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Rockville’s Divide Over Fireside Park

The mayor and Moore on whether the deal with RHE was right for Rockville.

The Rockville City Council’s split decision Monday to approve a $2 million package of loans and grants for Rockville Housing Enterprises’ proposed purchase of the Fireside Park Apartments was lamented by the mayor who said the complex would be better off in private hands and lauded by a council member who said the deal allows the city government to fulfill an important role of providing affordable housing.

The council approved the plan on a 3-2 vote, with Mayor Phyllis Marcuccio and Councilwoman Bridget Donnell Newton voting against it.

The approval allows RHE, which administers public housing in Rockville, to proceed with the $37.5 million purchase of the 236-unit garden-style Fireside Park complex at 735 Monroe St.

Marcuccio lamented the withdrawal of an offer to purchase Fireside Park by PrideRock LLC, a Florida-based property management company.

Having the apartments under private management “would’ve been good for the city, good for the tenants, it would’ve been good all around,” Marcuccio said in an interview with Rockville Patch.

PrideRock would have paid taxes to the city and would have cared for the 51-year-old complex, she said.

Councilman Tom Moore disagreed that the complex was better off in private hands, saying in an interview there is “no downside” to the deal from the city’s perspective.

“I ran on the idea that affordable housing is something that’s important to the city and important to the city to participate in,” said Moore, who was first elected last year. “The deal had to be right. And this deal was right.”

Moore said early on that the council had the votes to seal the proposal.

Marcuccio said this week that it was pushed along by the county’s Department of Housing and Community Affairs and by a “let’s do it” attitude on the part of a majority of the council.

Financing includes a county loan of $2.85 million to RHE. The loan was contingent on a combined commitment of $2.5 million by the city and RHE. The county is loaning the city $1.5 million of its $2 million share of the commitment, to be repaid in $500,000 installments beginning in fiscal 2014, which begins July 1.

The city’s contribution also includes a $300,000 loan and a $200,000 grant—both from the city’s Housing Opportunities Fund.

Click here to read a city staff report on the proposal from Monday.

Marcuccio criticized the plan as too risky, saying it left Rockville open to liability if RHE could not make its mortgage or other loan payments.

Moore played down the mayor’s concerns. “We’ll definitely want to watch it as we do all of RHE’s opportunities,” he said. “The way we have structured it, there’s almost no risk or expense to the city.”

Some city residents who spoke at a public hearing on the proposal framed Fireside Park’s future as a choice between PrideRock and RHE.

To do so “was a false choice,” Moore said. PrideRock was not prepared to offer the amount of affordable housing that RHE said it would seek to preserve in the complex, he said.

David Khoury, a co-founder and principal of Priderock, told the council Oct. 15 that the company could look to subsidize below market rate rents on 15 to 20 percent of the complex, The Gazette reported. PrideRock also planned improvements such as a clubhouse, he said.

RHE is proposing that 60 percent of the complex’s units (142 units) be rented at the market rate, with the remaining 40 percent of units renting 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, targeting the more affordable units to a family of four with an income of $64,500.

Marcuccio suggested that Fireside Park might have been purchased for less if the city had waited.

“Why not let it alone and let the seller come back and try to sell it again?” she said. “You might get it at a cheaper price.”

Moore said he doubted that a better deal could have been had.

“There’s absolutely no evidence to suggest anything like that,” he said. “The county signed a contract with the seller and that’s what we proceeded on.”

Under the contract, by which the county exercised its right of first refusal for the property, the county and RHE had 30 days to secure financing.

“They made it clear that if we didn’t decide it Monday, the deal was off,” Moore said. “Having said that, we had plenty of time to consider it.”

In a statement delivered during Monday’s council meeting, Moore criticized colleagues who he said tried to “kill a deal with endless delays, and endless questions, and endless conditions.” He questioned colleagues' stated commitment to affordable housing.

“You have to wonder, if you can't support this affordable housing deal, what kind of affordable housing deal could you possibly support?” Moore said. “Saying the words ‘I support affordable housing’ cannot be the full extent to which one supports affordable housing. You also have to act.”

Marcuccio said the deal did not turn out to be all that it first seemed to be.

“We were led to believe that it wasn’t going to cost the city anything and now we’ve found out quite differently,” she said.

Click here to read more Rockville Patch coverage of the proposed purchase.

More background on the deal is available on the city's website.

Next: Is the city creating an “enclave” of public housing?

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