Salisbury Mulls Housing Project’s Payment Request

SALISBURY — A development’s request for a payment in lieu of taxes (PILOT) program received mixed reactions from the Salisbury City Council Tuesday.
If the council accepts, the program would represent a $360,000 savings for the Rivers Edge development over 40 years.
The PILOT program would allow the River’s Edge affordable housing development to deal with a host of unexpected costs, said Andrew Hanson, representing Osprey Property Company.
“The less than ideal news is, as everyone is aware, we’ve seen increases in interest rates as well as construction costs,” he told the council.
Early interest rates of about 6 percent on the development will likely be closer to 7 percent now, continued Hanson. The approximately $9,000 per year for 40 years that Osprey would save via the PILOT would go a long way toward helping the company absorb those new costs, he said. The PILOT would represent a reduction of $100 per unit per year “for a term equal to the long term affordability restrictions,” read an Osprey memo.
Council President Jake Day admitted that he’s been expecting a PILOT request from the developers.
“This doesn’t come as a surprise, asking for a PILOT on an affordable housing project in the city and this project is something I think we all want to see move forward,” he said.
But Day wanted to make sure that granting a PILOT would have a noticeable effect on seeing Rivers Edge developed.
“I think that it’s reasonable to want a clear picture painted,” he told Hanson.
Already Salisbury has granted Osprey an EDU subsidy worth $348,000. Should the council agree to the PILOT, the city will have discounted the developers a total of $708,000 on the project over the next several decades. With the council’s support, Hanson predicted that Osprey could get the ball rolling on Rivers Edge starting in October and actually be ready to start renting rooms by this time next year, should everything fall into place.
Hanson reminded the council that Rivers Edge would be unique as it’s designed as an affordable housing development with an emphasis on renting to artists. Additionally, through a partnership with the Weinberg Foundation, Osprey will maintain three living units exclusively for people who are non-elderly but permanently disabled who have an income no greater than 30 percent of the Wicomico County area median.
“There is a real need, not just for affordable housing but for affordable housing for folks that are disabled,” said Hanson.
The Weinberg Foundation will contribute $189,480 to the project, but the low-rent units will still mean a loss in revenue for Rivers Edge, Hanson explained, which would be offset by the PILOT. But with the EDU subsidy already in place, Councilwoman Terry Cohen wondered if Salisbury might have already done enough for the project.
“The question is, who is going to pay tomorrow’s bills?” she asked.
Acknowledging that the council majority has shown a lot of support for Rivers Edge, Cohen said she personally does not think it’s fair to incentivize Osprey so much when other developers in the past have not been so lucky.
“I realize there’s been an election and there’s been a turnover in the council but none of our other tax payers are getting that forbearance and some of them are on the edge,” she said.
A PILOT of $9,000 a year might seem minor on paper, Cohen said, but the city loses money in “dribs and drabs” without realizing it.
At the other end of the dial, Councilwoman Shanie Shields views affordable housing at Rivers Edge as something the city owes residents.
“I support it and I think it’s a plus for the city of Salisbury to pay back what we lost in the 80s,” she said.
According to Shields, Salisbury has too much of an antagonistic “have and have not” culture where many people oppose affordable housing because it’s not something they’ve ever had to worry about.
“There’s a market for affordable housing,” she said.
Shields fired a volley at Cohen, as well, over her reluctance to get behind Rivers Edge with a PILOT.
“And we’re sitting here wanting more information, as usual and trying to kill the project, as usual. It’s just downright sickening,” said Shields.
Cohen “took exception” to the remark and defended her record on supporting affordable housing. In the past, Cohen said, she has often supported the city assisting affordable housing projects getting up and running. But she has voted against certain projects as well when they seem too costly for Salisbury or are flawed.
“My votes here show that I have supported affordable housing and I have supported other projects here in this community,” she said.
Once the dust began to settle, a majority of the council agreed to move consideration of the PILOT request forward for review at the next legislative session.

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