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Rockville passes controversial housing plan

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Published on: Thursday, November 08, 2012

By Steve Ruiz

ROCKVILLE - The City Council, after weeks of deliberation and intense debate, authorized Rockville Housing Enterprises (RHE) on Monday to buy the Fireside Park Apartments and agreed to lend financial support to help city’s housing authority to finalize the deal.

RHE, an entity independent of the government formed by the Rockville mayor and city council in 1959 to help ensure the availability of affordable housing within the city, will pay $37.75 million for the 236-unit complex located at 735 Monroe St.

The council also approved to a loan of $1.5 million as well as a $200,000 grant to help fund the deal.

The purchase, RHE officials have said, will allow the city to maintain its affordable housing inventory while not displacing those already living in the Fireside Park Apartments. RHE Executive Director Ruth O’Sullivan said at an Oct. 8 public hearing household income levels and monthly rates will not see much change.

“It is difficult to imagine an action that would secure affordable housing and that would have less impact on the neighborhood,” said Councilman Tom Moore. “Nothing is being built. Nobody is moving out; nobody is moving in. There’s no impact on schools or traffic… The entire point of the transaction is to keep a good, solid, affordable neighborhood good, solid and affordable.”

Of the 236 units that make up the apartment complex, O’Sullivan said 142 will be priced at market-rate and the 94 units will be priced at rent levels affordable for households below 60 percent of the median income in the area (currently $64,500 for a family of four).

The resolution was approved by a vote of 3-2, with Moore, Councilman John Hall and Councilman Mark Pierzchala voting in favor of it and Mayor Phyllis Marcuccio and Councilwoman Bridgett Donnell Newton casting the dissenting votes.

Marcuccio argued it is not the job of a governing body to get involved in such matters.

“That is a job that ought to be in the private sector’s hands—not in our hands,” she said. “We are a government; we are not a business, and our job is not to invest and to make money for our constituents. We are to spend the money we are given very, very carefully and very fiscally responsible.”

Moore pointed out “It is the public policy of this city to support affordable public housing,” as written in the Rockville city code drafted in 1990 and it is “absurd” to think the city could do that without spending money.

“Saying, ‘I support affordable housing,’ cannot be the extent to which one supports affordable housing. You also have to act,” he said. “At a certain point you have to put up or shut up.”

The path was cleared for RHE’s purchase when the Florida-based real estate company Priderock Capital Partners withdrew its offer to buy the apartment complex Oct. 27. Newton wondered if the council had made a mistake in brushing off its offer opting to force affordable housing on the city.

“Fireside is what is called ‘naturally occurring affordable housing.’ And by that I mean it’s always been there, it’s growing older, it meets a need, it has a variety of income level people already there and that’s part of what Priderock was interested in,” Newton said.

“When I asked could they go to 30 percent [affordable housing], without batting an eye, [Priderock owner David] Khoury said yes. We never had a conversation to pull it along.”

Moore said that looking back on what could have been was not going to help get the issue resolved and because Priderock had already dropped out, the argument was moot.

In its proposal to the council, RHE outlined its intentions to maintain and improve the Fireside Park Apartments, including over $700,000 in renovations in Year 1 and $1.9 million over the next seven years.

To fund the purchase, RHE will take out a $32.4 million mortgage loan with Citibank and also seek a loan from Montgomery County to help fill the gap. 

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