BERLIN – Despite dire predictions of a year-long delay, the Cannery Village workforce housing initiative was able to go forward with an application for state funding by the deadline this week.
Several weeks ago, the project was stripped of Community Development Block Grant (CDBG) funding awarded in a previous year, but told to reapply by May 16. The project lacked a firm commitment for the remainder of the funding needed, and CDBG staff explained to the Berlin Town Council that the Cannery Village initiative would only be considered for more CDBG funding after that financial commitment by a bank or other lending body.
“We were very close,” said Berlin Community Development Corporation (BCDC) president Frank Gunion. “The main obstacle was receiving a commitment of construction financing as evidence of ability to proceed.”
Cannery Village now has a financing reservation letter from the Community Development Authority (CDA) of Maryland’s Department of Housing and Community Development, Gunion said. CDA is restarting its loan program, and Cannery Village is the first project to take advantage of it.
That reservation letter allows the project to just meet the 2008 application deadline for CDBG money. Without it, the project would have to wait until the next round of grant funding, 12 months from now.
The cancellation of the earlier CDBG dollars would not affect the new application, Cindy Stone director of the CDBG program, said last month.
Cannery Village insiders say that the CDA reservation letter fulfills the firm funding requirements.
“She said the CDA reservation was the crucial component for the grant to be scored high,” Gunion said.
According to Don Bibb, executive director of the Talbot County Housing Authority, BCDC’s partner in the initiative, the project is in a bind without the CDBG money, intended as gap financing, because the non-profit BCDC cannot close on any loan without it, but cannot get the CDBG money without the firm offer of a loan.
“It seems like a catch-22,” said Berlin Town Council member Paula Lynch.
“It is,” said Bibb.
“Everything is contingent on everything else,” said Gunion.
An otherwise unrelated project could be jeopardized if CDBG dollars are awarded to the workforce housing initiative, but work is delayed.
Berlin hopes to get CDBG money in the 2009 funding round for the expanded and improved wastewater treatment plant, but cannot apply if less than 20 percent of the money awarded to Cannery Village is spent by the May 2009 application deadline. Any CDBG funds allocated to the housing initiative are awarded to the town of Berlin, which then passes the money through to a sub-recipient, in this case the Housing Authority of Talbot County.
“Twenty percent has to be spent for us to even submit an application,” said interim Mayor Gee Williams. “We damn well don’t want to jeopardize one of the most important capital projects in the last 15-20 years if there are glitches in the [Cannery Village] project.”
The Berlin Town Council had concerns over committing to something that might not happen, said Council member Paula Lynch. “Will this work?” she asked.
Bibb assured the Town Council that the money would be spent on time for infrastructure work. The rush to apply disturbed some Council members, who said Monday that they had not received a copy of the grant application, which they would have to sign by Thursday.
Council member Dean Burrell said he would rather have had the application in his hands.
“Ever since we’ve been working on this project we’ve had to double back,” said Council member Elroy Brittingham. “Every time you come in there’s something we didn’t do.”
“It’s a timing issue. This is the date the hearing had to occur to meet the May 16 application,” said Gunion.
The Berlin Town council received the Cannery Village application and signed off on it by Thursday. A public hearing was held on the CDBG application Monday night.
“I do encourage any affordable houses that can be obtained,” said Phyllis Purnell. “I support any affordable homes that can become a reality in this area.”
“This is a project that would definitely help the community,” said Brian Roberts, an accountant who works with BCDC. “People need affordable housing and this is the closest thing in the area.”
Gunion said the end result will justify the lengthy process. “This is a very complicated project. We’re trying to bring something to the town that has never been brought here before,” said Gunion during the public hearing. “We’re bringing housing in at a cost that cannot be created in a normal development. Hopefully, the town will have the confidence that this group of volunteers will do it successfully.”