said his firm intends to start work early on a $13 million, two-story building that is environmentally state of the art if the council approves.
"The debt service will be reduced 1 to 1.25 percent. Obviously, it will help," he said. The firm is building the structure without having tenants signed to leases, but Dorsey said leasing has become more active in an earlier, identical building in the same park, so the firm feels it can go ahead at the Meadowridge 95 park, which replaced woods and old tires that had been dumped in the area for decades.
"We've seen encouraging signs in the market," he said. "We probably wouldn't start construction right away without the bonds."
County Councilman Calvin Ball, an East Columbia Democrat who represents the area, favors the projects and the authorization extending the boundary of the recovery zone.
"It's a great opportunity to increase jobs and economic development," he said.
The final council vote is scheduled for Oct. 28 on the two specific projects proposed for the aid. The council doesn't meet in November because of the general election.
larry.carson@baltsun.com