Elkton Senior Housing: Anatomy of a Deal

July 14, 2010

  When a private, profit-making developer proposed turning a series of dilapidated and vacant properties on High Street into a modern apartment building for senior citizens, Elkton town officials  were over-joyed.  Little did they know then that the project would bring them controversy, a court challenge, and a lot of headaches.

   The Elkton Alliance, whose executive director Mary Jo Jablonski was and is also a town commissioner, could barely contain its glee in 2009 when the Ingerman Group, of Cherry Hill, N.J., moved up in the state’s  priority list for federal housing assistance. (See link here:)    http://elktonalliance.blogspot.com/2009/03/high-street-senior-apartments.html

A majority of the town board has moved heaven and earth, as well as town ordinances, to accomodate the project, as documented in town meeting minutes ( see:  http://www.elkton.org/uploads/Meetings/Mayor%20and%20Commissioners%20Meetings/Minutes/MC12.16.09.pdf ) and Circuit Court proceedings brought by critics who questioned the way the town handled the project. (See also the excellent coverage of the town board on www.someonenoticed.wordpress.com as this issue wound its way through the town approval process.)

   The Ingerman Group has built senior housing and low income family housing projects along the East Coast for many years. Many of their projects have won design and environmental awards. (See homepage here: http://www.ingerman.com/index.php ) Indeed, the artist’s renderings of the Elkton project show a building that by any local standard would be a design asset to the community.

   But local residents have questioned why that location was selected for a residence for fragile seniors, in a dilapidated area known for crime and drug-dealing,  and the late-stage announcement of the developer’s decision to add a rather distant property on tiny Collins Street to the project. The Collins property was initially suggested by the developer as a “satellite parking” lot, raising questions about how many seniors or their visitors really would use a distant parking lot. Under questioning at town meetings and in court proceedings, the town eventually admitted that a parking lot could not legally be placed on the Collins property under town zoning law.

   So why continue to include the Collins street property in the project? David Holden, a self-described “development principal” for the project with the Ingerman Group, told The Cecil Times recently that a new decision had been made to use the Collins property as “open space and a garden for residents.”  The property is some distance from the proposed apartment building– estimated at 400 feet by some town commissioners at a December, 2009 meeting– but visually and physically seeming to be a much greater distance when walking the neighborhood.

   The Collins Street property is owned by Cecil Bank, which the developer has identified as providing partial private financing for the senior housing project. But most of the costs of the senior housing project are actually being borne by taxpayers through state and federal housing and economic stimulus programs.

   Apart from the local zoning and administrative issues that landed the project in court, the Elkton Senior Housing project has moved relatively quickly through the Maryland Department of Housing and Community Development (MDHCD) process for distributing both state and federal funds.  When the project met roadblocks– such as finishing  just out of the money on a competitive list of projects for a special federal economic stimulus program known as TCAP– the state found new ways to give the project other federal funds.

   State documents show that the Elkton Senior Housing project will receive $2 million in state Rental Housing Funds.  In addition, the state initially approved $1,068,551 in federal Low Income Housing Tax Credits (LIHTC) for the project. Furthermore, the project was trying to obtain, but failed to win a competition for, even more federal aid, passed through the state MDHCD, under the federal TCAP (Tax Credit Assistance Program), state documents show.

 But when the Elkton project finished just out of the money on the competitive TCAP list, the state came up with a new way to keep the project rolling.

   The state, using federal funds, came up with more money under the Section 1602 Tax Credit Exchange Program for the Elkton project just a few months ago, according to a  4/26/10 state spreadsheet document obtained by Cecil Times. Under the arrangement, the Ingerman Group gave back $480,316 of its previous allocation of federal L0w Income Tax Credits and in return got $4 million in federal Section 1602 aid.

(However, that money, provided under economic stimulus initiatives, mandated that aided projects were “shovel ready.” Court proceedings showed that the Elkton project is far from “shovel ready” and the developers did not even own the land. Furthermore, the court action will require the project to go through town planning, zoning and town board approval procedures all over again.)

 Apart from whether the project abides by federal “shovel ready” rules,  to simplify the math and the gobbledegook of state and federal housing bureaucracy, the Ingerman Group is approved for a total of  about $6.6 million in taxpayer-provided subsidies. ($2 million in state rental housing funds, $588,235 in federal Low Income Housing Tax Credits, and $4,013,873 in federal Sec. 1602 aid)  The taxpayer-provided aid covers the vast majority of the project’s costs, initially filed with the state as $10.8 million. However, in recent days, the developer has upped the total costs to at least $11.5 million, including the costs of acquiring the Collins street property that was not mentioned in previous filings with the state.

   The Collins street property is owned by Cecil Bank, according to state property records, after a previous sale arrangement fell through and the property reverted to the bank. Cecil Bank’s parent company, Cecil Bancshares, recently signed an agreement with federal and state regulators requiring  the company to adhere to a host of regulations and procedures designed to assure greater oversight and financial accountability for its operations and non-performing “assets,” such as vacant properties. (See federal regulatory document here:  http://www.federalreserve.gov/newsevents/press/enforcement/enf20100702a1.pdf

   As The Cecil Times previously reported here:  https://ceciltimes.wordpress.com/2010/07/13/update-1-elkton-sr-housing-loses-in-court-but-golden-parachute-firmly-in-place/  the county Circuit Court ruled Tuesday that the Town of Elkton did not have proper legal authority to grant fee waivers and concessions to the Collins Street property and the Ingerman Group project and the entire proposal must go through a “do-over” under town ordinances. But the town has been rapidly modifying a host of ordinances in recent weeks, which conveniently apply to the Elkton Senior Housing project, according to evidence presented in the court. So the do-over is expected to have the same outcome, in support of the project and the Collins Street property.

   One of the more interesting, and troubling, points raised during the court proceedings was the revelation by Keith Baynes, attorney for the winning plaintiffs against the town of Elkton, that the Ingerman Group had threatened his clients with lawsuits for daring to speak out and file their suit against the town. Such actions, known as “SLAPP” suits, (Strategic Lawsuit Against Public Participation) have been recognized under Maryland law for what they are: attempts to silence critics of public actions. State law sharply limits such lawsuits.

BULLETIN: Town of Elkton Settles Lawsuit after Judge Refuses to Dismiss Case Against Concessions on Elkton Senior Housing Project

July 13, 2010

ELKTON– The Town of Elkton agreed Tuesday afternoon to settle a lawsuit brought by two citizens challenging the concessions made by the town to accomodate a proposed senior citizens housing project, after a Circuit Court judge refused the town’s motion to dismiss the case.

     After the ruling by visiting judge Raymond E. Beck to let the case go forward, both sides hammered out an agreement under which the town conceded it lacked the proper legal authority under town ordinances last December when it granted concessions and waivers of fees to an unrelated property at 110 Collins Street, owned by Cecil Bank, and sought to transfer those waivers to the Elkton Senior Housing Project on High Street.  The town also agreed to pay $4,000 in legal bills incurred by the plaintiffs, Robert Litzenberg and James Nicholson.

   In addition, the developer of the project,  the Ingerman Group, of New Jersey, agreed not to sue Litzenberg and Nicholson. Keith Baynes, the attorney representing Litzenberg and Nicholson, told the court that the developer had threatened to sue his clients for speaking out about and filing their lawsuit over the town’s handling of the project.

   But evidence presented in court also showed that the Town of Elkton has been busy changing ordinances in recent weeks to accomodate the developers, in what appeared to be a back up plan in case the town lost the lawsuit.  So, while previous town approvals and concessions for the project were voided by the court settlement, the town, the developer and other interested business interests will get a “do-over” under recently revised ordinances tailored to fit the senior housing project.

    Before the agreement was reached, Judge Beck observed, “It seems that whenever a mistake was found you’re (the town) backing up and changing the ordinances.” It appeared that the town was saying, “can we make it all retroactive” when the question, the judge said, was really “shouldn’t they have to start all over again?” 

   As a result of the settlement, that is exactly what will have to happen: the developer and Cecil Bank, the owner of the Collins street property that is to be sold to the developer under a separate agreement, will get a “do-over” through the town review process. Given the town board’s support of the project, the outcome is hardly in doubt. But opponents will have a chance to raise more questions in public meetings.

    (The Cecil Times will be filing a more detailed report, including information on the more than $6 million in federal taxpayer funds allocated to this project and its speedy progress through the state/federal approval process, despite the fact that the project was far from “shovel ready,” as mandated by the special economic stimulus funds allocated to it.)

State’s Attorney Contest Gets Heated: UPDATE

June 8, 2010

   The campaign for Cecil County State’s Attorney could be one of the more interesting, and heated, races to watch this year as incumbent Christopher Eastridge and potential challenger Michael Halter– Eastridge’s former deputy– square off, as they did in separate interviews with The Cecil Times on Monday.

    Halter criticized his former boss for not giving prosecutors in the office more “discretion” in handling felony cases, deciding which cases stand the greatest chance of successful prosecution at trial and which cases should be handled with plea agreements. Eastridge shot back that Halter’s  criticism was unfounded and said of his former deputy:  “The position went to his head.”

   As The Cecil Times reported Sunday,( article linked here:   https://ceciltimes.wordpress.com/2010/06/06/michael-halter-files-to-run-against-chris-eastridge-for-states-attorney/ )  Halter filed his candidacy as a Republican last week and a day later, Eastridge filed for re-election as a Democrat. So far, Eastridge is unopposed in the Democratic primary while Halter will face longtime Elkton attorney Ellis Rollins III in the Republican primary. Rollins filed his candidacy last summer but is also seeking a gubernatorial appointment to a vacant Circuit Court judgeship.

  Halter and Eastridge insisted Monday that there was no attempt to orchestrate a challenge to Rollins in the GOP primary as a maneuver to possibly weaken the well-known Rollins for a potential match-up with Eastridge in a general election contest.  And given their comments about one another, it seems clear that Halter and Eastridge are ‘in it to win it.’

  Halter said he did not speak to Eastridge about his plan to run– “That’s just not something you would do with Mr. Eastridge”– but had talked with fellow Republican Rollins twice about his intent to run. “He  urged me not to run,” Halter added.

   Eastridge said it was “well known” that he planned to file for re-election and that it was simply a coincidence that both men filed within a day of each other. “It is not anything I’ve engineered,” Eastridge said.

   Halter said that a key issue in his campaign will be the need for more “discretion” for prosecutors to determine which cases should be brought to trial and which cases should be dealt with through a plea agreement. He said that the “excellent” staff attorneys in the office should be listened to more but now “every case is his,” he said of Eastridge. There were cases that staff felt were too weak to go to trial, but Eastridge insisted on taking them to court “and then these cases fell apart at trial,” Halter said.

    Eastridge countered that “I reserve to myself an appropriate level of authority” to determine which cases should go to trial. He said he consults with staff attorneys and seeks their views in such decisions. “I am not so obsinate as to be unwilling to see the potential pitfalls in certain cases,” he said.

   However, since most of the prosecutors are part-time, “we can’t have a staff meeting every week,” Eastridge noted.

   Halter joined the office as a part-time prosecutor in 2004 and went to full-time status in 2005. He was appointed Deputy State’s Attorney– the number two job in the office– in 2007, to replace the retiring David Parrack. Halter resigned his post in the fall of 2009. He said he decided to leave the office because “Chris controlled everything” and  prosecutors were “forced to try cases I did not think were winnable.”

   Eastridge shot back that Halter “has to accept responsibility” for his own cases and that in one case he reviewed after Halter left, the loss “could have been a question of appropriate instructions to the jury.”

    Both men explained that the heavy caseload requires prosecutors to make difficult decisions on which cases to fight at trial and which cases are best resolved through plea agreements. State speedy trial rules complicate such decisions. Eastridge estimated there are about 400 felony cases a year stemming from grand jury indictments or filing of criminal information documents, and such serious cases are top priority. Another 1,200 cases a year, many of lesser seriousness, are bumped up to Circuit Court when defendants refuse to resolve them in District Court and “pray” a jury trial at the higher court level.

   Eastridge said he “personally reviews” the serious felony cases stemming from indictments before decisions are made whether to take it to trial or seek a plea agreement.

    Halter said another key issue in his campaign would be the nature of plea agreements, which he said should be “binding” in most cases so that a defendant cannot come back a short time later and seek sentence modification from the original judge or subsequent diversion to non-jail programs, such as drug treatment. Halter has been critical of some judges for watering down punishment after a defendant only served a small portion of the original sentence.

    Both men are experienced, knowledgable prosecutors and a November general election campaign would be an interesting education on the law for citizens. But first Halter has to convince voters that he is the better GOP candidate than Rollins, who is an experienced trial attorney but has not been a prosecutor. The Rollins family name is legendary in local legal circles, since both his father and grandfather served as Circuit Court judges.

    Rollins is also still on a list of candidates recommended to the Governor by a judicial nominating commission for a seat on the local Circuit Court bench. One seat is currently vacant and another will be vacated this fall when Judge O. Robert Lidums retires.

    Eastridge applied for a judgeship but was passed over by the nominating panel earlier this year. “I think there was personality politics at work there,” Eastridge said of the panel’s decision. He declined to elaborate.

   Eastridge was elected State’s Attorney in 2002 and re-elected in 2006. He is a graduate of Washington College and received his law degree from the University of Virginia. He also served as deputy State’s Attorney in Kent County from 1999-2002.

    Halter is a graduate of the University of Delaware, with a degree in criminal justice, and holds a master’s degree in criminal justice administration. He received his law degree from Widener University. He and his wife, Megan, have two young children and live in the Fair Hill area.