Developers learned yesterday that they had been denied state tax credits that would have helped finance the transformation of the old Hampstead Elementary School into a senior housing center, a project seen by town officials as the key to Main Street revitalization efforts.
Despite the setback, developers and Hampstead leaders said they think the project will proceed.
"We're disappointed, but not discouraged," said Cathleen Cadoux of Westminster-based Cadoux Development, one of three partners on the development team. "We hope the county doesn't see in any of this a sign that we're losing interest in the project."
The developers, selected by Hampstead leaders last year, requested millions of dollars in low-income housing tax credits for the redevelopment, but state housing officials denied the request for a second time yesterday. Of 25 applicants statewide, seven received the credits, which totaled about $9 million, state housing officials said.
The Carroll commissioners had agreed to sell the school and its 5-acre site on Route 30 to the town if the tax credits were approved. The town then would have sold the building to the developers.
Under the proposal, Baltimore developer Struever Bros., Eccles & Rouse would join Cadoux and the nonprofit Interfaith Housing of Western Maryland to create about 90 apartments for senior citizens with incomes of no more than $28,000.
But now, plans for the sale might have to be renegotiated because the county's tentative agreement to the deal lasts only through the end of this month.
"I really hope the project still goes on," said Commissioner Julia Walsh Gouge, who has consistently supported the idea. The other two commissioners did not return calls seeking comment yesterday, but Hampstead leaders said they hope the county won't back away from the project.
"This doesn't change anything in my mind," said Hampstead Mayor Christopher Nevin. "On the one hand, I'm frustrated because, at least as I understand the process, we have all the points covered that we need to be approved for this project. But we remain determined."
The town has pursued ownership of the building - maintained and used as a storage facility by the school board - since the mid-1990s. The school has deteriorated in the 10 years since it was last used, Hampstead officials say.
The town's revitalization plans also include a new municipal park, sidewalks connecting all of Hampstead to downtown, new bicycle paths and underground electrical power lines. The school building, a place where many Hampstead residents attended classes, would be the centerpiece.
The developers would refurbish the 91-year-old, U-shaped brick building that faces Main Street, demolish the addition in the back and build a new addition. They have estimated that the project would cost about $10 million. Cadoux said the developers would meet with Department of Housing and Community Development officials to ask why their request for tax credits was denied. If housing officials don't provide reason to believe future applications might be successful, she said, developers might have to seek other financing avenues.
County and town officials have been negotiating a sales contract for the property. Town officials first thought the commissioners would give them the property, but the price has risen to $100,000. Hampstead officials reluctantly agreed to the increase, but haven't signed the contract because it includes a clause that would give the property back to the county if the Struever deal falls through. Nevin said yesterday that he hopes the sale can be completed even without full financing for the redevelopment.
But, the commissioners have said they don't want the property in Hampstead leaders' hands with no definite deal in place.
At least one person was happy that the tax credits request was denied. Roy Harmon owns an antiques store on Main Street and has, in the past year, been an outspoken critic of Hampstead government in general and the old school project in particular.
"I'm pleased to see it's not going in that direction," he said yesterday.
Harmon says Hampstead officials approved the deal without assessing the value of the old school property. Town leaders have said the dilapidated building and surrounding fields have little market value, but Harmon calls this argument ludicrous.
Harmon said he hopes the state's denial of the tax credits will inspire a complete rethinking of potential uses for the school.
Town officials say they've showed the building to commercial developers, who responded with little interest, and that the redevelopment was subject to an open-bid process that drew only two viable proposals, both for senior housing.