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Rockville City Council to Talk Fireside Park Purchase

Council to weigh RHE and private proposals against city's affordable housing needs.

 

Having heard from potential purchasers and the public, Rockville officials are scheduled on Monday to discuss a proposed purchase of the Fireside Park Apartments by Rockville Housing Enterprises.

“I’d like to have some real details,” Rockville Mayor Phyllis Marcuccio said of the proposal in an interview with Rockville Patch on Friday.

Those details should come at Monday’s Rockville City Council meeting. Richard Nelson, director of Montgomery County's Department of Housing and Community Affairs, is scheduled to brief the council on the county’s rental housing market. City staff also is scheduled to brief the council on the availability of affordable housing in Rockville, on the city’s affordable housing policy and on the status of RHE’s proposal to purchase the complex at 735 Monroe St.

The meeting is at 7 p.m. at Rockville City Hall.

RHE, which administers public housing in Rockville, has asked the city to commit $2 million toward the $37.5 million purchase of the 236-unit garden-style complex. The purchase would help the city preserve mixed-income, affordable rental housing in the city, the agency says.

Marcuccio said she is interested in the appraised price of the property, which was most recently assessed for $22 million. She also “would like a better sense of dynamics on income and outgo," she said.

At the Oct. 15 council meeting, David Khoury, a co-founder and principal of Priderock Capital Partners, outlined the Florida-based management company’s plan to purchase Fireside Park.

Marcuccio called Priderock’s proposed purchase plan “very intriguing,” but added that the presentation by Khoury “wasn’t complete in any way.”

Read more about the Priderock proposal in The Gazette.

RHE is seeking to exercise its right of first refusal and sew up about $37.5 million in financing for the purchase, including about $1.5 million in closing costs. 

Fireside Park already provides a mix of affordable housing units, but RHE executive director Ruth O’Sullivan told city residents and officials last month.

RHE’s proposal calls for renting 40 percent of the complex’s units (94 units) at rates affordable to families earning up to 60 percent of the Area Median Income or below. AIM for a family of four, as determined by the U.S. Department of Housing and Urban Development, is $107,500.

Priderock’s proposal calls for 20 percent (47 units) to be affordable to such families.

“Maybe the thing to look at is what about 30 percent [of the units being] lower income?” Marcuccio said. “Could Priderock handle it then?”

Marcuccio said she is “interested in affordable housing without putting the city in any kind of financial jeopardy.”

“Is it going to cause an impact in our budget where we’re going to have to look at raising taxes?” she said.

Asked if she was leaning toward the Priderock proposal over that of RHE, Marcuccio was noncommittal, but said that she wants to consider whether the city can take the public money requested in the RHE proposal “and apply it differently.”

“We’re looking to keep affordable housing, that means keeping prices down,” Marcuccio said. That also means having money to bridge the difference between the complex’s operating costs and the reduced rental rates, she said.

“I’m much more contented when that comes out of the business community’s pocket and not from citizens of the city,” she said.

Rockville residents are also looking at the RHE proposal with a critical eye.

Rockville resident Theresa Defino wrote a letter to the mayor and council criticizing the RHE plan for “financial acrobatics.”

Defino called for a “long-range strategic plan for low- and moderate-income housing in Rockville,” adding that she has not seen how the proposed Fireside purchase fits into such a strategic plan or into RHE’s mission to serve low-income residents.

“RHE should save its energy and resources and forgo this purchase, pull back and start to repair some of the damage that has been done to its credibility through this very bumpy purchase process,” Defino .

Click here to read the letter in full.

amarynth October 22, 2012 at 10:35 PM
From the linked Gazette article: "David Khoury, a co-founder and principal of Priderock, said his company would keep rents below those of new apartments in the area." I don't really understand what he's getting at there. Is the fact that he's not going to be charging rents comparable to "new" developments like Rockville Town Square, for a building that's much older and further away from the metro and shops supposed to be reassuring?

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