Goodwill (copy)

The Goodwill Industries property on East Church Street in Frederick, where developers plan to build workforce housing.

An agreement that would help pave the way for an 83-unit workforce housing project planned for a historic building east of downtown Frederick received unanimous approval Tuesday from the Frederick County Council.

The Payment in Lieu of Tax (PILOT) agreement, for an 80,000-square-foot project at 400 E. Church St., saves the developers $31,200 annually in county property taxes after improvements are made to the structure. The building is the former site of the Ox Fibre Brush Co. and current headquarters of Goodwill Industries of Monocacy Valley.

Milton Bailey, director of the county’s Department of Housing and Community Development, said the project would attract teachers, restaurant workers and others in the workforce to live in the city.

“It’s a historic preservation, and the fact the developer is undertaking it, it’s going to help stabilize that community and breathe a new vibrancy in the community,” Bailey said. “The rents are well below what rents are for one- and two- and three-bedroom apartments from a market-rate perspective.”

One-bedroom units will cost $854 per month, two-bedroom units will cost $1,500 and three-bedroom units will cost $1,660, hundreds of dollars below market-rate rent for apartments in Frederick, Bailey said.

County Councilman Steve McKay (R) asked Avram Fechter, a developer representing 400 East Church LLC, about how difficult it was to execute the project near Frederick’s historic district.

Fechter said meeting the state’s energy efficiency requirements, given the age of the building, was more difficult than financing and completing the project.

McKay also wondered what happens if a resident begins to make more money than when he or she moves into the apartment. According to the PILOT agreement, 73 apartments must be reserved for residents earning 60 percent of the area median income, with the remaining 10 being for those earning 40 percent of the area median income.

For the former, that’s $51,000 for a single adult and $72,780 for a family of four. For the latter, it’s $34,000 for a single adult and $56,000 for a family of four, according to the agreement.

Fechter said rents wouldn’t rise for that current resident, but the developer and landlord would need to make sure the next tenant was someone meant to occupy that unit.

“As a general rule, you come in kosher, you stay kosher. ... The program does not penalize success,” Fechter said.

After improvements, and given the PILOT agreement, the county property taxes for the building will be $37,348, after the $31,200 tax credit. City property taxes will be $28,984, a $24,213 annual decrease, if Frederick’s Board of Aldermen approves its PILOT with the developer in the coming weeks. State property taxes will remain level at $8,156.

Those changes take effect in fiscal 2021 and last for 40 years, according to staff reports.

The building was constructed in the 1890s and soon after, the Ox Fibre Brush Co. began manufacturing brushes there. It continued operations until 1967. Two years later, Goodwill moved in. Goodwill still has operations at the building, but it plans to move to a new location.

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Steve Bohnel is the county government reporter for the Frederick News-Post. He can be reached at sbohnel@newspost.com. He graduated from Temple University, with a journalism degree in May 2017, and is a die-hard Everton F.C. fan.

(8) comments

That guy

Just did some quick math, and this is hardly "affordable" housing. The US Department of Housing and Urban Development defines being "housing overburdened" as having >30% of your income allocated for paying rent. The maximum salary for the aforementioned 40% median income bracket is $34k. Thirty percent of $34k is $10,200 per year in rent, or $850/month, almost matching up with the $854/month rent they're offering for a one bedroom. So at $34k, you're just barely considered as housing overburdened, even with their smallest apartment offering.

The problem is that $34k is the MAXIMUM income, not the MINIMUM. As your income decreases, the proportion of your income going to rent increases. So based on these requirements they're putting in, if you want a one bedroom apartment from them, you are going to be AT MINIMUM rent overburdened at roughly 30%, and even worse if you make less than that.

"Affordable housing" only becomes affordable when you both decrease cost of living AND increase wages, which have been stagnant for the middle class for decades. This is sort of a step in the right direction, but much more sweeping action is needed to start pulling people out of poverty.

huskycats

What about the road? How can they widen it with buildings on both sides? What a mess this could be.

MD1756

So, the county and city are taking in $55,413 less a year in property taxes to allow people who earn 40% and 60% less than the median income, which means lower income taxes will be collected. How will that pay for the increased infrastructure costs for the increased population from those 83 dwelling units? There is no cap on the developer's and it appears that they are free to raise rents after the original occupants leave (but still get the tax credits?). How is that for the good of the all the tax payers? Someone in the government please provide us with the numbers showing the benefits outweigh the costs.

sue1955

Good (and true) comments so far. These officials always say that "affordable" housing attracts teachers (along with firemen and police). It's the public relations-speak to make such housing palatable to the general public. Like I've said before, those professions have higher salaries than what is officially qualifying potential tenants to move in. And for people who are married (or in "committed relationships") they have the credit and income to obtain market rate housing. Either that, they live outside of the county (e.g., West Virginia, Pennsylvania). Also, how many people really want to have their bank accounts reviewed and questioned by the "housing authorities," (if applicable depending on property management of the housing).



The question of children is a big problem (which I did not previously comment to Peter Samuals in a recent article on development). NO seniors and just people, in general, do not want to live below children. Housing that was specifically built for rentals are built quickly and shoddy in current times. That is regardless of "affordable" or not. Try living under a child(ren) who jump from furniture and run from one room to another. Think that parents control their children? Lotsa luck with that one.



And, the comment that people who are not on a lease are more likely in lower-end properties. This is evident in reporting of this issue, especially in other areas. It is also happening in Frederick. It is easy to pick out when something happens (e.g., fire) where a resident(s) states that they can't make comments because they are not on the lease. It also creates other problems including with additional vehicles taking up spaces in the applicable neighborhood,



Anybody who has experience in renting (especially long-term) knows the pitfalls and the sales pitchs of lessors. Oh, I'm surmising that prospective renters (especially younger people) will be enticed with the "party" room (containing a deluxe refrigerator that is NOT in your individual unit), exercise room, and maybe a pool (all depending on the particular property). None of that is going to compensate for a shoddy apartment where you will hear EVERYTHING that your neighbor(s) are saying and doing.

matthewboh

I, for one, am glad to hear about this. Much better than shoveling money at developers who put up 200 townhouses and leave the infrastructure costs to the current citizens of Frederick. Also, I'm shocked by the rhetoric and assumptions made by others in this thread. I wish they would meet up with some of the less fortunate in this community and get to know them. I know of several that teach school and have to work a second job to make ends meet. Maybe we need living wages more than tax cuts for the wealthy?

francesca_easa

They should select the recipients of the housing first and then build the units for the recipients. I am sure most units would need to be 1 or 2 units. Be careful of moving someone into 3 or 4 bedroom so their freeloading relatives and friends can take advantage of the low rents.

Quisling

There will be plenty of kids, you can get 2 families in a 1 bedroom apartment.

DickD

It sounds good. But do they really want a family with children - for the four family units.

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